SCUDDER
INVESTMENTS (SM)
[LOGO]
Government Securities Portfolio
Scudder Government
Cash Institutional Shares
Fund #144
Government Cash
Managed Shares
Fund #244
Semiannual Report
September 30, 2000
The portfolio seeks to provide maximum current income consistent with stability
of capital.
<PAGE>
Dear Shareholder:
We appreciate your decision to invest in Scudder Institutional Funds. To provide
you with an update of holdings, on the following pages you'll find the
Government Securities Portfolio's semiannual report for the six months ended
September 30, 2000. Also included are financial highlights for the following
share classes:
o Institutional Shares
o Managed Shares
Briefly, for the six months ending September 30, 2000 the Portfolio registered
performance and achieved its stated objective of providing maximum current
income exempt from Federal income tax, while maintaining stability of principal.
Economic Review and Outlook
During the past three months expectations of both a growth slowdown and an end
to the path of tightening monetary conditions became more entrenched. Economic
data, with few exceptions, supported these perceptions of a soft landing, and
the forward yield curve suggested a possible ease in the first quarter of 2001.
Nevertheless, the wild card of inflation remained difficult to dismiss. Core CPI
as measured on a year over year basis is in an uptrend, and energy and some
agricultural prices have risen. In this context, short-term instruments traded
rich to 6.5% Federal Funds target. Moreover, the yield curve continued to
flatten and actually inverted with the extension from one- to twelve-month U.S.
Treasury Bills declining from 20 to negative 12 basis points.
We favored lengthening given attractive market opportunities, but the shape of
the yield curve was the limiting factor as U.S. Treasury Bills generally traded
rich to Federal Funds on a historical spread basis. We retained our primary
emphasis in repurchase agreements. The reason is their yield is principally
determined by the trading level of Federal Funds.
It appears the unfolding economic scenario will be marked by both softer growth
and developing inflationary pressures. We believe any slowdown should be modest.
Consumers are highly confident, as gauged by firm housing data and strengthening
personal consumption expenditures, and remain encouraged by tight labor markets.
On the other hand, the Fed is very sensitive to inflation, particularly any
incipient wage pressure, because any growth slowdown may damage labor
productivity, a critical driver of this successful economic run. Under these
conditions, we believe the Fed is on hold for the balance of the year.
Portfolio Performance
As of September 30, 2000
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7-Day
Current
Yield
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Government Cash Institutional Shares 6.59%
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Government Cash Managed Shares 6.33%
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Thank you for your investment. We look forward to serving your investment needs
for years to come.
/s/Frank Rachwalski
Frank Rachwalski
Vice President and Lead Portfolio Manager
October 1, 2000
Frank Rachwalski is a Managing Director of Scudder Kemper Investments, Inc. and
is Vice President and Lead Portfolio Manager of all Scudder Kemper Money Funds.
Mr. Rachwalski holds B.B.A. and M.B.A. degrees from Loyola University.
Notes
Yields are historical, may fluctuate, and do not guarantee future performance.
Net yields are the sum of the daily dividend rates for the period.
Like all money market funds, an investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve your investment at $1.00 per share,
it is possible to lose money.
The views expressed in this report reflect those of the portfolio manager only
through the end of the period stated above. The manager's views are subject to
change at any time, based on market and other conditions.
1
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Portfolio of Investments at September 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Government Securities Portfolio
Repurchase Agreements** -- 41.7%
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Bear, Stearns Cos., Inc $ 30,000,000 $ 30,000,000
6.57%, 10/2/2000, to be repurchased at $30,010,950
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Chase Securities, Inc. 47,000,000 47,000,000
6.55%, 10/3/2000, to be repurchased at $47,025,654
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Goldman Sachs Cos., Inc. 10,000,000 10,000,000
6.52%, 11/20/2000, to be repurchased at $10,095,367
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Lehman Brothers, Inc. 17,000,000 17,000,000
6.62%, 10/2/2000, to be repurchased at $17,006,252
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Merrill Lynch, Inc. 10,000,000 10,000,000
6.58%, 10/2/2000, to be repurchased at $10,003,600
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Morgan Stanley, Dean Witter & Co. 18,000,000 18,000,000
6.50%, 10/4/2000, to be repurchased at $18,013,000
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Total Repurchase Agreements (Cost $132,000,000) 132,000,000
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Short-Term Notes -- 58.3%
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Federal Farm Credit Bank, 6.50%, 10/1/2000* 15,000,000 15,000,000
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Federal Farm Credit Bank, 6.66%, 10/3/2000* 15,000,000 14,997,963
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Federal Home Loan Bank, 6.48%, 10/4/2000* 15,000,000 15,000,000
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Federal Home Loan Bank, 6.42%, 10/15/2000* 5,000,000 4,997,009
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Federal Home Loan Bank, 6.50%, 10/1/2000* 5,000,000 4,999,616
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Federal Home Loan Bank, 6.57%, 10/27/2000* 8,000,000 8,000,000
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Federal Home Loan Bank, 6.57%, 2/9/2001 4,500,000 4,500,405
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Federal Home Loan Bank, 6.69%, 5/2/2001 4,000,000 3,965,484
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Federal Home Loan Bank, 6.90%, 8/28/2001 6,000,000 6,000,000
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Federal Home Loan Bank, 6.95%, 5/8/2001 3,000,000 2,995,464
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Federal Home Loan Mortgage Corp., 6.53%, 10/10/2000* 10,000,000 9,997,378
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Federal Home Loan Mortgage Corp., 6.90%, 2/8/2001 5,000,000 4,983,900
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Federal National Mortgage Association, 6.53%, 10/1/2000* 10,000,000 10,000,000
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Federal National Mortgage Association, 6.88%, 10/3/2000* 10,000,000 10,000,036
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Federal National Mortgage Corp., 6.49%, 10/1/2000* 5,000,000 4,997,172
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Federal National Mortgage Corp., 6.55%, 3/20/2001 4,000,000 3,999,944
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Principal
Amount Value
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Federal National Mortgage Corp., 6.58%, 2/22/2001 $ 4,500,000 $ 4,495,635
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Federal National Mortgage Corp., 7.26%, 5/24/2001 8,000,000 8,000,000
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Overseas Private Investment Corp., 6.55%, 10/2/2000* 13,000,000 12,999,247
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Overseas Private Investment Corp., 6.55%, 10/2/2000* 5,000,000 5,000,842
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Student Loan Marketing Association, 6.68%, 10/6/2000* 10,000,000 9,995,868
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Student Loan Marketing Association, 6.72%, 10/5/2000* 10,000,000 9,998,714
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Student Loan Marketing Association, 6.88%, 10/3/2000* 10,000,000 10,000,171
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Total Short-Term Notes (Cost $184,924,848) 184,924,848
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Total Investment Portfolio -- 100.0% (Cost $316,924,848) (a) $ 316,924,848
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</TABLE>
Interest rates represent annualized yield to date of maturity, except for
floating rate securities described below.
(a) Cost for federal income tax purposes was $316,924,848.
* Floating rate notes are securities whose yields vary with a designated
market index or market rate, such as the coupon-equivalent of the Treasury
bill rate. These securities are shown at their current rate as of September
30, 2000. The dates shown represent the demand date or next interest rate
change date.
** Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Financial Statements
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of September 30, 2000 (Unaudited)
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Assets
---------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at amortized cost:
Short-term notes $ 184,924,848
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Repurchase agreements 132,000,000
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Interest receivable 2,959,595
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Receivable for Fund shares sold 4,952,805
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Due from Adviser 215,284
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Other assets 14,687
---------------
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Total assets 325,067,219
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Liabilities
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Due to custodian bank 2,142,063
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Dividends payable 1,713,635
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Payable for Fund shares redeemed 7,327,208
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Accrued management fee 56,001
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Other accrued expenses and payables 417,808
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Total liabilities 11,656,715
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Net assets, at value $ 313,410,504
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Net Asset Value
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Service Shares
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Net assets applicable to shares outstanding $ 184,715,357
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Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized 184,715,357
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Net Asset Value, offering and redemption price per share (net assets/shares outstanding) $ 1.00
---------------------------------------------------------------------------------------------------------------------
Institutional Shares
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Net assets applicable to shares outstanding $ 89,594,118
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Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized 89,594,118
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Net Asset Value, offering and redemption price per share (net assets/shares outstanding) $ 1.00
---------------------------------------------------------------------------------------------------------------------
Managed Shares
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Net assets applicable to shares outstanding $ 39,101,029
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Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized 39,101,029
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Net Asset Value, offering and redemption price per share (net assets/shares outstanding) $ 1.00
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</TABLE>
The accompanying notes are an integral part of the financial statements.
4
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<TABLE>
<CAPTION>
Statement of Operations
Government
Securities
Six Months Ended September 30, 2000 (Unaudited) Portfolio
---------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Income
---------------------------------------------------------------------------------------------------------------------
Income:
---------------------------------------------------------------------------------------------------------------------
Interest $ 11,869,384
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Total Income 11,869,384
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Expenses:
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Management fee 276,024
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Services to shareholders 49,019
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Custodian fees 5,587
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Distribution services fees --
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Administrative services fees 140,442
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Auditing 15,006
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Legal 3,121
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Trustees' fees and expenses 8,100
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Reports to shareholders 6,064
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Registration fees 40,187
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Other 18,258
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Total expenses, before expense reductions 561,808
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Expense reductions (77,440)
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Total expenses, after expense reductions 484,368
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Net investment income 11,385,016
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Realized and unrealized gain (loss) on investment transactions
---------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investments 2,480
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Net gain (loss) on investment transactions 2,480
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Net increase (decrease) in net assets resulting from operations $ 11,387,496
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</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months
Ended
September 30, Year Ended
2000 March 31,
Statements of Changes in Net Assets (Unaudited) 2000
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
---------------------------------------------------------------------------------------------------------------------
Operations:
---------------------------------------------------------------------------------------------------------------------
Net investment income $ 11,385,016 $ 18,778,843
---------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 2,480 --
------------------------------
---------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 11,387,496 18,778,843
------------------------------
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Distributions to shareholders from:
---------------------------------------------------------------------------------------------------------------------
Net investment income (Service Shares) (6,957,470) (17,276,445)
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Net investment income (Institutional Shares) (3,297,778) (1,125,511)
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Net investment income (Managed Shares) (1,132,248) (376,887)
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Fund share transactions at net asset value of $1.00 per share:
Service Shares:
---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 186,609,584 1,052,619,885
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Reinvestment of distributions 5,602,561 13,956,065
---------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (271,789,188) (1,292,410,523)
------------------------------
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Net increase (decrease) in net assets from Fund share transactions (79,577,043) (225,834,573)
---------------------------------------------------------------------------------------------------------------------
Institutional Shares (a):
---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 96,577,158 125,102,009
---------------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 216,237 61,095
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Cost of shares redeemed (113,349,067) (19,013,314)
------------------------------
---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (16,555,672) 106,149,790
---------------------------------------------------------------------------------------------------------------------
Managed Shares (a):
---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 56,909,358 60,507,562
---------------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 24,348 12,963
---------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (58,994,089) (19,359,113)
------------------------------
---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (2,060,383) 41,161,412
------------------------------
---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (98,193,098) (78,523,371)
---------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period 411,603,602 490,126,973
---------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 313,410,504 $ 411,603,602
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Institutional Shares and Managed Shares commenced operations on November
17, 1999.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Financial Highlights
The following tables include selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements and market price data.
<TABLE>
<CAPTION>
Government Securities Portfolio -- Institutional Shares
2000(a) 2000(b)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
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Net investment income .03 .02
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Less distributions from net investment income (.03) (.02)
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Net asset value, end of period $ 1.00 $ 1.00
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Total Return (%) 3.17** 2.07**
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Ratios to Average Net Assets and Supplemental Data
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 89,594 106,150
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Ratio of expenses before expense reductions (%) .21* .22*
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Ratio of expenses after expense reductions (%) .21* .22*
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 6.26* 5.75*
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Government Securities Portfolio -- Managed Shares
2000(a) 2000(b)
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Net asset value, beginning of period $ 1.00 $ 1.00
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Net investment income .03 .02
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Less distributions from net investment income (.03) (.02)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00
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Total Return (%) 3.03** 1.96**
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Ratios to Average Net Assets and Supplemental Data
---------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 39,101 41,161
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) .46* .51*
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) .46* .51*
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 5.99* 5.44*
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</TABLE>
* Annualized
** Not annualized
(a) For the six months ended September 30, 2000 (Unaudited).
(b) For the period November 17, 1999 (commencement of operations) to March 31,
2000.
7
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Investors Cash Trust (the "Fund") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company organized as a Massachusetts business trust. The Fund
currently offers two series of shares (portfolios) -- the Government Securities
Portfolio and the Treasury Portfolio. The Government Securities Portfolio offers
multiple classes of shares that include Service Shares, Institutional Shares and
Managed Shares. Effective April 28, 2000, the Treasury Portfolio began offering
the Premier Money Market Shares. Certain detailed financial information for the
Service Shares of the Government Securities Portfolio and Service Shares and
Premier Money Market Shares of the Treasury Portfolio is provided separately and
is available upon request.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses and expense reductions, if any, are borne pro rata on the
basis of relative net assets by the holders of all classes of shares except that
each class bears certain expenses unique to that class such as distribution
services, shareholder services, administrative services and certain other class
specific expenses. Differences in class expenses may result in payment of
different per share dividends by class. All shares of the Fund have equal rights
with respect to voting subject to class specific arrangements.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use of
management estimates. The policies described below are followed consistently by
the Fund in the preparation of its financial statements.
Security Valuation. The Fund values all portfolio securities utilizing the
amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act
and pursuant to which the Fund must adhere to certain conditions. Under this
method, which does not take into account unrealized gains or losses on
securities, an instrument is initially valued at its cost and thereafter assumes
a constant accretion/amortization to maturity of any discount/premium.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies, and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a daily dividend and is distributed to shareholders monthly. Net
investment income includes all realized gains (losses) on portfolio securities.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Realized gains and losses from investment transactions are recorded on an
identified cost basis. All discounts and premiums are accreted/amortized for
both tax and financial reporting purposes.
Expenses. Expenses arising in connection with a specific portfolio are allocated
to that portfolio. Other Fund expenses are allocated between the portfolios in
proportion to their relative net assets.
8
<PAGE>
2. Transactions with Affiliates
Management Agreement. The Fund has a management agreement with Scudder Kemper
Investments, Inc. ("Scudder Kemper") and pays a monthly investment management
fee of 1/12 of the annual rate of 0.15% of average daily net assets. For the six
months ended September 30, 2000, the Fund incurred the following management
fees:
<TABLE>
<CAPTION>
Management
Management fee waived
fee by Scudder Effective
Portfolio imposed ($) Kemper ($) rate (%)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Government Securities Portfolio 276,024 -- 0.15
---------------------------------------------------------------------------------------------------------------------
</TABLE>
Administrative Services Agreement. The Fund has an administrative services
agreement with Kemper Distributors, Inc. ("KDI"). KDI provides information and
administrative services to the Service Shares and Managed Shares of the
Government Securities Portfolio at an annual fee of up to 0.25% of average daily
net assets. For the six months ended September 30, 2000, the Fund incurred fees
as follows:
<TABLE>
<CAPTION>
ASF fee ASF fee Unpaid at
imposed waived by September
Portfolio ($) KDI ($) 30, 2000 ($)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Government Securities Portfolio:
Service Shares 37,120 75,235 125,293
---------------------------------------------------------------------------------------------------------------------
Managed Shares 28,087 -- 5,793
---------------------------------------------------------------------------------------------------------------------
</TABLE>
KDI has related service agreements with various firms to provide cash management
and other services for Fund shareholders. KDI pays these firms at an annual rate
of up to 0.15% of average daily net assets.
Shareholder Services Agreement. Pursuant to a services agreement with the Fund's
transfer agent, Kemper Service Company ("KSvC") is the shareholder service agent
of the Fund. For the six months ended September 30, 2000, KSvC received
shareholder services fees for the Government Securities Portfolio of $28,055, of
which $16,187 was unpaid at September 30, 2000.
Officers and Trustees. Certain officers or trustees of the Fund are also
officers or directors of Scudder Kemper. For the six months ended September 30,
2000, the Fund made no payments to its officers and incurred trustees' fees of
$8,983 to independent trustees.
3. Expense Off-Set Arrangements
The Fund has entered into an arrangement with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of the Fund's expenses. During the six months ended September
30, 2000, the Government Securities Portfolio's custodian and transfer agent
fees were reduced by $646 and $1,558, respectively.
4. Line of Credit
The Fund and several Kemper funds (the "Participants") share in a $750 million
revolving credit facility with Chase Manhattan Bank for temporary or emergency
purposes, including the meeting of redemption requests that otherwise might
require the untimely disposition of securities. The Participants are charged an
annual commitment fee which is allocated, pro rata based upon net assets, among
each of the Participants. Interest is calculated based on the market rates at
the time of the borrowing. The Fund may borrow up to a maximum of 33 percent of
its net assets under the agreement.
9
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Principal Underwriter
Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
Scudder Institutional Funds,
Client Services
Telephone: 800 537 3177
E-mail: [email protected]
http://institutionalfunds.scudder.com
This report is not to be
distributed unless preceded
or accompanied by a
Government Securities
Portfolio prospectus.
