Filed electronically with the Securities and Exchange Commission
on July 29, 1999
File No. 33-34645
File No. 811-6103
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /___/
Pre-Effective Amendment No. __ /___/
Post-Effective Amendment No. 12 / X /
----
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /___/
Amendment No. 14 / X /
----
INVESTORS CASH TRUST
--------------------
(Exact Name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, Illinois 60606
--------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 537-7000
Philip J. Collora, Vice President and Secretary
Investors Cash Trust
222 South Riverside Plaza
Chicago, Illinois 60606
-----------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
/___/ Immediately upon filing pursuant to paragraph (b)
/___/ 60 days after filing pursuant to paragraph (a) (1)
/___/ 75 days after filing pursuant to paragraph (a) (2)
/ X / On August 1, 1999 pursuant to paragraph (b)
/___/ On __________________ pursuant to paragraph (a) (1)
/___/ On __________________ pursuant to paragraph (a) (2) of Rule 485.
If Appropriate, check the following box:
/___/ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
INVESTORS CASH TRUST
Government Securities Portfolio
Treasury Portfolio
Part C - Page 1
<PAGE>
Investors
Cash Trust
PROSPECTUS August 1, 1999
INVESTORS CASH TRUST
222 South Riverside Plaza, Chicago, Illinois 60606
Government Securities Portfolio
Treasury Portfolio
Mutual funds:
o are not FDIC-insured
o have no bank guarantees
o may lose value
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
Table of Contents
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Money market investing 1
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Investment approach 1
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Principal risk factors 1
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About the portfolios 1
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Government securities portfolio 1
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Treasury portfolio 4
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Investment restrictions 7
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Investment adviser 8
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About your investment 9
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Transaction information 9
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Buying shares 11
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Selling and exchanging shares 11
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Distributions 12
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Taxes 12
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Financial highlights 13
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<PAGE>
This page
intentionally
left blank.
<PAGE>
INVESTORS CASH TRUST
MONEY MARKET INVESTING
INVESTMENT APPROACH
The portfolios described in this prospectus seek to provide maximum current
income consistent with the stability of capital. Each portfolio is managed to
maintain a net asset value of $1.00 per share. Each portfolio has its own
investment objective, investment strategy and risk profile.
Included in the "Investment restrictions" section is a listing of those
restrictions which cannot be changed without shareholder approval. Except as
otherwise noted, each portfolio's investment objective and other policies may be
changed by the fund's Board of Trustees, without a vote of shareholders.
PRINCIPAL RISK FACTORS
As with most money market funds, the major factor affecting the portfolios'
performance is short-term interest rates. If short-term interest rates fall, the
portfolios' yields are also likely to fall. Moreover, the investment manager's
strategy or choice of specific investments may not perform as expected. These
portfolios may have lower returns than other portfolios that invest in
longer-term or lower-quality securities. It is also possible that securities in
the portfolios' investment portfolios could be downgraded in credit rating or go
into default.
An investment in the portfolios is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although each
portfolio seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in each portfolio.
ABOUT THE PORTFOLIOS
GOVERNMENT SECURITIES PORTFOLIO
Investment objective
The portfolio seeks to provide maximum current income consistent with stability
of capital.
Main investment strategies
The portfolio pursues its objective by investing exclusively in U.S. Treasury
bills, notes, bonds and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, and related repurchase
agreements. All such securities purchased mature in 12 months or less. The
portfolio maintains a dollar-weighted average maturity of 90 days or less.
The portfolio may invest in repurchase agreements. Repurchase agreements are
instruments under which a portfolio acquires ownership of a U.S. Government
security from a broker-dealer or bank that agrees to repurchase such security at
a mutually agreed upon time and price, which price is higher than the purchase
price. The maturity of the securities subject to repurchase may exceed one year.
Currently, the portfolio will only enter into repurchase agreements with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York that have been approved pursuant to procedures adopted by the fund's Board
of Trustees.
The portfolio may invest in floating and variable rate instruments (obligations
that do not bear interest at fixed rates). Accordingly, as interest rates
decrease or increase, the potential for capital appreciation or depreciation is
less than for fixed-rate obligations.
1
<PAGE>
Securities are purchased and sold based on the investment manager's perception
of monetary conditions, the available supply of appropriate investments, and the
manager's projections for short-term interest rate movements.
Of course, there can be no guarantee that by following these investment
strategies, the portfolio will achieve its objective.
Risk management strategies
The portfolio seeks to minimize credit risk by investing exclusively in
short-term obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.
Main risks
The portfolio's principal risks are associated with fluctuations in short-term
interest rates and the investment manager's skill in managing the portfolio. You
will find a discussion of these risks under "Money Market Investing" at the
front of this prospectus.
Some securities issued by U.S. Government agencies or instrumentalities are
supported only by the credit of that agency or instrumentality, while other
securities have an additional line of credit with the U.S. Treasury. There is no
guarantee that the U.S. Government will provide support to such agencies or
instrumentalities, and such securities may involve risk of loss of principal and
interest.
Past performance
The chart and table below provide some indication of the risks of investing in
the portfolio by illustrating how the portfolio has performed from year to year.
Of course, past performance is not necessarily an indication of future
performance.
Total returns for years ended December 31
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
1991 5.71%
1992 3.45%
1993 2.95%
1994 4.03%
1995 5.83%
1996 5.33%
1997 5.93%
1998 5.35%
For the period included in the bar chart, the portfolio's highest return for a
calendar quarter was 1.57% (the first quarter of 1991), and the portfolio's
lowest return for a calendar quarter was 0.71% (the fourth quarter of 1992 and
the first quarter of 1993).
The portfolio's year-to-date total return as of June 30, 1999 was 2.34%. The
total return would have been lower had certain expenses not been capped.
2
<PAGE>
Average Annual Total Returns
For periods ended December 31, 1998 Government Securities Portfolio
- ----------------------------------- -------------------------------
One Year 5.35%
Five Years 5.21%
Since Portfolio Inception* 4.86%
- -----------
* Inception date for the portfolio is September 27, 1990.
7-Day Yield
On December 31, 1998 4.84%
Fee and expense information
This information is designed to help you understand the fees and expenses that
you may pay if you buy and hold shares of the portfolio.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Shareholder Fees (fees paid directly from your investment):
- -----------------------------------------------------------------------------------------------
<S> <C>
Maximum sales charge (load) imposed on purchases (as % of offering price) NONE
- -----------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as % of redemption proceeds) NONE
- -----------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on reinvested dividends/distribution NONE
- -----------------------------------------------------------------------------------------------
Redemption fee (as % of amount redeemed, if applicable) NONE
- -----------------------------------------------------------------------------------------------
Exchange fee NONE
- -----------------------------------------------------------------------------------------------
Annual portfolio operating expenses (expenses that are deducted from portfolio assets):
- -----------------------------------------------------------------------------------------------
Management fee 0.15%
- -----------------------------------------------------------------------------------------------
Distribution (12b-1) fees NONE
- -----------------------------------------------------------------------------------------------
Other expenses 0.18%
- -----------------------------------------------------------------------------------------------
Total annual portfolio operating expenses 0.33%
- -----------------------------------------------------------------------------------------------
Expense reimbursement 0.08%
- -----------------------------------------------------------------------------------------------
Net expenses 0.25%*
- -----------------------------------------------------------------------------------------------
</TABLE>
* By contract, total portfolio expenses will be capped at 0.25% through July
31, 2000.
Example
This example is to help you compare the cost of investing in the portfolio with
the cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions,
the sale of shares at the end of each period, and "Annual portfolio operating
expenses" remaining the same each year except the first year. The first year of
your investment will take into account the portfolio's "Net expenses" as shown
above. The expenses would be the same whether you sold your shares at the end of
each period or continued to hold them. Actual portfolio expenses and return vary
from year to year, and may be higher or lower than those shown.
- ------------------------------------------------------
One Year $ 26
- ------------------------------------------------------
Three Years $ 98
- ------------------------------------------------------
Five Years $ 178
- ------------------------------------------------------
Ten Years $ 412
- ------------------------------------------------------
3
<PAGE>
TREASURY PORTFOLIO
Investment objective
The portfolio seeks to provide maximum current income consistent with stability
of capital.
Main investment strategies
The portfolio pursues its objective by investing exclusively in U.S. Treasury
bills, notes, bonds and other obligations issued by the U.S. Government, and
related repurchase agreements. All such securities purchased mature in 12 months
or less. The portfolio maintains a dollar-weighted average maturity of 90 days
or less. The payment of principal and interest on the securities in the
portfolio's investment portfolio is backed by the full faith and credit of the
U.S. Government.
As a fundamental policy, at least 65% of the portfolio's total assets are
invested in U.S. Treasury obligations and repurchase agreements collateralized
by U.S. Treasury securities.
The portfolio may invest in repurchase agreements. Repurchase agreements are
instruments under which a portfolio acquires ownership of a U.S. Government
security from a broker-dealer or bank that agrees to repurchase such security at
a mutually agreed upon time and price, which price is higher than the purchase
price. The maturity of the securities subject to repurchase may exceed one year.
Currently, the portfolio will only enter into repurchase agreements with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York that have been approved pursuant to procedures adopted by the fund's Board
of Trustees.
The portfolio may invest in floating and variable rate instruments (obligations
that do not bear interest at fixed rates). Accordingly, as interest rates
decrease or increase, the potential for capital appreciation or depreciation is
less than for fixed-rate obligations.
Securities are purchased and sold based on the investment manager's perception
of monetary conditions, the available supply of appropriate investments, and the
manager's projections for short-term interest rate movements.
Of course, there can be no guarantee that by following these investment
strategies, the portfolio will achieve its objective.
Risk management strategies
The portfolio seeks to minimize credit risk by investing exclusively in
short-term obligations backed by the full faith and credit of the U.S.
Government.
Main risks
The portfolio's principal risks are associated with fluctuations in short-term
interest rates and the investment manager's skill in managing the portfolio. You
will find a discussion of these risks under "Money Market Investing" at the
front of this prospectus.
4
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the portfolio by illustrating how the portfolio has performed from year to year.
Of course, past performance is not necessarily an indication of future
performance.
Total returns for years ended December 31
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE:
BAR CHART DATA:
1992 3.33%
1993 2.89%
1994 4.02%
1995 5.75%
1996 5.20%
1997 5.75%
1998 5.21%
For the period included in the bar chart, the portfolio's highest return for a
calendar quarter was 1.45% (the second quarter of 1995), and the portfolio's
lowest return for a calendar quarter was 0.68% (the first quarter of 1993 ).
The portfolio's year-to-date total return as of June 30, 1999 was 2.24%. The
total return would have been lower had certain expenses not been capped.
Average Annual Total Returns
For periods ended December 31, 1998 Treasury Portfolio
----------------------------------- ------------------
One Year 5.21%
Five Years 5.09%
Since Portfolio Inception* 4.52%
- -----------
* Inception date for the portfolio is December 17, 1991.
7-Day Yield
On December 31, 1998 4.50%
5
<PAGE>
Fee and expense information
This information is designed to help you understand the fees and expenses that
you may pay if you buy and hold shares of the portfolio.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Shareholder Fees (fees paid directly from your investment):
- -----------------------------------------------------------------------------------------------
<S> <C>
Maximum sales charge (load) imposed on purchases (as % of offering price) NONE
- -----------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as % of redemption proceeds) NONE
- -----------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on reinvested dividends/distribution NONE
- -----------------------------------------------------------------------------------------------
Redemption fee (as % of amount redeemed, if applicable) NONE
- -----------------------------------------------------------------------------------------------
Exchange fee NONE
- -----------------------------------------------------------------------------------------------
Annual portfolio operating expenses (expenses that are deducted from portfolio assets):
- -----------------------------------------------------------------------------------------------
Management fee 0.15%
- -----------------------------------------------------------------------------------------------
Distribution (12b-1) fees NONE
- -----------------------------------------------------------------------------------------------
Other expenses 0.22%
- -----------------------------------------------------------------------------------------------
Total annual portfolio operating expenses 0.37%
- -----------------------------------------------------------------------------------------------
Expense reimbursement 0.12%
- -----------------------------------------------------------------------------------------------
Net expenses 0.25%*
- -----------------------------------------------------------------------------------------------
</TABLE>
* By contract, total portfolio expenses will be capped at 0.25% through July
31, 2000.
Example
This example is to help you compare the cost of investing in the portfolio with
the cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions,
the sale of shares at the end of each period, and "Annual portfolio operating
expenses" remaining the same each year except the first year. The first year of
your investment will take into account the portfolio's "Net expenses" as shown
above. The expenses would be the same whether you sold your shares at the end of
each period or continued to hold them. Actual portfolio expenses and return vary
from year to year, and may be higher or lower than those shown.
- ------------------------------------------------------
One Year $ 26
- ------------------------------------------------------
Three Years $ 107
- ------------------------------------------------------
Five Years $ 196
- ------------------------------------------------------
Ten Years $ 459
- ------------------------------------------------------
6
<PAGE>
Investment restrictions
Each portfolio has adopted the following fundamental investment restrictions
which cannot be changed without shareholder approval.
o Except as permitted under the Investment Company Act of 1940, as amended,
and as interpreted or modified by regulatory authority having jurisdiction,
from time to time, each portfolio may not:
- borrow money;
- issue senior securities;
- concentrate its investments in a particular industry; or
- make loans.
o Each portfolio may not engage in the business of underwriting securities
issued by others, except to the extent that a portfolio may be deemed to be
an underwriter in connection with the disposition of portfolio securities;
o Each portfolio may not purchase or sell real estate, which does not include
securities of companies which deal in real estate or mortgages or
investments secured by real estate or interests therein, except that a
portfolio reserves freedom of action to hold and to sell real estate
acquired as a result of the portfolio's ownership of securities; or
o Each portfolio may not purchase physical commodities or contracts relating
to physical commodities.
In addition, each portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the fund's Board without shareholder
approval.
o Each portfolio may not:
- make short sales of securities, or purchase any securities on margin,
except to obtain such short-term credits as may be necessary for the
clearance of transactions; or
- write, purchase, or sell puts, calls or combinations thereof.
o Except in connection with a master/feeder fund structure implemented for
each portfolio, the Government Securities Portfolio may not purchase any
securities other than obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, and repurchase agreements of
such obligations. The Treasury Portfolio may not purchase any securities
other than obligations issued by the U.S. Government and repurchase
agreements of such obligations. However, if the fund implements a
master/feeder fund structure, shareholder approval is required.
7
<PAGE>
Investment adviser
Each portfolio retains the investment management firm of Scudder Kemper
Investments, Inc., the ("Adviser"), 345 Park Avenue, New York, New York, to
manage each portfolio's daily investment and business affairs subject to the
policies established by the fund's Board. The Adviser actively manages each
portfolio's investments. Professional management can be an important advantage
for investors who do not have the time or expertise to invest directly in
individual securities. Scudder Kemper Investments, Inc. is one of the largest
and most experienced investment management organizations worldwide, managing
more than $280 billion in assets globally for mutual fund investors, retirement
and pension plans, institutional and corporate clients, and private family and
individual accounts.
Government Securities Portfolio
The Adviser; the fund's Principal Underwriter, Kemper Distributors, Inc.; the
fund's Shareholder Service Agent, Kemper Service Company; and the fund's
Accounting Agent, Scudder Fund Accounting Corporation, have contractually agreed
to maintain the total annualized expenses of the portfolio at no more than 0.25%
of the average daily net assets of the portfolio through July 31, 2000. As a
result, the Adviser received an investment management fee of 0.07% of the
portfolio's average daily net assets on an annual basis for the fiscal year
ended March 31, 1999, reflecting the effect of expenses limitations then in
effect.
Treasury Portfolio
The Adviser; the fund's Principal Underwriter, Kemper Distributors, Inc.; the
fund's Shareholder Service Agent, Kemper Service Company; and the fund's
Accounting Agent, Scudder Fund Accounting Corporation, have contractually agreed
to maintain the total annualized expenses of the portfolio at no more than 0.25%
of the average daily net assets of the portfolio through July 31, 2000. As a
result, the Adviser received an investment management fee of 0.03% of the
portfolio's average daily net assets on an annual basis for the fiscal year
ended March 31, 1999, reflecting the effect of expenses limitations then in
effect.
Portfolio management
The following investment professionals are associated with the portfolios as
indicated:
<TABLE>
<CAPTION>
Name & Title Joined the Portfolio Background
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Frank J. Rachwalski, Jr. 1990 Mr. Rachwalski joined the Adviser in 1973 as a money market
Lead Manager specialist and began his investment career at that time. He
has been responsible for the trading and portfolio
management of money market portfolios since 1974.
Jerri I. Cohen 1998 Ms. Cohen joined the Adviser in 1981 as an accountant and
Manager began her investment career in 1992 as a money market trader.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Year 2000 readiness
Like all mutual funds, the portfolios could be affected by the inability of some
computer systems to recognize the year 2000. The Adviser has a year 2000
readiness program designed to address this problem, and is also researching the
readiness of suppliers and business partners as well as issuers of securities
the portfolios own. Still, there's some risk that the year 2000 problem could
materially affect the portfolios' operations (such as their ability to calculate
net asset value and process purchases and redemptions), their investments, or
securities markets in general.
8
<PAGE>
About Your Investment
Transaction information
Share price
Scudder Fund Accounting Corporation determines the net asset value per share of
the portfolios on each day the New York Stock Exchange is open for trading, at
11:00 a.m., 1:00 p.m. and 3:00 p.m. Central time.
Each portfolio seeks to maintain a net asset value of $1.00 per share, and
values its portfolio instruments at amortized cost. Calculations are made to
compare the value of the portfolios' investments, valued at amortized cost, with
market-based values. In order to value its investments at amortized cost, a
portfolio purchases only securities with a maturity of 397 days or less, and
maintains a dollar-weighted average portfolio maturity of 90 days or less. In
addition, the fund limits its portfolio investments to securities that meet the
quality and diversification requirements under federal law.
The net asset value per share is the value of one share, and is determined by
dividing the value of a portfolio's total net assets, less liabilities, by the
number of shares outstanding.
Processing time
Payment for shares you sell will be made in cash as promptly as practicable but
in no event later than seven days after receipt of a properly executed request.
If you have share certificates, these must accompany your order in proper form
for transfer. When you place an order to sell shares for which a portfolio may
not yet have received good payment (i.e., purchases by check or certain
Automated Clearing House Transactions), a portfolio may delay transmittal of the
proceeds until it has determined that collected funds have been received for the
purchase of such shares. This may be up to 10 days from receipt by a portfolio
of the purchase amount. If shares being redeemed were acquired from an exchange
of shares of a mutual fund that were offered subject to a contingent deferred
sales charge, as described in the prospectus for that other fund, the redemption
of such shares by the portfolio may be subject to a contingent deferred sales
charge, as explained in such prospectus.
Signature guarantees
A signature guarantee is required unless you sell shares worth $50,000 or less
and the proceeds are payable to the shareholder of record at the address of
record. You can obtain a guarantee from most brokerage houses and financial
institutions, although not from a notary public. The portfolios will normally
send you the proceeds within one business day following your request, but may
take up to seven business days (or longer in the case of shares recently
purchased by check).
9
<PAGE>
Purchase restrictions
The portfolios and their transfer agent each reserves the right to withdraw all
or any part of the offering made by this prospectus, and to reject purchase
orders. Also, from time to time, each portfolio may temporarily suspend the
offering of its shares to new investors. During the period of such suspension,
persons who are already shareholders normally are permitted to continue to
purchase additional shares and to have dividends reinvested.
Any purchase that would result in total account balances for a single
shareholder in excess of $3 million is subject to prior approval by the
portfolios.
Minimum balances
The minimum initial investment for each portfolio is $1 million, but such
minimum amount may be changed at any time at management's discretion. Subsequent
investments may be made in any amount. Firms offering portfolio shares may set
higher minimums for accounts they service and may change such minimums at their
discretion.
Because of the high cost of maintaining small accounts, each portfolio reserves
the right to redeem an account that falls below the minimum investment level.
Thus, a shareholder who makes only the minimum initial investment and then
redeems any portion thereof might have the account redeemed. A shareholder will
be notified in writing and will be allowed 60 days to make additional purchases
to bring the account value up to the minimum investment level, before the
portfolio redeems that shareholder account.
Third party transactions
If you buy and sell shares of a portfolio through a member of the National
Association of Securities Dealers, Inc. (other than the portfolios'
distributor), that member may charge a fee for that service. This prospectus
should be read in connection with such firms' material regarding their fees and
services.
Redemption-in-kind
The portfolios reserve the right to honor any request for redemption or
repurchase order by "redeeming in kind," that is, by giving you marketable
securities (which typically will involve brokerage costs for you to liquidate)
rather than cash; in most cases, the fund won't make a redemption in kind unless
your requests over a 90-day period total more than $250,000 or 1% of the fund's
assets, whichever is less.
10
<PAGE>
Buying shares
Shares of each portfolio may be purchased at net asset value, with no sales
charge, through selected financial services firms, such as broker-dealers and
banks. Investors must indicate the portfolio in which they wish to invest.
Each portfolio seeks to be as fully invested as possible at all times in order
to achieve maximum income. Since the portfolios will be investing in instruments
that normally require immediate payment in Federal Funds (monies credited to a
bank's account with its regional Federal Reserve Bank), each portfolio has
adopted procedures for the convenience of its shareholders and to ensure that it
receives investable funds.
Orders for purchase of shares received by wire transfer in the form of Federal
Funds will be effected at the next determined net asset value. Shares purchased
by wire will receive that day's dividend if effected at or prior to the 1:00
p.m. Central time net asset value determination, otherwise such shares will
receive the dividend for the next calendar day if effected at 3:00 p.m. Central
time. Orders for purchase accompanied by a check or other negotiable bank draft
will be accepted and effected as of 3:00 p.m. Central time on the next business
day following receipt, and such shares will receive the dividend for the next
calendar day following the day when the purchase is effected. If an order is
accompanied by a check drawn on a foreign bank, funds must normally be collected
on such check before shares will be purchased.
If payment is wired in Federal Funds, the payment should be directed to UMB Bank
N.A. (ABA #101-000-695), 10th and Grand Avenue, Kansas City, MO 64106 for credit
to the appropriate portfolio bank account (Treasury Portfolio 43:98-7036-760-2;
Government Securities Portfolio 44:98-0120-0321-1) and for further credit to
your account.
Selling and exchanging shares
Upon receipt by the shareholder service agent, Kemper Service Company, of a
request in the form described below, shares of a portfolio will be redeemed at
the next determined net asset value. If processed at 3:00 p.m. Central time, the
shareholder will receive that day's dividend. Requests received by the
shareholder service agent for expedited wire redemptions prior to 11:00 a.m.
Central time will result in shares being redeemed that day, and normally
proceeds will be sent to the designated account that day. A shareholder may use
either the regular or expedited redemption procedures. Shareholders who redeem
all their shares of a portfolio will receive the net asset value of such shares
and all declared but unpaid dividends on such shares.
Shareholders should contact the financial services firm through which shares
were purchased for redemption instructions. Any shareholder may request that a
portfolio redeem his or her shares. When shares are held for the account of a
shareholder by the portfolios' transfer agent, the shareholder may redeem them
by sending a written request with signatures guaranteed to Kemper Service
Company, P.O. Box 419153, Kansas City, Missouri 64141-6153.
An exchange of shares entails the sale of portfolio shares and subsequent
purchase of shares of a Kemper Fund.
Shareholders may obtain additional information about other ways to redeem
shares, such as telephone redemptions, expedited wire transfer redemptions, and
redemptions by draft, by contacting their financial services firm.
11
<PAGE>
Share certificates
When certificates for shares have been issued, they must be mailed to or
deposited with the Shareholder Service Agent, along with a duly endorsed stock
power, and accompanied by a written request for redemption. Redemption requests
and a stock power must be endorsed by the account holder, with signatures
guaranteed. The redemption request and stock power must be signed exactly as the
account is registered, including any special capacity of the registered owner.
Additional documentation may be requested, and a signature guarantee is normally
required, from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.
Distributions
The portfolios' dividends are declared daily and distributed monthly to
shareholders. Any dividends or capital gains distributions declared in October,
November or December with a record date in such month and paid during the
following January will be treated by shareholders for federal income tax
purposes as if received on December 31 of the calendar year declared.
A shareholder may choose to receive distributions in cash or have them
reinvested in additional shares of a portfolio. If an investment is in the form
of a retirement plan, all dividends and capital gains distributions must be
reinvested into the shareholder's account.
Dividends will be reinvested unless the shareholder elects to receive them in
cash. The tax status of dividends is the same whether they are reinvested or
paid in cash. Exchanges among other mutual funds may also be taxable events.
Taxes
Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable to
shareholders as long-term capital gains, regardless of the length of time
shareholders have owned shares. Short-term capital gains and any other taxable
income distributions are taxable as ordinary income. A portion of dividends from
ordinary income may qualify for the dividends-received deduction for
corporations.
Each portfolio sends detailed tax information about the amount and type of its
distributions by January 31 of the following year.
Each portfolio may be required to withhold U.S. federal income tax at the rate
of 31% of all taxable distributions payable to shareholders who fail to provide
the portfolio with their correct taxpayer identification number or to make
required certifications, or who have been notified by the IRS that they are
subject to backup withholding. Any such withheld amounts may be credited against
the shareholder's U.S. federal income tax liability.
You may be subject to state, local and foreign taxes on portfolio distributions
and dispositions of portfolio shares. You should consult your tax advisor
regarding the particular tax consequences of an investment in a portfolio.
12
<PAGE>
Financial highlights
The financial highlights table for each portfolio is intended to help you
understand financial performance for the periods indicated. The total return
figures show what an investor would have earned on an investment in a portfolio
assuming reinvestment of all dividends and distributions. This information has
been audited by Ernst & Young LLP, whose report, along with financial
statements, is included in each annual report, which is available upon request
(see back cover).
Government Securities Portfolio
<TABLE>
<CAPTION>
Year ended March 31,
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<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 .05 .05 .05 .06 .05
- ---------------------------------------------------------------------------------------------------------------------
Less dividends declared .05 .05 .05 .06 .05
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------
Total Return 5.20% 5.50 5.30 5.74 4.74
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets after Expense Absorption:
Expenses .25% .25 .25 .25 .25
- ---------------------------------------------------------------------------------------------------------------------
Net investment income 5.05% 5.37 5.17 5.57 4.72
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets before Expense Absorption:
Expenses .33% .38 .32 .32 .33
- ---------------------------------------------------------------------------------------------------------------------
Net investment income 4.97% 5.24 5.10 5.50 4.64
- ---------------------------------------------------------------------------------------------------------------------
Supplemental Data:
Net assets at end of year (in thousands) $490,127 312,194 168,933 230,944 176,024
- ---------------------------------------------------------------------------------------------------------------------
Treasury Portfolio
Year ended March 31,
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance:
Net asset value, beginning of year $1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------
Net investment income .05 .05 .05 .05 .05
- ---------------------------------------------------------------------------------------------------------------------
Less dividends declared .05 .05 .05 .05 .05
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------
Total Return 5.03% 5.34 5.15 5.66 4.69
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets after Expense Absorption:
Expenses .25% .25 .25 .25 .25
- ---------------------------------------------------------------------------------------------------------------------
Net investment income 4.92% 5.21 5.03 5.48 4.76
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets before Expense Absorption:
Expenses .37% .38 .37 .37 .39
- ---------------------------------------------------------------------------------------------------------------------
Net investment income 4.80% 5.08 4.91 5.36 4.62
- ---------------------------------------------------------------------------------------------------------------------
Supplemental Data:
Net assets at end of year (in thousands) $58,402 74,290 63,347 101,576 65,389
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Total returns would have been lower had certain expenses not been capped.
13
<PAGE>
Additional information about the portfolios may be found in the Statement of
Additional Information and in shareholder reports. Shareholder inquiries may be
made by calling the toll-free telephone number listed below. The Statement of
Additional Information contains more detailed information on each portfolio's
investments and operations. The semiannual and annual shareholder reports
contain a discussion of the market conditions and the investment strategies that
significantly affected the portfolios' performance during the last fiscal year,
as well as a listing of portfolio holdings and financial statements. These and
other portfolio documents may be obtained without charge from your financial
adviser, from the Shareholder Service Agent at 1-800-231-8568, and from the
Securities and Exchange Commission Web site (http://www.sec.gov). You can also
visit or write the SEC and obtain copies for a fee: Public Reference Section,
Securities and Exchange Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549 (1-800-SEC-0330).
The Statement of Additional Information dated August 1, 1999 is incorporated by
reference into this prospectus (is legally a part of this prospectus).
Investment Company Act file number:
Investors Cash Trust 811-6103
14
<PAGE>
INVESTORS CASH TRUST
STATEMENT OF ADDITIONAL INFORMATION
August 1, 1999
Government Securities Portfolio
Treasury Portfolio
222 South Riverside Plaza, Chicago, Illinois 60606
1-800-231-8568
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the prospectus of Investors Cash Trust (the "Fund")
dated August 1, 1999. The prospectus may be obtained without charge from the
Fund, and is also available along with other related materials on the SEC's
Internet Web site (http://www.sec.gov).
------------
TABLE OF CONTENTS
Page
----
Investment Restrictions............................................ 1
Investment Policies and Techniques................................. 2
Investment Manager and Shareholder Services........................ 4
Portfolio Transactions............................................. 7
Purchase and Redemption of Shares.................................. 8
Dividends, Taxes and Net Asset Value............................... 11
Performance........................................................ 13
Officers and Trustees.............................................. 15
Special Features................................................... 18
Shareholder Rights................................................. 19
The financial statements appearing in the Fund's 1999 Annual Report to
Shareholders are incorporated herein by reference. The Fund's Annual Report
accompanies this Statement of Additional Information, and may be obtained
without charge by calling 1-800-231-8568.
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted for the Government Securities Portfolio and Treasury
Portfolio certain investment restrictions which cannot be changed for a
Portfolio without approval by holders of a majority of its outstanding voting
shares. As defined in the Investment Company Act of 1940, as amended (the "1940
Act"), this means the lesser of the vote of (a) 67% of the Portfolio's shares
present at a meeting where more than 50% of the outstanding shares of the
Portfolio are present in person or by proxy; or (b) more than 50% of the
Portfolio's outstanding shares. Except as otherwise noted, the Portfolio's
investment objective and other policies may be changed by the Portfolio's Board
of Trustees, without a vote of shareholders.
The Fund has elected to be classified as a diversified open-end investment
company.
As a matter of fundamental policy, each Portfolio may not:
1. borrow money, except as permitted under the 1940 Act, and as interpreted
or modified by regulatory authority having jurisdiction, from time to time;
2. issue senior securities, except as permitted under the 1940 Act, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time;
3. concentrate its investments in a particular industry, as that term is used
in the 1940 Act, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time;
4. engage in the business of underwriting securities issued by others, except
to the extent that a Portfolio may be deemed to be an underwriter in
connection with the disposition of portfolio securities;
5. purchase or sell real estate, which term does not include securities of
companies which deal in real estate or mortgages or investments secured by
real estate or interests therein, except that a Portfolio reserves freedom
of action to hold and to sell real estate acquired as a result of the
Portfolio's ownership of securities;
6. purchase physical commodities or contracts relating to physical
commodities; or
7. make loans, except as permitted under the 1940 Act, and as interpreted
or modified by regulatory authority having jurisdiction, from time to
time.
The following policies are non-fundamental, and may be changed or eliminated for
each Portfolio by the Fund's Board without a vote of shareholders:
Each of the Government Securities Portfolio and the Treasury Portfolio may not:
1. make short sales of securities, or purchase any securities on margin
except to obtain such short-term credits as may be necessary for the
clearance of transactions; or
2. write, purchase, or sell puts, calls or combinations thereof.
The Government Securities Portfolio may not:
1. Purchase any securities other than obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, and repurchase
agreements of such obligations, except in connection with a master/feeder
fund structure. However, if the Fund implements a master/feeder fund
structure, shareholder approval is required.
<PAGE>
The Treasury Portfolio may not:
1. Purchase any securities other than obligations issued by the U.S.
Government and repurchase agreements of such obligations, except in
connection with a master/feeder fund structure. However, if the Fund
implements a master/feeder fund structure, shareholder approval is required
INVESTMENT POLICIES AND TECHNIQUES
Descriptions in this Statement of Additional Information of a particular
investment practice or technique in which a Portfolio may engage or a financial
instrument which the Portfolio may purchase are meant to describe the spectrum
of investments that Scudder Kemper Investments, Inc. (the "Adviser"), in its
discretion, might, but is not required to, use in managing a Portfolio's assets.
The Adviser may, in its discretion, at any time, employ such practice, technique
or instrument for one or more funds but not for all funds advised by it.
Furthermore, it is possible that certain types of financial instruments or
investment techniques described herein may not be available, permissible,
economically feasible or effective for their intended purposes in all markets.
Certain practices, techniques, or instruments may not be principal activities of
a Portfolio, but, to the extent employed, could, from time to time, have a
material impact on the Portfolio's performance.
The Portfolios described in this Statement of Additional seek to provide maximum
current income consistent with the stability of capital. Each Portfolio is
managed to maintain a net asset value of $1.00 per share.
Each Portfolio is designed primarily for state and local governments and related
agencies, school districts and other tax-exempt organizations to invest the
proceeds of tax-exempt bonds and working capital.
The Portfolios' will not purchase illiquid securities, including repurchase
agreements maturing in more than seven days, if, as a result thereof, more than
10% of a Portfolio's net assets, valued at the time of the transaction, would be
invested in such securities.
Government Securities Portfolio. The Government Securities Portfolio seeks
maximum current income consistent with stability of capital. The Portfolio
pursues its objective by investing exclusively in U.S. Treasury bills, notes,
bonds and other obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements of such obligations. All
securities purchased mature in 12 months or less. Some securities issued by U.S.
Government agencies or instrumentalities are supported only by the credit of the
agency or instrumentality, such as those issued by the Federal Home Loan Bank;
and others have an additional line of credit with the U.S. Treasury, such as
those issued by the Federal National Mortgage Association and Farm Credit
System. Also, as to securities supported only by the credit of the issuing
agency or instrumentality or by an additional line of credit with the U.S.
Treasury, there is no guarantee that the U.S. Government will provide support to
such agencies or instrumentalities and such securities may involve risk of loss
of principal and interest. The Portfolio's investments in obligations issued or
guaranteed by U.S. Government agencies or instrumentalities currently are
limited to those issued or guaranteed by the following entities: Federal Land
Bank, Farm Credit System, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, Government National Mortgage
Association and Export-Import Credit Bank. The foregoing list of acceptable
entities is subject to change by action of the Fund's Board of Trustees;
however, the Fund will provide written notice to shareholders at least sixty
(60) days before any purchase by the Portfolio of obligations issued or
guaranteed by an entity not named above.
Treasury Portfolio. The Treasury Portfolio seeks maximum current income
consistent with stability of capital. The Portfolio pursues its objective by
investing exclusively in U.S. Treasury bills, notes, bonds and other obligations
issued by the U.S. Government and related repurchase agreements. All securities
purchased mature in 12 months or less. The payment of principal and interest on
the securities in the Portfolio's portfolio is backed by the full faith and
credit of the U.S. Government. See below for information regarding repurchase
agreements.
There can be no assurance that each Portfolio's objective can be met.
2
<PAGE>
Repurchase Agreements. Each Portfolio may enter into repurchase agreements with
any member bank of the Federal Reserve System or any domestic broker/dealer
which is recognized as a reporting Government securities dealer, if the
creditworthiness of the bank or broker/dealer has been determined by the Adviser
to be at least as high as that of other obligations a Portfolio may purchase or
to be at least equal to that of issuers of commercial paper rated within the two
highest grades assigned by Moody's, S&P or Fitch.
A repurchase agreement provides a means for a Portfolio to earn taxable income
on funds for periods as short as overnight. It is an arrangement under which the
purchaser (i.e., the Portfolio) acquires a security ("Obligation") and the
seller agrees, at the time of sale, to repurchase the Obligation at a specified
time and price. Securities subject to a repurchase agreement are held in a
segregated account, and the value of such securities kept at least equal to the
repurchase price on a daily basis. The repurchase price may be higher than the
purchase price, the difference being income to the Portfolio, or the purchase
and repurchase prices may be the same, with interest at a stated rate due to the
Portfolio together with the repurchase price on the date of repurchase. In
either case, the income to a Portfolio (which is taxable) is unrelated to the
interest rate on the Obligation itself. Obligations will be held by the
custodian or in the Federal Reserve Book Entry system.
For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan from
a Portfolio to the seller of the Obligation subject to the repurchase agreement,
and is therefore subject to that Portfolio's investment restriction applicable
to loans. It is not clear whether a court would consider the Obligation
purchased by a Portfolio subject to a repurchase agreement as being owned by
that Portfolio or as being collateral for a loan by the Portfolio to the seller.
In the event of the commencement of bankruptcy or insolvency proceedings with
respect to the seller of the Obligation before repurchase of the Obligation
under a repurchase agreement, a Portfolio may encounter delay and incur costs
before being able to sell the security. Delays may involve loss of interest or
decline in price of the Obligation. If the court characterized the transaction
as a loan and a Portfolio has not perfected an interest in the Obligation, that
Portfolio may be required to return the Obligation to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, a
Portfolio is at risk of losing some or all of the principal and income involved
in the transaction. As with any unsecured debt obligation purchased for each
Portfolio, the Adviser seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller of the Obligation. Apart from the risk of bankruptcy or insolvency
proceedings, there is also the risk that the seller may fail to repurchase the
Obligation, in which case the Portfolio may incur a loss if the proceeds to the
Portfolio of the sale to a third party are less than the repurchase price.
However, if the market value of the Obligation subject to the repurchase
agreement becomes less than the repurchase price (including interest), each
Portfolio will direct the seller of the Obligation to deliver additional
securities so that the market value of all securities subject to the repurchase
agreement will equal or exceed the repurchase price. It is possible that a
Portfolio will be unsuccessful in seeking to enforce the seller's contractual
obligation to deliver additional securities.
Repurchase agreements are instruments under which a Portfolio acquires ownership
of a U.S. Government security from a broker-dealer or bank that agrees to
repurchase the U.S. Government security at a mutually agreed upon time and price
(which price is higher than the purchase price), thereby determining the yield
during the Portfolio's holding period. Maturity of the securities subject to
repurchase may exceed one year. In the event of a bankruptcy or other default of
a seller of a repurchase agreement, a Portfolio might incur expenses in
enforcing its rights, and could experience losses, including a decline in the
value of the underlying securities and loss of income. Currently, a Portfolio
will only enter into repurchase agreements with primary U.S. Government
securities dealers recognized by the Federal Reserve Bank of New York that have
been approved pursuant to procedures adopted by the Board of Trustees of the
Fund. A Portfolio will not purchase illiquid securities including repurchase
agreements maturing in more than seven days if, as a result thereof, more than
10% of a Portfolio's net assets valued at the time of the transaction would be
invested in such securities.
A Portfolio may invest in U.S. Government securities having rates of interest
that are adjusted periodically or which "float" continuously according to
formulae intended to minimize fluctuation in values of the instruments
("Variable Rate Securities"). The interest rate of Variable Rate Securities
ordinarily is determined by reference to or is a percentage of an objective
standard such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, or the
rate of return on commercial paper or bank certificates of deposit. Generally,
the changes in the interest rate on Variable Rate
3
<PAGE>
Securities reduce the fluctuation in the market value of such securities.
Accordingly, as interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than for fixed-rate obligations. Some
Variable Rate Securities ("Variable Rate Demand Securities") have a demand
feature entitling the purchaser to resell the securities at an amount
approximately equal to amortized cost or the principal amount thereof plus
accrued interest. As is the case for other Variable Rate Securities, the
interest rate on Variable Rate Demand Securities varies according to some
objective standard intended to minimize fluctuation in the values of the
instruments. Each Portfolio determines the maturity of Variable Rate Securities
in accordance with Rule 2a-7, which allows the Portfolio to consider certain of
such instruments as having maturities shorter than the maturity date on the face
of the instrument.
INVESTMENT MANAGER AND SHAREHOLDER SERVICES
Investment Manager. Scudder Kemper Investments, Inc., 345 Park Avenue, New York,
New York, is the Fund's investment manager. The Adviser is approximately 70%
owned by Zurich Insurance Company, a leading internationally recognized provider
of insurance and financial services in property/casualty and life insurance,
reinsurance and structured financial solutions as well as asset management. The
balance of Scudder Kemper is owned by Scudder Kemper's officers and employees.
Responsibility for overall management of each Portfolio rests with the Fund's
Board of Trustees and officers. Pursuant to an investment management agreement,
the Adviser acts as each Portfolio's investment adviser, manages its
investments, administers its business affairs, furnishes office facilities and
equipment, provides clerical and administrative services and permits any of its
officers or employees to serve without compensation as trustees or officers of
the Fund if elected to such positions. The Fund pays the expenses of its
operations, including the fees and expenses of independent auditors, counsel,
custodian and transfer agent and the cost of share certificates, reports and
notices to shareholders, costs of calculating net asset value and maintaining
all accounting records related thereto, brokerage commissions or transaction
costs, taxes, registration fees, the fees and expenses of qualifying the Fund
and its shares for distribution under federal and state securities laws and
membership dues in the Investment Company Institute or any similar organization.
The Fund's expenses generally are allocated between the Portfolios on the basis
of relative net assets at the time of allocation, except that expenses directly
attributable to a particular Portfolio are charged to that Portfolio.
The agreement provides that the Adviser shall not be liable for any error of
judgment or of law, or for any loss suffered by the Fund in connection with the
matters to which the agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under the agreement.
The investment management agreement continues in effect from year to year so
long as its continuation is approved at least annually by (a) a majority vote of
the trustees who are not parties to such agreement or interested persons of any
such party except in their capacity as trustees of the Fund, cast in person at a
meeting called for such purpose, and (b) by the shareholders of each Portfolio
or the Board of Trustees. If continuation is not approved for a Portfolio, the
investment management agreement nevertheless may continue in effect for any
Portfolio for which it is approved, and the Adviser may continue to serve as
investment manager for the Portfolio for which it is not approved to the extent
permitted by the 1940 Act. It may be terminated at any time upon 60 days' notice
by either party, or by a majority vote of the outstanding shares, and will
terminate automatically upon assignment.
In certain cases the investments for the Portfolios are managed by the same
individuals who manage one or more other mutual funds advised by the Adviser
that have similar names, objectives and investment styles as the Portfolios. You
should be aware that the Portfolios are likely to differ from these other mutual
funds in size, cash flow pattern and tax matters. Accordingly, the holdings and
performance of the Portfolios can be expected to vary from those of the other
mutual funds.
4
<PAGE>
On December 31, 1997, pursuant to the terms of an agreement, Scudder, Stevens &
Clark, Inc. ("Scudder"), and Zurich Insurance Company ("Zurich"), formed a new
global investment organization by combining Scudder with Zurich Kemper
Investments, Inc. ("ZKI") and Zurich Kemper Value Advisors, Inc. ("ZKVA"),
former subsidiaries of Zurich. ZKI was the former investment manager for each
Portfolio. Upon completion of the transaction, Scudder changed its name to
Scudder Kemper Investments, Inc. As a result of the transaction, Zurich owns
approximately 70% of Scudder Kemper, with the balance owned by Scudder Kemper's
officers and employees.
On September 7, 1998, the businesses of Zurich (including Zurich's 70% interest
in the Adviser) and the financial services businesses of B.A.T Industries p.l.c.
("B.A.T") were combined to form a new global insurance and financial services
company known as Zurich Financial Services Group. By way of a dual holding
company structure, former Zurich shareholders initially owned approximately 57%
of Zurich Financial Services Group, with the balance initially owned by former
B.A.T shareholders.
Upon consummation of this transaction, the Portfolios' then current investment
management agreement with the Adviser was deemed to have been assigned and,
therefore, terminated. The Board approved a new investment management agreement
(the "Agreement") with the Adviser, which is substantially identical to the
prior investment management agreement, except for the date of execution and
termination. The Agreement became effective on September 7, 1998, upon the
termination of the then current investment management agreement, and was
approved at a shareholder meeting held in December 1998.
The Agreement, dated September 7, 1998, was approved by the Trustees of the Fund
on August 11, 1998. The Agreement will continue in effect until September 30,
1999 and from year to year thereafter only if its continuance is approved
annually by the vote of a majority of those Trustees who are not parties to such
Agreement or interested persons of the Adviser or the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and either by a vote
of the Fund's Trustees or of a majority of the outstanding voting securities of
the Fund. The Agreement may be terminated at any time without payment of penalty
by either party on sixty days' written notice, and automatically terminates in
the event of its assignment.
For services and facilities furnished, the Fund pays a monthly investment
management fee of 1/12 of 0.15% of average daily net assets of the Government
Securities and Treasury Portfolios. The investment management fee is computed
based on the combined average daily net assets of all Portfolios and allocated
between the Portfolios based upon the relative net asset levels. Pursuant to the
investment management agreement, the Fund incurred investment management fees
for the Government Securities Portfolio of $535,000, $342,000 and $320,000 for
the fiscal years ended March 31, 1999, 1998 and 1997, respectively. The Fund
incurred investment management fees of $89,000, $91,000 and $122,000 for the
Treasury Portfolio for the fiscal years ended March 31, 1999, 1998 and 1997,
respectively By contract, the Adviser and certain affiliates have agreed to
limit operating expenses to 0.25% of average daily net assets of a Portfolio on
an annual basis until July 31, 2000. For this purpose, "Portfolio operating
expenses" do not include taxes, interest, extraordinary expenses, brokerage
commissions or transaction costs. During the fiscal years ended March 31, 1999,
1998, 1997, under expense limits then in effect, the Adviser (or an affiliate)
absorbed $308,000, $294,000 and $150,000, respectively, of the Government
Securities Portfolio's operating expenses. During the fiscal years ended March
31, 1999, 1998 and 1997, under expense limits then in effect, the Adviser (or an
affiliate) absorbed $71,000, $81,000 and $98,000, respectively, of the Treasury
Portfolio's operating expenses.
Certain trustees or officers of the Fund are also directors or officers of the
Adviser and its affiliates as indicated under "Officers and Trustees."
5
<PAGE>
Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), Two
International Place, Boston, Massachusetts 02110, a subsidiary of the Adviser,
is responsible for determining the daily net asset value per share of each
Portfolio and maintaining all accounting records related thereto. Currently,
SFAC receives no fee for its services to the Fund; however, subject to Board
approval, at some time in the future, SFAC may seek payment for its services
under this agreement.
Underwriter. Pursuant to an underwriting agreement, Kemper Distributors, Inc.
("KDI" ), 222 South Riverside Plaza, Chicago, Illinois 60606, an affiliate of
the Adviser, serves as the principal underwriter of the continuous offering of
the Fund's shares. The Underwriter receives no compensation from the Fund as
principal underwriter and pays all expenses of distribution of the Fund's shares
under the underwriting agreement not otherwise paid by dealers or other
financial services firms.
Administrator. Pursuant to an administrative services agreement ("administrative
agreement"), KDI bears all of its expenses of providing services pursuant to the
administrative agreement between KDI and each Portfolio, including the payment
of service fees. The Administrator also serves as administrator to the Fund to
provide information and services for shareholders. The administrative agreement
provides that the Administrator shall appoint various firms to provide
administrative services for their customers or clients who are shareholders of
the Fund. The firms are to provide such office space and equipment, telephone
facilities and personnel as are necessary or appropriate for providing
information and services to Fund shareholders. For its services, the Fund pays
the Administrator an annual administrative services fee, payable monthly, of
0.10% of average daily net assets of each Portfolio.
The Administrator has related services agreements with various firms to provide
administrative services for Fund shareholders. Such services and assistance may
include, but are not limited to, establishing and maintaining shareholder
accounts and records, processing purchase and redemption transactions, providing
automatic investment in Portfolio shares of client account balances, answering
routine inquiries regarding the Fund, assisting clients in changing account
options, designations and addresses, and such other services as may be agreed
upon from time to time and as may be permitted by applicable statute, rule or
regulation. The Administrator also has services agreements with banking firms to
provide the above listed services, except for certain distribution services that
the banks may be prohibited from providing, for their clients who wish to invest
in the Fund. The Administrator also may provide some of the above services for
the Fund. The Administrator normally pays the firms a monthly service fee at an
annual rate that ranges between 0.05% and 0.10% of average net assets of those
Fund accounts that it maintains and services. The Administrator may elect to
keep a portion of the total administration fee to compensate itself for
functions performed for the Fund. During the fiscal years ended March 31, 1999,
1998 and 1997, the Government Securities Portfolio incurred administrative
services fees of $357,000, $228,000 and $213,000, respectively, and the
Administrator (or the Adviser as predecessor to the Administrator) paid
$174,000, $114,000 and $106,000, respectively, as service fees to firms. During
the fiscal years ended March 31, 1999, 1998 and 1997, the Treasury Portfolio
incurred administrative services fees of $59,000, $60,000 and $81,000,
respectively, and the Administrator (or the Adviser as predecessor to the
Administrator) paid $30,000, $31,000 and $41,000, respectively, as service fees
to firms. During the fiscal years ended March 31, 1999, 1998 and 1997, neither
Portfolio paid fees to firms then affiliated with the Administrator.
Custodian, Transfer Agent and Shareholder Service Agent. State Street Bank and
Trust Company ("State Street"), 225 Franklin Street, Boston, Massachusetts
02110, as custodian, has custody of all securities and cash of the Fund. State
Street attends to the collection of principal and income, and payment for and
collection of proceeds of securities bought and sold by the Fund. Investors
Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri
64105, is the transfer agent of the Fund. Pursuant to a services agreement with
IFTC, Kemper Service Company, an affiliate of the Adviser, serves as
"Shareholder Service Agent." IFTC receives, as transfer agent, and pays to the
Shareholder Service Agent annual account fees of a maximum of $13 per year per
account plus out-of-pocket expense reimbursement. During the fiscal year ended
March 31, 1999 and 1998, IFTC remitted shareholder service fees in the amount of
$41,000 and $26,000, respectively, to the Shareholder Service Agent.
6
<PAGE>
Independent Auditors and Reports to Shareholders. The Fund's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Fund's annual financial statements, review certain
regulatory reports and the Fund's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Fund. Shareholders will receive annual audited financial statements
and semi-annual unaudited financial statements.
Legal Counsel. Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street,
Chicago, Illinois, 60601, serves as legal counsel for the Fund.
PORTFOLIO TRANSACTIONS
Brokerage
Allocation of brokerage is supervised by the Adviser.
The primary objective of the Adviser in placing orders for the purchase and sale
of securities for a Portfolio is to obtain the most favorable net results taking
into account such factors as price, commission where applicable, size of order,
difficulty of execution and skill required of the executing broker-dealer. The
Adviser seeks to evaluate the overall reasonableness of brokerage commissions
paid (to the extent applicable) through its familiarity with commissions charged
on comparable transactions, as well as by comparing commissions paid by a
Portfolio to reported commissions paid by others. The Adviser reviews on a
routine basis commission rates, execution and settlement services performed,
making internal and external comparisons.
When it can be done consistently with the policy of obtaining the most favorable
net results, it is the Adviser's practice to place such orders with
broker-dealers who supply research, market and statistical information to a
Fund. The term "research, market and statistical information" includes advice as
to the value of securities: the advisability of investing in, purchasing or
selling securities; the availability of securities or purchasers or sellers of
securities; and analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
The Adviser is authorized when placing portfolio transactions for a Fund to pay
a brokerage commission in excess of that which another broker might charge for
executing the same transaction solely on account of the receipt of research,
market or statistical information. In effecting transactions solely on account
of the receipt of research, market or statistical information. The Adviser may
place orders with a broker-dealer on the basis that the broker-dealer has or has
not sold shares of a Portfolio. In effecting transactions in over-the-counter
securities, orders are placed with the principal market makers for the security
being traded unless, after exercising care, it appears that more favorable
results are available elsewhere.
In selecting among firms believed to meet the criteria for handling a particular
transaction, the Adviser may give consideration to those firms that have sold or
are selling shares of a Fund managed by the Adviser.
To the maximum extent feasible, it is expected that the Adviser will place
orders for portfolio transactions through Scudder Investor Services, Inc.
("SIS"), a corporation registered as a broker-dealer and a subsidiary of the
Adviser. SIS will place orders on behalf of the Fund with issuers, underwriters
or other brokers and dealers. SIS will not receive any commission, fee or other
remuneration from the Fund for this service.
Although certain research, market and statistical information from
broker-dealers may be useful to a Fund and to the Adviser, it is the opinion of
the Adviser that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Adviser's
staff. Such information may be useful to the Adviser in providing services to
clients other than the Fund and not all such information is used by the Adviser
in connection with the Fund. Conversely, such information provided to the
Adviser by broker-dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to a
Fund.
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The Trustees review, from time to time, whether the recapture for the benefit of
a Fund of some portion of the brokerage commissions or similar fees paid by a
Fund on portfolio transactions is legally permissible and advisable.
A Fund's average portfolio turnover rate is the ratio of the lesser of sales or
purchases to the monthly average value of the portfolio securities owned during
the year, excluding all securities with maturities or expiration dates at the
time of acquisition of one year or less. A higher rate involves greater
brokerage transaction expenses to a Fund and may result in the realization of
net capital gains, which would be taxable to shareholders, when distributed.
Purchases and sales are made for a Fund's portfolio whenever necessary, in
management's opinion, to meet a Fund's objective.
Money market instruments are normally purchased in principal transactions
directly from the issuer or from an underwriter or market maker. There usually
are no brokerage commissions paid by the Fund for such purchases. During the
last three fiscal years the Fund paid no portfolio brokerage commissions.
Purchases from underwriters will include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers serving as market makers
will include the spread between the bid and asked prices.
PURCHASE AND REDEMPTION OF SHARES
Purchase of Shares
Shares of a Portfolio are sold at their net asset value next determined after an
order and payment are received in the form described in the prospectus. The
minimum initial investment is $1 million but such minimum amount may be changed
at any time. The Fund may waive the minimum for purchases by trustees,
directors, officers or employees of the Fund or the Adviser and its affiliates.
An investor wishing to open an account should use the Account Application
available from the Fund or financial services firms. Orders for the purchase of
shares that are accompanied by a check drawn on a foreign bank (other than a
check drawn on a Canadian bank in U.S. Dollars) will not be considered in proper
form and will not be processed unless and until the Fund determines that it has
received payment of the proceeds of the check. The time required for such a
determination will vary and cannot be determined in advance.
Redemption of Shares
General. Upon receipt by the Shareholder Service Agent of a request in the form
described below, shares of a Portfolio will be redeemed by the Fund at the next
determined net asset value. If processed at 3:00 p.m. Chicago time, the
shareholder will receive that day's dividend. A shareholder may use either the
regular or expedited redemption procedures. Shareholders who redeem all their
shares of a Portfolio will receive the net asset value of such shares and all
declared but unpaid dividends on such shares.
If shares of a Portfolio to be redeemed were purchased by check or through
certain Automated Clearing House ("ACH") transactions, the Fund may delay
transmittal of redemption proceeds until it has determined that collected funds
have been received for the purchase of such shares, which will be up to 10 days
from receipt by the Fund of the purchase amount. Shareholders may not use ACH or
Redemption Checks (see "Redemptions by Draft") until the shares being redeemed
have been owned for at least 10 days and shareholders may not use such
procedures to redeem shares held in certificated form. There is no delay when
shares being redeemed were purchased by wiring Federal Funds.
The Fund may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period in
which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of a Portfolio's investments
is not reasonably practicable, or (ii) it is not reasonably practicable for the
Fund to determine the value of its net assets, or (c) for such other periods as
the Securities and Exchange Commission may by order permit for the protection of
the Fund's shareholders.
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Although it is the Fund's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Fund will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition would incur certain
transaction costs. Such a redemption would not be as liquid as a redemption
entirely in cash. The Fund has elected to be governed by Rule 18f-1 under the
1940 Act, pursuant to which the Fund is obligated to redeem shares of a
Portfolio solely in cash up to the lesser of $250,000 or 1% of the net assets of
the Portfolio during any 90-day period for any one shareholder of record.
If shares being redeemed were acquired from an exchange of shares of a mutual
fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
by the Fund may be subject to a contingent deferred sales charge as explained in
such prospectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individual
and institutional accounts and pre-authorized telephone redemption transactions
for certain institutional accounts. Shareholders may choose these privileges on
the account application or by contacting the Shareholder Service Agent for
appropriate instructions. Please note that the telephone exchange privilege is
automatic unless the shareholder refuses it on the account application. The Fund
or its agents may be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized telephone requests pursuant to these privileges,
unless the Fund or its agents reasonably believe, based upon reasonable
verification procedures, that the telephone instructions are genuine. The
shareholder will bear the risk of loss, resulting from fraudulent or
unauthorized transactions, as long as the reasonable verification procedures are
followed. The verification procedures include recording instructions, requiring
certain identifying information before acting upon instructions and sending
written confirmations.
Because of the high cost of maintaining small accounts, the Fund reserves the
right to redeem an account that falls below the minimum investment level. Thus,
a shareholder who makes only the minimum initial investment and then redeems any
portion thereof might have the account redeemed. A shareholder will be notified
in writing and will be allowed 60 days to make additional purchases to bring the
account value up to the minimum investment level before the Fund redeems the
shareholder account.
Financial services firms provide varying arrangements for their clients to
redeem Fund shares. Such firms may independently establish and charge amounts to
their clients for such services.
Regular Redemptions. When shares are held for the account of a shareholder by
the Fund's transfer agent, the shareholder may redeem them by sending a written
request with signatures guaranteed to Kemper Service Company, P.O. Box 419153,
Kansas City, Missouri 64141-6153. When certificates for shares have been issued,
they must be mailed to or deposited with the Shareholder Service Agent, along
with a duly endorsed stock power and accompanied by a written request for
redemption. Redemption requests and a stock power must be endorsed by the
account holder with signatures guaranteed by a commercial bank, trust company,
savings and loan association, federal savings bank, member firm of a national
securities exchange or other eligible financial institution. The redemption
request and stock power must be signed exactly as the account is registered
including any special capacity of the registered owner. Additional documentation
may be requested, and a signature guarantee is normally required, from
institutional and fiduciary account holders, such as corporations, custodians
(e.g., under the Uniform Transfers to Minors Act), executors, administrators,
trustees or guardians.
Telephone Redemptions. If the proceeds of the redemption are $50,000 or less and
the proceeds are payable to the shareholder of record at the address of record,
normally a telephone request or a written request by any one account holder
without a signature guarantee is sufficient for redemptions by individual or
joint account holders, and trust, executor, guardian and custodian account
holders, provided the trustee, executor guardian or custodian is named in the
account registration. Other institutional account holders may exercise this
special privilege of redeeming shares by
9
<PAGE>
telephone request or written request without signature guarantee subject to the
same conditions as individual account holders and subject to the limitations on
liability described under "General" above, provided that this privilege has been
pre-authorized by the institutional account holder or guardian account holder by
written instruction to the Shareholder Service Agent with signatures guaranteed.
Telephone requests may be made by calling 1-800-231-8568. Shares purchased by
check or through certain ACH transactions may not be redeemed under this
privilege of redeeming shares by telephone request until such shares have been
owned for at least 10 days. This privilege of redeeming shares by telephone
request or by written request without a signature guarantee may not be used to
redeem shares held in certificated form and may not be used if the shareholder's
account has had an address change within 30 days of the redemption request.
During periods when it is difficult to contact the Shareholder Service Agent by
telephone, it may be difficult to use the telephone redemption privilege,
although investors can still redeem by mail. The Fund reserves the right to
terminate or modify this privilege at any time.
Expedited Wire Transfer Redemptions. If the account holder has given
authorization for expedited wire redemption to the account holder's brokerage or
bank account, shares can be redeemed and proceeds sent by a federal wire
transfer to a single previously designated account. Requests received by the
Shareholder Service Agent prior to 11:00 a.m. Chicago time will result in shares
being redeemed that day and normally the proceeds will be sent to the designated
account that day. Once authorization is on file, the Shareholder Service Agent
will honor requests by telephone at 1-800-231-8568 or in writing, subject to the
limitations on liability described under "General" above. The Fund is not
responsible for the efficiency of the federal wire system or the account
holder's financial services firm or bank. The Fund currently does not charge the
account holder for wire transfers. The account holder is responsible for any
charges imposed by the account holder's firm or bank. There is a $1,000 wire
redemption minimum. To change the designated account to receive wire redemption
proceeds, send a written request to the Shareholder Service Agent with
signatures guaranteed as described above, or contact the firm through which
shares of the Fund were purchased. Shares purchased by check or through certain
ACH transactions may not be redeemed by wire transfer until the shares have been
owned for at least 10 days. Account holders may not use this procedure to redeem
shares held in certificated form. During periods when it is difficult to contact
the Shareholder Service Agent by telephone, it may be difficult to use the
expedited wire transfer redemption privilege. The Fund reserves the right to
terminate or modify this privilege at any time.
Redemptions By Draft. Upon request, shareholders will be provided with drafts to
be drawn on the Fund ("Redemption Checks"). These Redemption Checks may be made
payable to the order of any person for not more than $5 million. Shareholders
should not write Redemption Checks in an amount less than $250 since a $10
service fee will be charged as described below. When a Redemption Check is
presented for payment, a sufficient number of full and fractional shares in the
shareholder's account will be redeemed as of the next determined net asset value
to cover the amount of the Redemption Check. This will enable the shareholder to
continue earning dividends until the Fund receives the Redemption Check. A
shareholder wishing to use this method of redemption must complete and file an
Account Application which is available from the Fund or firms through which
shares were purchased. Redemption Checks should not be used to close an account
since the account normally includes accrued but unpaid dividends. The Fund
reserves the right to terminate or modify this privilege at any time. This
privilege may not be available through some firms that distribute shares of the
Fund. In addition, firms may impose minimum balance requirements in order to
offer this feature. Firms may also impose fees to investors for this privilege
or establish variations of minimum check amounts if approved by the Fund.
Unless one signer is authorized on the Account Application, Redemption Checks
must be signed by all account holders. Any change in the signature authorization
must be made by written notice to the Shareholder Service Agent. Shares
purchased by check or through certain ACH transactions may not be redeemed by
Redemption Check until the shares have been on the Fund's books for at least 10
days. Shareholders may not use this procedure to redeem shares held in
certificated form. The Fund reserves the right to terminate or modify this
privilege at any time.
The Fund may refuse to honor Redemption Checks whenever the right of redemption
has been suspended or postponed, or whenever the account is otherwise impaired.
A $10 service fee will be charged when a Redemption Check is presented to redeem
Fund shares in excess of the value of a Fund account or in an amount less than
$250; when a Redemption Check is presented that would require redemption of
shares that were purchased by check or certain ACH transactions within 10 days;
or when "stop payment" of a Redemption Check is requested.
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DIVIDENDS, TAXES AND NET ASSET VALUE
Dividends. Dividends are declared daily and paid monthly. Shareholders will
receive cash dividends unless they elect to receive dividends in additional
shares. For cash dividends, checks will be mailed or proceeds wired within five
business days after the reinvestment date described below. For dividends paid in
additional shares, dividends will be reinvested monthly in shares of the same
Portfolio normally on the first day of each month, if a business day, otherwise
on the next business day. The Fund will pay shareholders who redeem their entire
accounts all unpaid dividends at the time of redemption not later than the next
dividend payment date.
Each Portfolio calculates its dividends based on its daily net investment
income. For this purpose, net investment income consists of (a) accrued interest
income plus or minus amortized discount or premium, (b) plus or minus all
short-term realized gains and losses on investments and (c) minus accrued
expenses. Expenses of the Fund are accrued each day. Since each Portfolio's
investments are valued at amortized cost, there will be no unrealized gains or
losses on such investments. However, should the net asset value of a Portfolio
deviate significantly from market value, the Board of Trustees could decide to
value the investments at market value and then unrealized gains and losses would
be included in net investment income above.
Dividends are paid in cash monthly and shareholders will receive monthly
confirmation of dividends and of purchase and redemption transactions.
Shareholders may select one of the following ways to receive dividends:
1. Receive Dividends in Cash. Checks will be mailed monthly, within five
business days of the reinvestment date (described below), to the shareholder or
any person designated by the shareholder. At the option of the shareholder, cash
dividends may be sent by Federal Funds wire. Shareholders may request to have
dividends sent by wire on the Account Application or by contacting the
Shareholder Service Agent. Dividends will be received in cash unless the
shareholder elects to have them reinvested. If an investment is in the form of a
retirement plan, all dividends and capital gains distributions must be
reinvested into the shareholder's account.
2. Reinvest Dividends at net asset value into additional shares of the same
Portfolio if so requested. Dividends are reinvested on the 1st day of each month
if a business day, otherwise on the next business day.
The Fund reinvests dividend checks (and future dividends) in shares of the Fund
if checks are returned as undeliverable. Dividends and other distributions in
the aggregate amount of $10 or less are automatically reinvested in shares of
the Fund unless the shareholder requests that such policy not be applied to the
shareholder's account.
Taxes. Each Portfolio intends to continue to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code (the "Code") and, if so
qualified, will not be subject to Federal income taxes to the extent its
earnings are distributed. Dividends derived from interest and short-term capital
gains are taxable as ordinary income whether received in cash or reinvested in
additional shares. Dividends from a Portfolio do not qualify for the dividends
received deduction available to corporate shareholders.
If for any taxable year a Portfolio does not qualify for the special federal
income tax treatment afforded regulated investment companies, all of its taxable
income will be subject to federal income tax at regular corporate rates (without
any deduction for distributions to its shareholders). In such event, dividend
distributions would be taxable to shareholders to the extent of current
accumulated earnings and profits, and would be eligible for the dividends
received deduction, in the case of corporate shareholders.
Dividends declared in October, November or December to shareholders of record as
of a date in one of those months and paid during the following January are
treated as paid on December 31 of the calendar year in which declared for
federal income tax purposes. The Fund may adjust its schedule for dividend
reinvestment for the month of December to assist it in complying with reporting
and minimum distribution requirements contained in the Code.
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The Code restricts the ability to invest tax-exempt bond proceeds at yields
materially higher than the yield on the issue. Tax advisers should be consulted
before investing tax-exempt bond proceeds in a Portfolio.
Portfolio dividends that are derived from interest on direct obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
from state and local taxes in certain states. In other states, arguments can be
made that such distributions should be exempt from state and local taxes based
on federal law, 31 U.S.C. Section 3124, and the U.S. Supreme Court's
interpretation of that provision in AMERICAN BANK AND TRUST CO. v. DALLAS
COUNTY, 463 U.S. 855 (1983). The Fund currently intends to advise shareholders
of the proportion of its dividends that consists of such interest. Shareholders
should consult their tax advisers regarding the possible exclusion of such
portion of their dividends for state and local income tax purposes.
Each Portfolio is required by law to withhold 31% of taxable dividends paid to
certain shareholders who do not furnish a correct taxpayer identification number
(in the case of individuals, a social security number) and in certain other
circumstances. Trustees of qualified retirement plans and 403(b)(7) accounts are
required by law to withhold 20% of the taxable portion of any distribution that
is eligible to be "rolled over." The 20% withholding requirement does not apply
to distributions from IRAs or any part of a distribution that is transferred
directly to another qualified retirement plan, 403(b)(7) account, or IRA.
Shareholders should consult their tax advisers regarding the 20% withholding
requirements.
Shareholders normally will receive monthly confirmations of dividends and of
purchase and redemption transactions except that confirmations of dividend
reinvestment for fiduciary accounts for which Investors Fiduciary Trust Company
serves as trustee will be sent quarterly. Firms may provide varying arrangements
with their clients with respect to confirmations. Tax information will be
provided annually. Shareholders are encouraged to retain copies of their account
confirmation statements or year-end statements for tax reporting purposes.
However, those who have incomplete records may obtain historical account
transaction information at a reasonable fee.
Net Asset Value. As described in the prospectus, each Portfolio values its
portfolio instruments at amortized cost, which does not take into account
unrealized capital gains or losses. This involves valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price a Portfolio would receive if it sold the
instrument. Calculations are made to compare the value of a Portfolio's
investments valued at amortized cost with market values. Market valuations are
obtained by using actual quotations provided by market makers, estimates of
market value, or values obtained from yield data relating to classes of money
market instruments published by reputable sources at the mean between the bid
and asked prices for the instruments. If a deviation of 1/2 of 1% or more were
to occur between the net asset value per share calculated by reference to market
values and a Portfolio's $1.00 per share net asset value, or if there were any
other deviation which the Board of Trustees of the Fund believed would result in
a material dilution to shareholders or purchasers, the Board of Trustees would
promptly consider what action, if any, should be initiated. If a Portfolio's net
asset value per share (computed using market values) declined, or were expected
to decline, below $1.00 (computed using amortized cost), the Board of Trustees
of the Fund might temporarily reduce or suspend dividend payments in an effort
to maintain the net asset value at $1.00 per share. As a result of such
reduction or suspension of dividends or other action by the Board of Trustees,
an investor would receive less income during a given period than if such a
reduction or suspension had not taken place. Such action could result in
investors receiving no dividend for the period during which they held their
shares and receiving, upon redemption, a price per share lower than that which
they paid. On the other hand, if a Portfolio's net asset value per share
(computed using market values) were to increase, or were anticipated to increase
above $1.00 (computed using amortized cost), the Board of Trustees of the Fund
might supplement dividends in an effort to maintain the net asset value at $1.00
per share.
PERFORMANCE
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From time to time, the Fund may advertise several types of performance
information for a Portfolio, including "yield" and "effective yield." Each of
these figures is based upon historical earnings and is not representative of the
future performance of a Portfolio. The yield of a Portfolio refers to the net
investment income generated by a hypothetical investment in the Portfolio over a
specific seven-day period. This net investment income is then annualized, which
means that the net investment income generated during the seven-day period is
assumed to be generated each week over an annual period and is shown as a
percentage of the investment. The effective yield is calculated similarly, but
the net investment income earned by the investment is assumed to be compounded
when annualized. The effective yield will be slightly higher than the yield due
to this compounding effect.
The historical performance calculation for a Portfolio may be shown in the form
of "yield" and "effective yield." These various measures of performance are
described below. The Adviser has contractually agreed to absorb certain
operating expenses of each Portfolio to the extent specified in the prospectus.
Without this expense absorption, the performance results noted herein for the
Government Securities and Treasury Portfolios would have been lower.
Each Portfolio's seven-day yield is computed in accordance with a standardized
method prescribed by rules of the Securities and Exchange Commission. Under that
method, the yield quotation is based on a seven-day period and is computed for
each Portfolio as follows. The first calculation is net investment income per
share, which is accrued interest on portfolio securities, plus or minus
amortized discount or premium, less accrued expenses. This number is then
divided by the price per share (expected to remain constant at $1.00) at the
beginning of the period ("base period return"). The result is then divided by 7
and multiplied by 365 and the resulting yield figure is carried to the nearest
one-hundredth of one percent. Realized capital gains or losses and unrealized
appreciation or depreciation of investments are not included in the
calculations. For the period ended March 31, 1999, the Government Securities
Portfolio's seven-day yield was 4.73% and the Treasury Portfolio's seven-day
yield was 4.53%.
Each Portfolio's seven-day effective yield is determined by taking the base
period return (computed as described above) and calculating the effect of
assumed compounding. The formula for the seven-day effective yield is:
(seven-day base period return +1)365/7 - 1. Each Portfolio may also advertise a
thirty-day effective yield in which case the formula is (thirty-day base period
return +1)365/30 - 1. For the period ended March 31, 1999, the Government
Securities Portfolio's seven-day effective yield was 4.84% and the Treasury
Portfolio's seven-day effective yield was 4.63%.
Each Portfolio's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in a Portfolio will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in a Portfolio is held, but also on such matters as
Portfolio expenses.
Investors have an extensive choice of money market funds and money market
deposit accounts and the information below may be useful to investors who wish
to compare the past performance of a Portfolio with that of its competitors.
Past performance cannot be a guarantee of future results.
The Fund may depict the historical performance of the securities in which the
Fund may invest over periods reflecting a variety of market or economic
conditions either alone or in comparison with alternative investments
performance indexes of those investments or economic indicators. The Fund may
also describe its portfolio holdings and depict its size or relative size
compared to other mutual funds, the number and make-up of its shareholder base
and other descriptive factors concerning the Fund.
Each Portfolio's yield will fluctuate. Shares of the Fund are not insured.
The performance of a Portfolio may be compared to that of other mutual funds
tracked by Lipper, Inc. ("Lipper"). Lipper performance calculations include the
reinvestment of all capital gain and income dividends for the periods
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covered by the calculations. A Portfolio's performance also may be compared to
other money market funds reported by IBC Financial Data, Inc. Money Fund
Report(R) or Money Market Insight(R) ("IBC Financial Data, Inc."), reporting
services on money market funds. As reported by IBC Financial Data, Inc., all
investment results represent total return (annualized results for the period net
of management fees and expenses) and one year investment results would be
effective annual yields assuming reinvestment of dividends. In addition,
investors may want to compare the Fund's performance to the Consumer Price
Index, either directly or by calculating its "real rate of return," which is
adjusted for the effects of inflation.
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Investors also may want to compare a Portfolio's performance to that of U.S.
Treasury bills or notes because such instruments represent alternative income
producing products. Treasury obligations are issued in selected denominations.
Rates of U.S. Treasury obligations are fixed at the time of issuance and payment
of principal and interest is backed by the full faith and credit of the U.S.
Treasury. The market value of such instruments generally will fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities. Each Portfolio's yield will
fluctuate. Also, while each Portfolio seeks to maintain a net asset value per
share of $1.00, there is no assurance that it will be able to do so.
OFFICERS AND TRUSTEES
The officers and trustees of the Fund, their birth dates, their principal
occupations and their affiliations, if any, with the Adviser and Underwriter,
are listed below. All persons named as trustees also serve in similar capacities
for other funds advised by the Adviser.
JOHN W. BALLANTINE (2/16/46), Trustee, 1500 North Lake Shore Drive, Chicago,
Illinois; First Chicago NBD Corporation/The First National Bank of Chicago:
1996-1998 Executive Vice President and Chief Risk Management Officer; 1995-1996
Executive Vice President and Head of International Banking; 1992-1995 Executive
Vice President, Chief Credit and Market Risk Officer.
LEWIS A. BURNHAM (1/8/33), Trustee, 16410 Avila Boulevard, Tampa, Florida;
Retired; formerly, Partner, Business Resources Group (management consulting
firm); formerly, Executive Vice President, Anchor Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee, 7011 Green Tree Drive, Naples, Florida;
Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee, 1530 North State Parkway, Chicago,
Illinois; Chairman, Harnischfeger Industries, Inc. (machinery for the mining and
paper industries); formerly, Vice Chairman and Chief Financial Officer, Monsanto
Company (agricultural, pharmaceutical and nutritional/food products); formerly,
Vice President, Head of International Operations FMC Corporation (manufacturer
of machinery and chemicals).
DONALD R. JONES (1/17/30), Trustee, 182 Old Wick Lane, Inverness, Illinois;
Retired; Director, Motorola, Inc. (manufacturer of electronic equipment and
components); formerly, Executive Vice President and Chief Financial Officer,
Motorola, Inc.
THOMAS W. LITTAUER (4/26/55), Trustee and Vice President*, Two International
Place, Boston, Massachusetts; Managing Director, Adviser; formerly, Head of
Broker Dealer Division of an unaffiliated investment management firm during
1997; prior thereto, President of Client Management Services of an unaffiliated
investment management firm from 1991 to 1996.
SHIRLEY D. PETERSON (9/3/41), Trustee, 401 Rosemont Avenue, Frederick, Maryland;
President, Hood College; formerly, partner, Steptoe & Johnson (attorneys); prior
thereto, Commissioner, Internal Revenue Service; prior thereto, Assistant
Attorney General (Tax), U.S. Department of Justice; Director; Bethlehem Steel
Corp.
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CORNELIA M. SMALL* (7/28/44), Trustee*, 345 Park Avenue, New York, New York;
Managing Director, Scudder Kemper Investments, Inc.
WILLIAM P. SOMMERS (7/22/33), Trustee, 24717 Harbour View Drive, Ponte Vedro
Beach, Florida; Consultant and Director, SRI International (research and
development); formerly, President and Chief Executive Officer, SRI
International; prior thereto, Executive Vice President, Iameter (medical
information and educational service provider); prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton Inc. (management consulting
firm); Director, PSI, Inc., Evergreen Solar, Inc. and Litton Industries.
MARK S. CASADY (9/21/60), President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary*, 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice President, Adviser.
ANN M. McCREARY (11/6/56), Vice President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser.
ROBERT C. PECK, JR. (10/1/46), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Adviser; formerly, Executive Vice
President and Chief Investment Officer with an unaffiliated investment
management firm from 1988 to June 1997.
KATHRYN L. QUIRK (12/3/52), Vice President*, 345 Park Avenue, New York, New
York; Managing Director, Adviser.
FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Adviser.
LINDA J. WONDRACK (9/12/64), Vice President*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
JOHN R. HEBBLE (6/27/58), Treasurer*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
BRENDA LYONS (2/21/63), Assistant Treasurer*, Two International Place, Boston,
Massachusetts Senior Vice President, Adviser.
CAROLINE PEARSON (4/1/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Senior Vice President, Adviser; formerly, Associate,
Dechert Price & Rhoads (law firm), from 1989 to 1997.
MAUREEN E. KANE (2/14/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Vice President, Adviser; formerly, Assistant Vice
President of an unaffiliated investment management firm; prior thereto,
Associate Staff Attorney of an unaffiliated investment management firm;
Associate, Peabody & Arnold (law firm).
* Interested persons as defined in the 1940 Act.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Fund. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during
16
<PAGE>
the Fund's fiscal year ended March 31, 1999, except that the information in the
last column is for calendar year 1998.
<TABLE>
<CAPTION>
Total
Compensation From
Aggregate Compensation Kemper Fund Complex
Name Of Trustee From Fund Paid To Trustees(1)
--------------- --------- -------------------
<S> <C> <C>
John W. Ballantine(2) $ 0 $ 0
Lewis A. Burnham................................ 2,800 126,100
Donald L. Dunaway(3)............................ 3,100 135,000
Robert B. Hoffman............................... 2,800 116,100
Donald R. Jones................................. 2,800 129,600
Shirley D. Peterson............................. 2,600 108,800
William P. Sommers.............................. 2,600 108,800
</TABLE>
- --------------------
(1) Includes compensation for service on the Boards of 25 Kemper funds with
43 fund portfolios. Each trustee currently serves as trustee of 26
Kemper Funds with 48 fund portfolios.
(2) John W. Ballantine became a Trustee on May 18, 1999.
(3) Pursuant to deferred compensation agreements with the Kemper Funds,
deferred amounts accrue interest monthly at a rate approximate to the yield
of Zurich Money Funds - Zurich Money Market Fund. Total deferred fees and
interest accrued for all prior fiscal years are $13,700 for Mr. Dunaway
from Investors Cash Trust.
On June 30, 1999, the trustees and officers as a group owned less than 1% of the
outstanding shares of each Portfolio. No person owned of record 5% or more of
the outstanding shares of the Treasury Portfolio and Government Securities
Portfolio except the entities indicated in the chart below.
<TABLE>
<CAPTION>
Name And Address % Owned Portfolio
- ---------------- ------- ---------
<S> <C> <C>
First of America - Michigan* 27.28 Treasury
P.O. Box 4042
Kalamazoo, MI 49003
Walker County* 8.14 Treasury
1100 University Avenue, Rm. 203
Huntsville, TX 77340
Friendswood ISD* 6.62 Treasury
General Fund
302 Laurel Drive
Friendswood, TX 77546
Angelina County. 22.39 Treasury
P.O. Box 908
Lufkin, TX 75902
17
<PAGE>
Name And Address % Owned Portfolio
- ---------------- ------- ---------
Erath County 16.48 Treasury
266th Adult Probation
Erath County Courthouse
100 Graham
Stephenville, TX 76401
Palo Pinto County 5.75% Treasury
General Fund
P.O. Box 75
Palo Pinto, TX 76484
Smith County 7.41% Treasury
General Fund
Smith County Courthouse, Rm. 114
Tyler, TX 75702
Spring Branch ISD 13.00 Government Securities
Food Service Account
P. O. Box 19432
Houston, TX 77224
Asset Preservation, Inc. FBO** 8.57 Government Securities
A. A. Timber Enterprises LLC
19794 Riverside Avenue
Anderson, CA 96007
</TABLE>
- --------------------
* Record and beneficial owner.
** Beneficial owner.
SPECIAL FEATURES
Exchange Privilege. Subject to the limitations described below, Class A Shares
(or the equivalent) of the following Kemper Mutual Funds may be exchanged for
each other at their relative net asset values: Kemper Technology Fund, Kemper
Total Return Fund, Kemper Growth Fund, Kemper Small Capitalization Equity Fund,
Kemper Income and Capital Preservation Fund, Kemper Municipal Bond Fund, Kemper
Diversified Income Fund, Kemper High Yield Series, Kemper U.S. Government
Securities Fund, Kemper International Fund, Kemper State Tax-Free Income Series,
Kemper Adjustable Rate U.S. Government Fund, Kemper Blue Chip Fund, Kemper
Global Income Fund, Kemper Target Equity Fund (series are subject to a limited
offering period), Kemper Intermediate Municipal Bond Fund, Kemper Cash Reserves
Fund, Kemper U.S. Mortgage Fund, Kemper Value Series, Inc., Kemper Value Plus
Growth Fund, Kemper Horizon Fund, Kemper Europe Fund, Kemper Asian Growth Fund,
Kemper Aggressive Growth Fund, Kemper Global/International Series, Inc., Kemper
U.S. Growth and Income Fund, Kemper Small Cap Relative Value Fund, Kemper-Dreman
Financial Services Fund, Kemper Value Fund, Kemper Classic Growth Fund, Kemper
Global Discovery Fund, Kemper High Yield Fund II, Kemper Equity Trust, Kemper
Income Trust, Kemper Funds Trust and Kemper Securities Trust ("Kemper Mutual
Funds") and certain "Money Market Funds" (Zurich Money Funds, Zurich Yieldwise
Funds, Cash Equivalent Fund, Tax-Exempt California Money Market Fund, Cash
Account Trust, Investors Municipal Cash Fund and Investors Cash Trust). Shares
of Money
18
<PAGE>
Market Funds and Kemper Cash Reserves Fund that were acquired by purchase (not
including shares acquired by dividend reinvestment) are subject to the
applicable sales charge on exchange. In addition, shares of a Kemper Fund in
excess of $1,000,000 (except Kemper Cash Reserves Fund), acquired by exchange
from another Fund may not be exchanged thereafter until they have been owned for
15 days (the "15-Day Hold Policy"). In addition to the current limits on
exchanges of shares with a value over $1,000,000, shares of a Kemper fund with a
value of $1,000,000 or less (except Kemper Cash Reserves Fund) acquired by
exchange from another Kemper fund, or from a money market fund, may not be
exchanged thereafter until they have been owned for 15 days, if, in the
investment manager's judgement, the exchange activity may have an adverse effect
on the fund. In particular, a pattern of exchanges that coincides with a "market
timing" strategy may be disruptive to the Kemper fund and therefore may be
subject to the 15-day hold policy. For purposes of determining whether the
15-Day Hold Policy applies to a particular exchange, the value of the shares to
be exchanged shall be computed by aggregating the value of shares being
exchanged for all accounts under common control, discretion or advice, including
without limitation accounts administered by a financial services firm offering
market timing, asset allocation or similar services. Series of Kemper Target
Equity Fund will be available on exchange only during the Offering Period for
such series as described in the prospectus for such series. Cash Equivalent
Fund, Tax-Exempt California Money Market Fund, Cash Account Trust, Investors
Municipal Cash Fund and Investors Cash Trust are available on exchange but only
through a financial services firm having a services agreement with the
Underwriter with respect to such Funds. Exchanges may only be made for funds
that are available for sale in the shareholder's state of residence. Currently,
Tax-Exempt California Money Market Fund is available for sale only in California
and the portfolios of Investors Municipal Cash Fund are available for sale in
certain states.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the fund into which they are being exchanged.
Exchanges are made based on relative dollar values of the shares involved in the
exchange. There is no service fee for an exchange; however, financial services
firms may charge for their services in effecting exchange transactions.
Exchanges will be effected by redemption of shares of the fund held and purchase
of shares of the other fund. For federal income tax purposes, any such exchange
constitutes a sale upon which a gain or loss may be realized, depending upon
whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis. Shareholders interested in exercising the
exchange privilege may obtain an exchange form and prospectuses of the other
funds from firms or the Underwriter. Exchanges also may be authorized by
telephone if the shareholder has given authorization. Once the authorization is
on file, the Shareholder Service Agent will honor requests by telephone at
1-800-231-8568 or in writing subject to the limitations on liability described
in the prospectus. Any share certificates must be deposited prior to any
exchange of such shares. During periods when it is difficult to contact the
Shareholder Service Agent by telephone, it may be difficult to implement the
telephone exchange privilege. The exchange privilege is not a right and may be
suspended, terminated or modified at any time. Except as otherwise permitted by
applicable regulations, 60 days' prior written notice of any termination or
material change will be provided.
SHAREHOLDER RIGHTS
The Fund is an open-end, diversified management investment company, organized as
a business trust under the laws of Massachusetts on March 2, 1990. The Fund may
issue an unlimited number of shares of beneficial interest in one or more series
or "Portfolios," all having no par value, which may be divided by the Board of
Trustees into classes of shares, subject to compliance with the Securities and
Exchange Commission regulations permitting the creation of separate classes of
shares. The Fund's shares are not currently divided into classes. While only
shares of the "Government Securities Portfolio" and "Treasury Portfolio" are
presently being offered, the Board of Trustees may authorize the issuance of
additional Portfolios if deemed desirable, each with its own investment
objective, policies and restrictions. Since the Fund offers multiple Portfolios,
it is known as a "series company." Shares of each Portfolio have
19
<PAGE>
equal noncumulative voting rights and equal rights with respect to dividends,
assets and liquidation of such Portfolio subject to any preferences, rights or
privileges of any classes of shares within the Portfolio. Generally each class
of shares issued by a particular Portfolio would differ as to the allocation of
certain expenses of the Portfolio such as distribution and administrative
expenses, permitting, among other things, different levels of services or
methods of distribution among various classes. Shares are fully paid and
nonassessable when issued, are transferable without restriction and have no
preemptive or conversion rights. The Fund is not required to hold annual
shareholders' meetings and does not intend to do so. However, it will hold
special meetings as required or deemed desirable for such purposes as electing
trustees, changing fundamental policies or approving an investment management
agreement. Subject to the Agreement and Declaration of Trust of the Fund,
shareholders may remove trustees. Shareholders will vote by Portfolio and not in
the aggregate or by class except when voting in the aggregate is required under
the 1940 Act, such as for the election of trustees, or when the Board of
Trustees determines that voting by class is appropriate.
The Fund generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Fund ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees if a meeting is called for such
purpose; (b) the adoption of any contract for which shareholder approval is
required by the 1940 Act; (c) any termination of the Fund to the extent and as
provided in the Declaration of Trust; (d) any amendment of the Declaration of
Trust (other than amendments changing the name of the Fund or any Portfolio,
establishing a Portfolio, supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent provision
thereof); and (e) such additional matters as may be required by law, the
Declaration of Trust, the By-laws of the Fund, or any registration of the Fund
with the Securities and Exchange Commission or any state, or as the trustees may
consider necessary or desirable. The shareholders also would vote upon changes
in fundamental investment objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of a
successor or until such trustee sooner dies, resigns, retires or is removed by a
majority vote of the shares entitled to vote (as described below) or a majority
of the trustees. In accordance with the 1940 Act (a) the Fund will hold a
shareholder meeting for the election of trustees at such time as less than a
majority of the trustees have been elected by shareholders, and (b) if, as a
result of a vacancy on the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled only
by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting shall
be held upon the written request of the holders of not less than 10% of the
outstanding shares. Upon the written request of ten or more shareholders, who
have been such for at least six months and who hold shares constituting at least
1% of the outstanding shares of the Fund, stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Fund has undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Fund could
take place even if less than a majority of the shareholders were represented on
its scheduled date. Shareholders would in such a case be permitted to take
action which does not require a larger vote than a majority of a quorum, such as
the election of trustees and ratification of the selection of auditors. Some
matters requiring a larger vote under the Declaration of Trust, such as
termination or reorganization of the Fund and certain amendments of the
Declaration of Trust, would not be affected by this provision; nor would matters
which under the 1940 Act require the vote of a "majority of the outstanding
voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Fund (or any Portfolio or class) by notice to the shareholders
without shareholder approval.
20
<PAGE>
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Fund
will be covered by insurance which the trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Adviser remote and
not material, since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.
21
<PAGE>
INVESTORS CASH TRUST
PART C. OTHER INFORMATION
<TABLE>
<CAPTION>
Item 23. Exhibits.
-------- ---------
<S> <C> <C> <C>
(a) (1) Amended and Restated Agreement and Declaration of Trust, dated March 9,
1990, incorporated by reference to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on Form N-1A; filed with the SEC on July
28, 1995.
(2) Written Instrument Amending Agreement and Declaration of Trust, dated August
14, 1990, incorporated by reference to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on Form N-1A; filed with the SEC on July
28, 1995.
(3) Written Instrument Amending Agreement and Declaration of Trust, dated
September 19, 1990, incorporated by reference to Post-Effective Amendment
No. 7 to the Registrant's Registration Statement on Form N-1A; filed with
the SEC on July 28, 1995.
(b) By-laws, incorporated by reference to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on Form N-1A; filed with the SEC on July
28, 1995.
(c) Text of Share Certificate, incorporated by reference to Post-Effective
Amendment No. 7 to the Registrant's Registration Statement on Form N-1A;
filed with the SEC on July 28, 1995.
(d) Investment Management Agreement, dated September 7, 1998, incorporated by
reference to Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A; filed with the SEC on May 18, 1999.
(e)
(2) Underwriting and Distribution Services Agreement between the Registrant and
Kemper Distributors, Inc., dated September 7, 1998, incorporated by
reference to Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A; filed with the SEC on May 18, 1999.
(3) Form of Selling Group Agreement, incorporated by reference to Post-Effective
Amendment No. 7 to the Registrant's Registration Statement on Form N-1A;
filed with the SEC on July 28, 1995.
(f) Inapplicable.
Part C - Page 2
<PAGE>
(g) Custody Agreement between the Registrant, on behalf of Government Securities
Portfolio and Treasury Portfolio, and State Street Bank and Trust Company,
dated April 19, 1999, incorporated by reference to Post-Effective Amendment
No. 11 to the Registrant's Registration Statement on Form N-1A; filed with
the SEC on May 18, 1999.
(h) (1) Agency Agreement, dated September 21, 1990, incorporated by reference to
Post-Effective Amendment No. 7 to the Registrant's Registration Statement on
Form N-1A; filed with the SEC on July 28, 1995.
(2) Supplement to Agency Agreement, dated April 1, 1991, incorporated by
reference to Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A; filed with the SEC on July 28, 1995.
(3) Supplement to Agency Agreement, dated October 1, 1992, incorporated by
reference to Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A; filed with the SEC on July 28, 1995.
(4) Supplement to Agency Agreement, dated April 1, 1995, incorporated by
reference to Post-Effective Amendment No. 8 to the Registrant's Registration
Statement on Form N-1A; filed with the SEC on July 26, 1996.
(5) Administration and Shareholder Services Agreement, dated October 1, 1991,
incorporated by reference to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on Form N-1A; filed with the SEC on July
28, 1995.
(6) Amendment to Administration and Shareholder Services Agreement, dated
December 1, 1993, incorporated by reference to Post-Effective Amendment No.
7 to the Registrant's Registration Statement on Form N-1A; filed with the
SEC on July 28, 1995.
(7) Assignment and Assumption Agreement, dated February 1, 1995, incorporated by
reference to Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A; filed with the SEC on July 28, 1995.
(8) Fund Accounting Services Agreements, each dated December 31, 1997, on behalf
of Government Securities Portfolio and Treasury Portfolio, respectively,
incorporated by reference to Post-Effective Amendment No. 10 to the
Registrant's Registration Statement on Form N-1A; filed with the SEC on July
28, 1998.
(i) Opinion and Consent of Counsel; filed herein.
(j) Report and Consent of Independent Auditors; filed herein.
(k) Inapplicable
(l) Inapplicable
(m) Inapplicable
Part C - Page 3
<PAGE>
(n) Financial Data Schedules; filed herein.
(o) Inapplicable
</TABLE>
Item 24. Persons Controlled by or under Common Control with Fund.
- -------- --------------------------------------------------------
None
Item 25. Indemnification.
- -------- ----------------
Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit 1 hereto, which is incorporated herein by reference) provides in effect
that the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the Agreement
and Declaration of Trust does not protect any person against any liability to
the Registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question as to whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
On June 26, 1997, Zurich Insurance Company ("Zurich"), ZKI Holding
Corp. ("ZKIH"), Zurich Kemper Investments, Inc. ("ZKI"), Scudder, Stevens &
Clark, Inc. ("Scudder") and the representatives of the beneficial owners of the
capital stock of Scudder ("Scudder Representatives") entered into a transaction
agreement ("Transaction Agreement") pursuant to which Zurich became the majority
stockholder in Scudder with an approximately 70% interest, and ZKI was combined
with Scudder ("Transaction"). In connection with the trustees' evaluation of the
Transaction, Zurich agreed to indemnify the Registrant and the trustees who were
not interested persons of ZKI or Scudder (the "Independent Trustees") for and
against any liability and expenses based upon any action or omission by the
Independent Trustees in connection with their consideration of and action with
respect to the Transaction. In addition, Scudder has agreed to indemnify the
Registrant and the Independent Trustees for and against any liability and
expenses based upon any misstatements or omissions by Scudder to the Independent
Trustees in connection with their consideration of the Transaction.
Item 26. Business and Other Connections of Investment Adviser.
- -------- -----------------------------------------------------
Scudder Kemper Investments, Inc. has stockholders and
employees who are denominated officers but do not as such have
corporation-wide responsibilities. Such persons are not
considered officers for the purpose of this Item 26.
<TABLE>
<CAPTION>
Business and Other Connections of Board
Name of Directors of Registrant's Adviser
---- ------------------------------------
<S> <C>
Stephen R. Beckwith Treasurer and Chief Financial Officer, Scudder Kemper Investments, Inc.**
Vice President and Treasurer, Scudder Fund Accounting Corporation*
Director, Scudder Stevens & Clark Corporation**
Director and Chairman, Scudder Defined Contribution Services, Inc.**
Part C - Page 4
<PAGE>
Director and President, Scudder Capital Asset Corporation**
Director and President, Scudder Capital Stock Corporation**
Director and President, Scudder Capital Planning Corporation**
Director and President, SS&C Investment Corporation**
Director and President, SIS Investment Corporation**
Director and President, SRV Investment Corporation**
Lynn S. Birdsong Director and Vice President, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark (Luxembourg) S.A.#
William H. Bolinder Director, Scudder Kemper Investments, Inc.**
Member, Group Executive Board, Zurich Financial Services, Inc.##
Chairman, Zurich-American Insurance Company o
Laurence W. Cheng Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, ZKI Holding Corporation xx
Gunther Gose Director, Scudder Kemper Investments, Inc.**
CFO and Member, Group Executive Board, Zurich Financial Services, Inc.##
CEO/Branch Offices, Zurich Life Insurance Company##
Rolf Huppi Director, Chairman of the Board, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, Chairman of the Board, Zurich Holding Company of America o
Director, ZKI Holding Corporation xx
Kathryn L. Quirk Chief Legal Officer, Chief Compliance Officer and Secretary, Scudder Kemper
Investments, Inc.**
Director, Senior Vice President & Assistant Clerk, Scudder Investor Services, Inc.*
Director, Vice President & Secretary, Scudder Fund Accounting Corporation*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation*
Director & Assistant Clerk, Scudder Service Corporation*
Director, SFA, Inc.*
Vice President, Director & Assistant Secretary, Scudder Precious Metals, Inc.***
Director, Scudder, Stevens & Clark Japan, Inc.***
Director, Vice President and Secretary, Scudder, Stevens & Clark of Canada, Ltd.***
Director, Vice President and Secretary, Scudder Canada Investor Services Limited***
Director, Vice President and Secretary, Scudder Realty Advisers, Inc. x
Director and Secretary, Scudder, Stevens & Clark Corporation**
Director and Secretary, Scudder, Stevens & Clark Overseas Corporation oo
Director and Secretary, SFA, Inc.*
Director, Vice President and Secretary, Scudder Defined Contribution Services, Inc.**
Director, Vice President and Secretary, Scudder Capital Asset Corporation**
Director, Vice President and Secretary, Scudder Capital Stock Corporation**
Director, Vice President and Secretary, Scudder Capital Planning Corporation**
Director, Vice President and Secretary, SS&C Investment Corporation**
Director, Vice President and Secretary, SIS Investment Corporation**
Director, Vice President and Secretary, SRV Investment Corporation**
Director, Vice President and Secretary, Scudder Brokerage Services, Inc.*
Director, Korea Bond Fund Management Co., Ltd.+
Cornelia M. Small Director and Vice President, Scudder Kemper Investments, Inc.**
Part C - Page 5
<PAGE>
Edmond D. Villani Director, President and Chief Executive Officer, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark Japan, Inc.###
President and Director, Scudder, Stevens & Clark Overseas Corporation oo
President and Director, Scudder, Stevens & Clark Corporation**
Director, Scudder Realty Advisors, Inc.x
Director, IBJ Global Investment Management S.A. Luxembourg, Grand-Duchy of Luxembourg
* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C. Luxembourg B 34.564
*** Toronto, Ontario, Canada
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
xx 222 S. Riverside, Chicago, IL
o Zurich Towers, 1400 American Ln., Schaumburg, IL
+ P.O. Box 309, Upland House, S. Church St., Grand Cayman, British West Indies
## Mythenquai-2, P.O. Box CH-8022, Zurich, Switzerland
</TABLE>
Item 27. Principal Underwriters.
- -------- -----------------------
(a)
Kemper Distributors, Inc. acts as principal underwriter of the
Registrant's shares and acts as principal underwriter of the Kemper
Funds.
(b)
Information on the officers and directors of Kemper Distributors, Inc.,
principal underwriter for the Registrant is set forth below. The
principal business address is 222 South Riverside Plaza, Chicago,
Illinois 60606.
<TABLE>
<CAPTION>
(1) (2) (3)
Positions and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
<S> <C> <C> <C>
James L. Greenawalt President None
Thomas W. Littauer Director, Chief Executive Officer Trustee and Vice President
Kathryn L. Quirk Director, Secretary, Chief Legal Vice President
Officer and Vice President
James J. McGovern Chief Financial Officer and Vice None
President
Linda J. Wondrack Vice President and Chief Compliance Vice President
Officer
Paula Gaccione Vice President None
Part C - Page 6
<PAGE>
Positions and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
Michael E. Harrington Vice President None
Robert A. Rudell Vice President None
William M. Thomas Vice President None
Todd N. Gierke Assistant Treasurer None
Philip J. Collora Assistant Secretary Vice President and Secretary
Paul J. Elmlinger Assistant Secretary None
Diane E. Ratekin Assistant Secretary None
Daniel Pierce Director, Chairman Trustee
Mark S. Casady Director, Vice Chairman President
Stephen R. Beckwith Director None
</TABLE>
(c) Not applicable
Item 28. Location of Accounts and Records.
- -------- ---------------------------------
Accounts, books and other documents are maintained at the offices of
the Registrant, the offices of Registrant's investment adviser, Scudder Kemper
Investments, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, at the
offices of the Registrant's principal underwriter, Kemper Distributors, Inc.,
222 South Riverside Plaza, Chicago, Illinois 60606 or, in the case of records
concerning custodial functions, at the offices of the custodian, State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110 or, in
the case of records concerning transfer agency functions, at the offices of
State Street Bank and Trust Company and of the shareholder service agent, Kemper
Service Company, 811 Main Street, Kansas City, Missouri 64105.
Item 29. Management Services.
- -------- --------------------
Inapplicable.
Item 30. Undertakings.
- -------- -------------
Inapplicable.
Part C - Page 7
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago and State of Illinois, on the
26th day of July, 1999.
INVESTORS CASH TRUST
By /s/Mark S. Casady
-----------------------
Mark S. Casady
President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to its Registration Statement has been signed below on July 26, 1999,
on behalf of the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Lewis A. Burnham July 26, 1999
- --------------------------------------
Lewis A. Burnham* Trustee
/s/ Donald L. Dunaway July 26, 1999
- --------------------------------------
Donald L. Dunaway* Trustee
/s/ Robert B. Hoffman July 26, 1999
- --------------------------------------
Robert B. Hoffman* Trustee
/s/ Donald R. Jones July 26, 1999
- --------------------------------------
Donald R. Jones* Trustee
/s/Thomas W. Littauer July 26, 1999
- --------------------------------------
Thomas W. Littauer Trustee
/s/ Shirley D. Peterson July 26, 1999
- --------------------------------------
Shirley D. Peterson* Trustee
/s/ William P. Sommers July 26, 1999
- --------------------------------------
William P. Sommers* Trustee
<PAGE>
/s/John R. Hebble July 26, 1999
- --------------------------------------
John R. Hebble Treasurer (Principal Financial and
Accounting Officer)
</TABLE>
*By: /s/Philip J. Collora
-----------------------------------
Philip J. Collora**
** Philip J. Collora signs this document
pursuant to powers of attorney
contained in Post-Effective Amendment
No. 10 to the Registration Statement,
filed on July 28, 1998.
2
<PAGE>
File No. 33-34645
File No. 811-6103
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM N-1A
POST-EFFECTIVE AMENDMENT NO. 12
TO REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
AMENDMENT NO. 14
TO REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
INVESTORS CASH TRUST
<PAGE>
INVESTORS CASH TRUST
EXHIBIT INDEX
Exhibit 23 (i)
Exhibit 23 (j)
Exhibit 23 (n)
Exhibit 23(i)
VEDDER PRICE
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601-1003
312-609-7500
FACSIMILE: 312-609-5005
A PARTNERSHIP INCLUDING VEDDER, PRICE,
KAUFMAN & KAMMHOLZ, P.C.
WITH OFFICES IN CHICAGO AND NEW YORK CITY
July 20, 1999
Investors Cash Trust
222 South Riverside Plaza
Chicago, Illinois 60606
Ladies and Gentlemen:
Reference is made to Post-Effective Amendment No. 12 to the Registration
Statement on Form N-1A under the Securities Act of 1933 being filed by Investors
Cash Trust (the "Fund") in connection with the public offering from time to time
of units of beneficial interest, no par value ("Shares"), in Government
Securities Portfolio and Treasury Portfolio (each, a "Portfolio" and
collectively, the "Portfolios").
We have acted as counsel to the Fund, and in such capacity are familiar
with the Fund's organization and have counseled the Fund regarding various legal
matters. We have examined such Fund records and other documents and certificates
as we have considered necessary or appropriate for the purposes of this opinion.
In our examination of such materials, we have assumed the genuineness of all
signatures and the conformity to original documents of all copies submitted to
us.
Based upon the foregoing and assuming that the Fund's Amended and Restated
Agreement and Declaration of Trust dated March 9, 1990, as amended by the
Written Instrument Amending the Agreement and Declaration of Trust dated August
14, 1990 and the Written Instrument Amending the Agreement and Declaration of
Trust dated September 19, 1991, and the By-Laws of the Fund adopted March 17,
1990, are presently in full force and effect and have not been amended in any
respect except as provided in the above-referenced documents and that the
resolutions adopted by the Board of Trustees of the Fund on March 2, 1990, March
17, 1990 and July 30, 1991 relating to organizational matters, securities
matters and the issuance of shares are presently in full force and effect and
have not been amended in any respect, we advise you and opine that (a) the Fund
is a validly existing voluntary association with transferrable shares under the
laws of the Commonwealth of Massachusetts and is authorized to issue an
unlimited number of Shares in the Portfolios; and (b) presently and upon such
further issuance of the Shares in accordance with the Fund's Agreement and
Declaration of Trust and the receipt by the Fund of a purchase price not less
than the net asset value per Share, the Shares are and will be legally issued
and outstanding, fully paid and nonassessable.
The Fund is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally
<PAGE>
VEDDER PRICE
liable for the obligations of the Fund or any Portfolio. However, the Agreement
and Declaration of Trust disclaims shareholder liability for acts and
obligations of the Fund or of a particular Portfolio and requires that notice of
such disclaimer be given in each note, bond, contract, instrument, certificate
share or undertaking made or issued by the Trustees or officers of the Fund. The
Agreement and Declaration of Trust provides for indemnification out of the
property of a particular Portfolio for all loss and expense of any shareholder
of that Portfolio held personally liable for the obligations of such Portfolio.
Thus, the risk of liability is limited to circumstances in which the relevant
Portfolio would be unable to meet its obligations.
This opinion is solely for the benefit of the Fund, the Fund's Board of
Trustees and the Fund's officers and may not be relied upon by any other person
without our prior written consent. We hereby consent to the use of this opinion
in connection with said Post-Effective Amendment.
Very truly yours,
/s/ VEDDER, PRICE, KAUFMAN &
KAMMHOLZ
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
DAS/COK
Exhibit 23(j)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors and Reports to Shareholders" and to the
use of our report dated May 18, 1998 in the Registration Statement of Investors
Cash Trust on Form N-1A and its incorporation by reference in the related
Prospectus filed with the Securities and Exchange Commission in this
Post-Effective Amendment No. 12 to the Registration Statement under the
Securities Act of 1933 (File 33-34645) and in this Amendment No. 14 to the
Registration Statement under the Investment Company Act of 1940 (File No.
811-6103).
ERNST & YOUNG LLP
Chicago, Illinois
July 26, 1999
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1999
ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000863209
<NAME> INVESTORS CASH TRUST
<SERIES>
<NUMBER> 01
<NAME> GOVERNMENT SECURITIES PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 507,674
<INVESTMENTS-AT-VALUE> 507,674
<RECEIVABLES> 1,217
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 508,891
<PAYABLE-FOR-SECURITIES> 14,493
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,271
<TOTAL-LIABILITIES> 18,764
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 490,127
<SHARES-COMMON-STOCK> 490,127
<SHARES-COMMON-PRIOR> 312,194
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 490,127
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18,915
<OTHER-INCOME> 0
<EXPENSES-NET> (887)
<NET-INVESTMENT-INCOME> 18,028
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 18,028
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18,028)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,521,330
<NUMBER-OF-SHARES-REDEEMED> (1,358,146)
<SHARES-REINVESTED> 14,749
<NET-CHANGE-IN-ASSETS> 177,933
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 535
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,195
<AVERAGE-NET-ASSETS> 356,838
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .33
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1999
ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000863209
<NAME> INVESTORS CASH TRUST
<SERIES>
<NUMBER> 02
<NAME> TREASURY PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 57,640
<INVESTMENTS-AT-VALUE> 57,640
<RECEIVABLES> 398
<ASSETS-OTHER> 621
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 58,659
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 257
<TOTAL-LIABILITIES> 257
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 58,402
<SHARES-COMMON-STOCK> 58,402
<SHARES-COMMON-PRIOR> 74,290
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 58,402
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,058
<OTHER-INCOME> 0
<EXPENSES-NET> (149)
<NET-INVESTMENT-INCOME> 2,909
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,909
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,909)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 88,458
<NUMBER-OF-SHARES-REDEEMED> (107,311)
<SHARES-REINVESTED> 2,965
<NET-CHANGE-IN-ASSETS> (15,888)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 89
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 220
<AVERAGE-NET-ASSETS> 59,085
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .37
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>