Scudder
Cash Investment Trust
Annual Report
June 30, 1997
Pure No-Load(TM) Funds
A money market fund for investors seeking stability and liquidity of capital and
current income.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER [LOGO]
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
4 Portfolio Management Discussion
7 Investment Portfolio
11 Financial Statements
14 Financial Highlights
15 Notes to Financial Statements
17 Report of Independent Accountants
20 Officers and Trustees
21 Investment Products and Services
22 Scudder Solutions
In Brief
o Your Fund's investments in ultra short-term, high-quality securities
contributed to a total return of 4.73% for the fiscal year ended June 30, 1997.
The Fund's 30-day net annualized yield at the end of June was 4.73%.
o The Fund has recently adopted more flexible guidelines, and can now average
out to 90 days in maturity to take advantage of the slightly higher yields on
longer-maturity investments in the money-market universe.
o As rates edged higher on evidence of stronger economic growth late last year,
we began to extend the Fund's average maturity. At the end of June, the Fund's
average maturity stood at 73 days.
Page 2 -- Scudder Cash Investment Trust
<PAGE>
Letter From the Fund's President
Dear Shareholders,
Throughout Scudder Cash Investment Trust's 1997 fiscal year, inflation
remained dormant, yet investors responded to strong economic growth as if higher
prices were just around the corner. At the end of March, the Federal Reserve
Board engineered a small increase in short-term interest rates, taking aim at
inflation before many economists were aware it was a serious threat. The
anticipation of this event in the financial markets affected all types of
fixed-income investments. However, those most sensitive to changes in the level
of interest rates -- longer-maturity bonds -- were the hardest hit.
In contrast, your Fund's focus on the shortest-maturity and highest-quality
money market securities permitted the Fund's share price to remain impervious to
market volatility in keeping with its objective of maintaining a stable $1.00
share price. As the Fund's portfolio managers explain in the following letter,
steps were also taken during the period to improve the Fund's yield.
We would like to take this opportunity to introduce a newcomer to Scudder's
mutual fund lineup: Scudder International Growth and Income Fund. The Fund
employs a yield-oriented approach to international investing and seeks to
provide long-term growth of capital plus current income. Investors who desire
international exposure but who wish to take a relatively conservative approach
may appreciate the Fund's emphasis on the dividend paying stocks of
well-established companies outside the United States. For a complete listing of
Scudder's mutual fund offerings, see page 21.
Despite near-term uncertainty, we believe the global economic landscape
provides an excellent long-term backdrop for fixed-income investors. In the
report that follows, your Fund's managers discuss the events of the past 12
months as well as their outlook for fiscal year 1998. Thank you for choosing
Scudder Cash Investment Trust to help meet your investment needs. Please do not
hesitate to call Investor Relations at 1-800-225-2470 with any questions, or
visit our Web site at http://funds.scudder.com.
Sincerely,
/s/ David S. Lee
David S. Lee
President,
Scudder Cash Investment Trust
Page 3 -- Scudder Cash Investment Trust
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Over the course of your Fund's 1997 fiscal year, investors continued to grapple
with an interesting paradox: growth without inflation. As the economy began its
sixth year of uninterrupted growth, economists and other market pundits strained
to see rising prices behind each new release of positive economic data. But
inflation was nowhere in sight. The economy heated up in earnest in late 1996
and went on to deliver 5.9% GDP growth in the first quarter of 1997.
Unemployment dropped to its lowest level since 1973, and investors widely
anticipated March's increase in the federal funds rate. After much interim
volatility, fixed-income investments rallied in the remaining weeks through June
30, as data began to suggest that growth in the second quarter would be slower.
Your Fund's investments in ultra short-term, high-quality securities helped it
successfully navigate the changing tides of investor sentiment that proved
detrimental to longer-maturity bonds during the period. Scudder Cash Investment
Trust maintained its $1.00 share price throughout the period and, as interest
rates edged higher, was able to provide a high level of income, contributing to
a total return of 4.73% for the fiscal year. The Fund's 30-day net annualized
yield at the end of June was 4.73%.
Fund Loosens Investment
Restrictions, Seeks
Higher Yield
During the fiscal year, Scudder elected to discontinue having the Fund rated by
independent agencies such as Standard & Poor's. In the past, the Fund sought and
achieved the highest rating (AAA) in part by restricting the average maturity of
the portfolio and by investing only in the highest-rated securities.
By eliminating these stringent agency guidelines, the Fund has greater
flexibility to pursue a higher level of income. However, we intend to take a
conservative approach when adding credit risk to the Fund, in accordance with
the strict credit limitations mandate we have established with our credit
research group.
In order to achieve a AAA rating by Standard & Poor's, the Fund had to limit the
average maturity of its holdings to 60 days. The Fund can now extend to an
average maturity of 90 days and take advantage of the slightly higher yields on
longer-maturity investments in the money-market universe. Previously, the Fund
was also unable to own A2/P2 commercial paper if it wished to achieve its AAA
rating. A2/P2 commercial paper is generally issued by companies that pose a
slightly greater credit risk than those of the highest quality. Utilizing
Scudder's extensive corporate bond research talents, we believe we are able to
identify A2/P2 issuers that offer higher yielding paper with what we believe is
minimal added risk. That said, portfolio concentration in A2/P2 paper during the
year was below 5% at any given time.
Page 4 -- Scudder Cash Investment Trust
<PAGE>
Maturity Management
Adds Value
Few tools are as important to the management of a money-market portfolio as its
average maturity. From the start of the fiscal year, the Fund's average maturity
remained below 50 days through the end of October. During this time, we
anticipated interest rates would rise and sought to avoid any potential price
volatility, confident that higher reinvestment rates were on the horizon. As
rates edged higher on evidence of stronger economic growth late last year, we
began to extend the Fund's average maturity. It wasn't until after the Federal
Reserve raised short-term rates in March, however, that the average maturity was
extended beyond 60 days. At the end of June, the Fund's average maturity stood
at 73 days.
A Cautionary Outlook
By the end of June, longer-maturity bonds had recovered from their late-March
selloff, and a host of crucial economic reports suggested that inflation is less
of a threat than many predicted. The six-year-old expansion may very well wind
down, paving the way for lower interest rates and a sustained bond market rally.
Importantly, profit expectations may be overly optimistic, given that many
companies are unable to raise prices. Also, at 5.5% the current federal funds
rate does not constitute "easy money" in our view.
But the timing of an economic downturn is difficult to predict. For now, growth
is strong and reported profits continue to exceed expectations. Although the Fed
left interest rates unchanged at its May 20
Page 5 -- Scudder Cash Investment Trust
<PAGE>
and July 2 meetings, it may find sufficient reason to raise rates later this
year. Given this uncertain outlook for investors in longer-dated fixed-income
instruments, we believe Scudder Cash Investment Trust will likely have another
chance to demonstrate the value of owning a short-term investment vehicle as
part of a well-diversified portfolio. Plus, with our newly broadened average
maturity guidelines, we intend to take advantage of any future rate increases to
boost the Fund's yield.
Sincerely,
Your Portfolio Management Team
/s/David B. Wines /s/Stephen L. Akers
David B. Wines Stephen L. Akers
/s/Debra A. Hanson /s/K. Sue Cote
Debra A. Hanson K. Sue Cote
Scudder Cash Investment Trust:
A Team Approach to Investing
Scudder Cash Investment Trust is managed by a team of investment professionals
who each play an important role in the Fund's management process. Team members
work together to develop investment strategies and select securities for the
Fund's portfolio. They are supported by Scudder's large staff of economists,
research analysts, traders, and other investment specialists who work in
Scudder's offices across the United States and abroad. We believe our team
approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager David B. Wines assumed responsibility for the Fund's
day-to-day management in 1996. Mr. Wines focuses on overall investment strategy
and has eight years of investment industry experience. Stephen L. Akers,
Portfolio Manager, joined the Fund's team in 1994 and has managed several
fixed-income portfolios since joining Scudder in 1984. Debra A. Hanson,
Portfolio Manager, assists with the development and execution of investment
strategy and has been with Scudder since 1983. K. Sue Cote, Portfolio Manager,
joined Scudder in 1983 and has 13 years experience working with short-term
fixed-income investments.
Page 6 -- Scudder Cash Investment Trust
<PAGE>
Investment Portfolio as of June 30, 1997
<TABLE>
<CAPTION>
Principal Value ($)
Amount ($) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 3.6%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 6/30/97 at 5.9%, to be
repurchased at $46,534,625 on 7/1/97, collateralized by a $40,843,000 U.S. Treasury
Note, 9.125%, 5/15/09 .................................................................... 46,527,000 46,527,000
Repurchase Agreement with State Street Bank and Trust Company dated 6/30/97 at 5.6%, to be
repurchased at $5,034,783 on 7/1/97, collateralized by a $5,100,000 U.S. Treasury
Bond, 6%, 5/31/98 ........................................................................ 5,034,000 5,034,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Repurchase Agreements (Cost $51,561,000) 51,561,000
- ------------------------------------------------------------------------------------------------------------------------------
Commercial Paper 56.9%
- ------------------------------------------------------------------------------------------------------------------------------
Health 1.7%
Pharmaceuticals
Schering Corp., 5.56%, 7/8/97* ............................................................. 24,625,000 24,594,692
-----------
Communications 5.2%
Telephone/Communications
Ameritech Corp., 5.62%, 10/28/97* .......................................................... 20,000,000 19,628,000
Ameritech Corp., 5.535%, 12/22/97* ......................................................... 35,000,000 34,050,625
BellSouth Telecommunications Inc., 5.525%, 9/15/97* ........................................ 20,000,000 19,761,728
-----------
73,440,353
-----------
Financial 41.7%
Banks 10.0%
Abbey National North America, 5.295%, 8/11/97* ............................................. 20,000,000 19,871,246
Abbey National North America, 5.5%, 11/26/97 ............................................... 40,000,000 39,957,262
Chase Bank USA, 5.55%, 11/13/97* ........................................................... 10,000,000 9,982,806
Chase Manhattan Bank, 5.53%, 7/31/97 ....................................................... 10,000,000 9,997,622
Private Export Funding Corp., 5.39%, 8/25/97* .............................................. 24,990,000 24,775,499
Private Export Funding Corp., 5.53%, 12/23/97* ............................................. 40,000,000 38,937,777
-----------
143,522,212
-----------
Insurance 5.2%
Prudential Funding Corp., 5.33%, 7/15/97* .................................................. 10,000,000 9,976,948
Prudential Funding Corp., 5.28%, 8/29/97* .................................................. 20,000,000 19,816,396
Prudential Funding Corp., 5.73%, 10/14/97* ................................................. 45,000,000 44,260,650
-----------
74,053,994
-----------
Business Finance 3.5%
CIT Group Holdings Inc., 5.63%, 7/30/97* ................................................... 20,000,000 19,908,005
Corporate Asset Funding Corp., 5.52% 7/15/97* .............................................. 30,000,000 29,935,600
-----------
49,843,605
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7 -- Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Principal Value ($)
Amount ($) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Finance 5.2%
FCar Owner Trust I, 5.58%, 9/8/97* ......................................................... 25,300,000 25,025,987
Ford Motor Credit Co., 5.66%, 10/9/97* ..................................................... 30,000,000 29,537,589
Household Finance Corp., 5.65%, 7/29/97* ................................................... 20,000,000 19,911,057
-----------
74,474,633
-----------
Other Financial Companies 17.8%
American General Finance Corp., 5.34%, 7/2/97* ............................................. 20,000,000 19,993,840
American General Finance Corp., 5.61%, 7/8/97* ............................................. 40,000,000 39,950,486
Associates Corp. of North America, 5.65%, 8/5/97* .......................................... 40,000,000 39,778,888
Avco Financial Services Inc., 5.57%, 7/15/97* .............................................. 25,000,000 24,942,370
Avco Financial Services, Inc., 5.53%, 9/11/97* ............................................. 30,000,000 29,661,158
Credit Suisse First Boston Corp., 5.527%, 4/15/98 .......................................... 9,617,941 9,617,941
General Electric Capital Corp., 5.55%, 8/12/97* ............................................ 40,000,000 39,734,828
General Electric Capital Corp., 5.42%, 8/13/97* ............................................ 20,000,000 19,865,356
Rincon Securities Inc., 5.57%, 9/9/97* ..................................................... 6,000,000 5,934,088
Transamerica Finance Corp., 5.275%, 8/14/97* ............................................... 24,000,000 23,834,756
-----------
253,313,711
-----------
Manufacturing 5.1%
Office Equipment/Supplies
Pitney Bowes Credit Corp., 5.52%, 7/28/97* ................................................. 25,000,000 24,896,500
Pitney Bowes Credit Corp., 5.64%, 10/7/97* ................................................. 10,000,000 9,848,869
Pitney Bowes Credit Corp., 5.64%, 10/8/97* ................................................. 22,000,000 21,664,205
Pitney Bowes Credit Corp., 5.63%, 11/17/97* ................................................ 16,000,000 15,652,800
-----------
72,062,374
-----------
Energy 1.7%
Oil & Gas Production
Atlantic Richfield Co., 5.65%, 10/7/97* .................................................... 25,000,000 24,622,173
-----------
Utilities 1.5%
Electric Utilities
Pacific Gas & Electric Co., 5.51%, 7/22/97* ................................................ 22,000,000 21,929,288
- ------------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper (Cost $811,949,892) 811,857,035
- ------------------------------------------------------------------------------------------------------------------------------
Certificates Of Deposit 9.6%
- ------------------------------------------------------------------------------------------------------------------------------
Chase Bank Delaware, 5.81%, 12/5/97 ........................................................ 15,000,000 14,998,495
Federal Farm Credit Bank, 5.6%, 11/3/97 .................................................... 10,000,000 10,001,600
LaSalle National Bank, 5.81%, 12/2/97 ...................................................... 10,000,000 9,999,015
Mellon Bank Corp., 6.13%, 9/9/97 ........................................................... 15,000,000 15,004,846
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 -- Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Principal Value ($)
Amount ($) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morgan Guaranty Trust Company, 5.955%, 6/22/98 ............................................. 36,500,000 36,488,094
Morgan Guaranty Trust Company, 5.71%, 1/6/98 ............................................... 10,000,000 9,986,621
National Bank of Detroit, 5.76%, 2/3/98 .................................................... 10,000,000 9,989,081
NationsBank of South Carolina, N.A., 5.55%, 7/24/97 ........................................ 30,000,000 30,000,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit (Cost $136,484,761) 136,467,752
- ------------------------------------------------------------------------------------------------------------------------------
U. S. Government Agency Obligations 10.7%
- ------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 5.25%, 7/14/99** .................................... 56,000,000 55,921,600
Student Loan Marketing Association, 5.42%, 10/30/97** ...................................... 50,000,000 50,070,500
Student Loan Marketing Association, 5.25%, 7/12/99** ....................................... 46,500,000 46,379,100
- ------------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $152,500,000) 152,371,200
- ------------------------------------------------------------------------------------------------------------------------------
Medium-Term and Short-Term Notes 18.5%
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary 0.5%
Department & Chain Stores
Wal-Mart Stores Inc. Note, 5.5%, 3/1/98 .................................................... 8,200,000 8,178,352
-----------
Financial 18.0%
Banks 14.8%
Bank One, Columbus, N.A., Floating Rate Note, 5.69%, 6/10/98** ............................. 30,000,000 29,978,100
Bank of America NT&SA, 5.87%, 1/5/98 ....................................................... 35,000,000 35,006,476
Bankers Trust Co., Medium Term Note, 5.71%, 4/14/98** ...................................... 30,000,000 30,000,000
FCC National Bank Note, 5.725%, 1/7/98 ..................................................... 10,000,000 9,987,351
FCC National Bank Note, 5.73%, 8/21/97 ..................................................... 10,000,000 9,997,083
FCC National Bank Note, 5.59%, 11/7/97 ..................................................... 31,000,000 30,952,633
Fifth Third Bank, 5.45%, 7/11/97 ........................................................... 25,000,000 24,998,563
Huntington National Bank, 6.2%, 7/8/97 ..................................................... 5,000,000 5,000,196
Huntington National Bank, 5.85%, 9/30/97 ................................................... 15,000,000 14,991,775
Pittsburgh National Bank, 5.591%, 7/1/97** ................................................. 20,000,000 19,999,973
-----------
210,912,150
-----------
Other Financial Companies 3.2%
American Express Centurion, Floating Rate Bank Note, 5.658%, 4/24/98** ..................... 20,000,000 20,000,000
First Bank Minnesota Corp., Floating Rate Bank Note, 5.648%, 11/19/97** .................... 25,000,000 24,997,500
----------
44,997,500
- ------------------------------------------------------------------------------------------------------------------------------
Total Medium-Term and Short-Term Notes (Cost $264,162,501) 264,088,002
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 -- Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Principal Value ($)
Amount ($) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fixed Time Deposits 0.7%
- ------------------------------------------------------------------------------------------------------------------------------
Financial -------------
National Bank of Detroit, 5.74%, 1/22/98 (Cost $10,000,000) ................................ 10,000,000 9,987,966
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio-- 100.0% (Cost $1,426,658,154) (a) 1,426,332,955
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $1,426,658,154. At June 30,
1997, net unrealized depreciation for all securities based on tax cost was
$325,199. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $135,052 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value of $460,251.
* Bond equivalent yield to maturity; not a coupon rate. (Unaudited)
** 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 rate as of June 30, 1997.
The accompanying notes are an integral part of the financial statements.
10 -- Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of Assets and Liabilities
as of June 30, 1997
Assets
----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (identified cost $1,426,658,154) ............. $1,426,332,955
Cash ............................................................... 370
Receivable for Fund shares sold .................................... 10,244,030
Interest receivable ................................................ 11,058,021
Other assets ....................................................... 48,232
----------------
Total assets ....................................................... 1,447,683,608
Liabilities
----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ................................... 15,636,071
Dividends payable .................................................. 253,951
Accrued management fee ............................................. 492,255
Other payables and accrued expenses ................................ 677,814
----------------
Total liabilities .................................................. 17,060,091
-----------------------------------------------------------------------------------------
Net assets, at value $1,430,623,517
-----------------------------------------------------------------------------------------
Net Assets
----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized depreciation on investments ............................. (325,199)
Accumulated net realized loss ...................................... (459,101)
Paid-in capital .................................................... 1,431,407,817
-----------------------------------------------------------------------------------------
Net assets, at value $1,430,623,517
-----------------------------------------------------------------------------------------
Net Asset Value
----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($1,430,623,517/1,430,702,947 outstanding shares of
beneficial interest, $.01 par value, unlimited number ----------------
of shares authorized) ........................................... $1.00
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 -- Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations
year ended June 30, 1997
Investment Income
------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Interest ........................................................... $ 79,522,543
----------------
Expenses:
Management fee ..................................................... 5,944,464
Services to shareholders ........................................... 5,587,530
Custodian and accounting fees ...................................... 253,722
Trustees' fees and expenses ........................................ 38,301
Reports to shareholders ............................................ 395,021
Registration fees .................................................. 70,388
Legal .............................................................. 33,783
Auditing ........................................................... 39,710
Other .............................................................. 66,989
----------------
Total expenses before reductions ................................... 12,429,908
Expense reductions ................................................. (2,420)
----------------
Expenses, net ...................................................... 12,427,488
-----------------------------------------------------------------------------------------
Net investment income 67,095,055
-----------------------------------------------------------------------------------------
Unrealized gain on investment transactions
------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation during the period on investments ....... 911,613
-----------------------------------------------------------------------------------------
Net gain on investments 911,613
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 68,006,668
-----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 -- Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Years Ended June 30,
Increase (Decrease) in Net Assets 1997 1996
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ................................... $ 67,095,055 $ 68,809,419
Net unrealized appreciation on investment transactions
during the period .................................... 911,613 268,338
--------------- --------------
Net increase in net assets resulting from operations .... 68,006,668 69,077,757
--------------- --------------
Distributions to shareholders:
From net investment income .............................. (67,095,055) (68,809,419)
--------------- --------------
Fund share transactions in net asset value of
$1.00 per share: Shares sold ............................ 2,146,433,255 1,734,972,406
Net asset value of shares issued to shareholders in
reinvestment of distributions............................ 62,538,989 64,180,974
Shares redeemed ......................................... (2,166,626,217) (1,932,327,819)
--------------- --------------
Net increase (decrease) in net assets from Fund share
transactions ............................................ 42,346,027 (133,174,439)
--------------- --------------
Increase (decrease) in net assets ....................... 43,257,640 (132,906,101)
Net assets at beginning of period ....................... 1,387,365,877 1,520,271,978
--------------- --------------
Net assets at end of period ............................. $1,430,623,517 $1,387,365,877
--------------- --------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 -- Scudder Cash Investment Trust
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
Years Ended June 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of ------------------------------------------------------------------------------------
period ............................. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------------------------------------------------------------------------------------
Net investment income ................. .046 .048 .048 .027 .027 .047 .069 .080 .082 .064
Distributions from net investment
income and net realized capital
gains .............................. (.046) (.048) (.048) (.027) (.027) (.047) (.069) (.080) (.082) (.064)
-----------------------------------------------------------------------------------
Net asset value, end of period ........ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
----------------------------------------------------------------------------------------------------------------------------
Total Return (%) ...................... 4.73 4.89 4.90 2.77 2.75 4.76 7.13 8.23 8.49 6.59
Ratios and Supplemental Data
Net assets, end of period ($ millions). 1,431 1,387 1,520 1,430 1,119 1,361 1,736 1,644 1,563 1,370
Ratio of operating expenses, net to
average daily net assets (%)........ .86 .83 .78 .82 .78 .70 .66 .67 .66 .68
Ratio of operating expenses before
expense reduction, to average
daily net assets (%)................ .86 .83 .78 .82 .78 .70 .66 .67 .66 .68
Ratio of net investment income
to average daily net assets (%)..... 4.63 4.79 4.84 2.78 2.72 4.58 6.91 7.93 8.21 6.44
</TABLE>
14 -- Scudder Cash Investment Trust
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Cash Investment Trust (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles 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. Portfolio securities which have remaining maturities of
sixty days or less are valued by the amortized cost method permitted in
accordance with Rule 2a-7 under the Investment Company Act of 1940. Portfolio
securities for which market quotations are readily available and which have
remaining maturities of sixty-one days or more from the date of valuation are
valued at market. On the sixtieth day prior to maturity and thereafter until
maturity, securities originally purchased with more than sixty days remaining to
maturity are valued at amortized cost calculated daily, based upon the market
valuation of the securities on the sixty-first day prior to maturity. Other
securities are appraised at fair value as determined in good faith by or on
behalf of the Trustees of the Fund. Repurchase agreements are valued at cost
which, when combined with accrued interest receivable, approximates market.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
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, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase price.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. The Fund
accordingly paid no federal income taxes and no provision for federal income
taxes was required. At June 30, 1997, the Fund had a net tax basis capital loss
carryforward of approximately $459,000, which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until June 30, 2004, ($279,000) and June 30, 2005 ($180,000), the respective
expiration dates, whichever occurs first.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a dividend to shareholders of record as of twelve o'clock noon on
each business day and is paid to shareholders monthly. During any particular
year, net realized gains from investment transactions, in excess of available
capital loss carryforwards, would be taxable to the Fund if not distributed and,
therefore, will be distributed to the shareholders. An additional distribution
may be made to the extent necessary to avoid the payment of a four percent
federal excise tax.
The Fund uses the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
Other. Investment transactions are accounted for on a trade-date basis (which in
most instances is the same as the settlement date). Interest income is accrued
pro rata to maturity. All premiums and discounts are amortized/accreted for both
tax and financial reporting purposes.
15 -- Scudder Cash Investment Trust
<PAGE>
B. Related Parties
Under the Fund's Investment Advisory Agreement (the "Agreement") with Scudder
Stevens & Clark, Inc. (the "Adviser"), the Fund agrees to pay the Adviser a fee
equal to an annual rate of 0.50% of the first $250,000,000 of the Fund's average
daily net assets, 0.45% of the next $250,000,000 of such net assets, 0.40% of
the next $500,000,000 of such net assets and 0.35% of such net assets in excess
of $1,000,000,000, computed and accrued daily and payable monthly. As manager of
the assets of the Fund, the Adviser directs the investments of the Fund in
accordance with its investment objectives, policies, and restrictions. The
Adviser determines the securities, instruments, and other contracts relating to
investments to be purchased, sold or entered into by the Fund. In addition to
portfolio management services, the Adviser provides certain administrative
services in accordance with the Management Agreement. The Agreement also
provides that if the Fund's expenses, exclusive of taxes, interest and
extraordinary expenses, exceed specified limits, such excess, up to the amount
of the management fee, will be paid by the Adviser. In addition, effective June
30, 1997, the Adviser has agreed to maintain the annualized expenses of the Fund
at not more than .85% of average daily net assets until October 31, 1998. For
the year ended June 30, 1997, the fee pursuant to the Agreement amounted to
$5,944,464 which was equivalent to an annual effective rate of .41% of the
Fund's average daily net assets.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close in the fourth quarter of 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended June 30, 1997, the amount charged to the Fund by SSC aggregated
$2,907,025, of which $225,977 is unpaid at June 30, 1997.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended June 30, 1997,
the amount charged to the Fund by STC aggregated $1,699,834, of which $155,350
is unpaid at June 30, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
June 30, 1997, the amount charged to the Fund by SFAC aggregated $105,874, of
which $8,818 is unpaid at June 30, 1997.
The Fund is one of several Scudder Funds (the "Underlying Funds") in which the
Scudder Pathway Series Portfolios (the "Portfolios") invest. In accordance with
the Special Servicing Agreement entered into by the Adviser, the Portfolios, the
Underlying Funds, SSC, SFAC, STC, and Scudder Investor Services, Inc., expenses
from the operation of the Portfolios are borne by the Underlying Funds based on
each Underlying Fund's proportionate share of assets owned by the Portfolios. No
Underlying Funds will be charged expenses that exceed the estimated savings to
each respective Underlying Fund. These estimated savings result from the
elimination of separate shareholder accounts which either currently are or have
potential to be invested in the Underlying Funds. At June 30, 1997, the Special
Servicing Agreement expense charged to the Fund amounted to $67,107.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the year ended
June 30, 1997, Trustees' fees and expenses aggregated $38,301.
16 -- Scudder Cash Investment Trust
<PAGE>
Report of Independent Accountants
To the Board of Trustees and the Shareholders of Scudder Cash Investment Trust:
We have audited the accompanying statement of assets and liabilities of Scudder
Cash Investment Trust, including the investment portfolio, as of June 30, 1997,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the ten years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1997, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Cash Investment Trust as of June 30, 1997, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the ten years
in the period then ended, in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 5, 1997
17 -- Scudder Cash Investment Trust
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intentionally
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<PAGE>
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intentionally
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Page 19 -- Scudder Cash Investment Trust
<PAGE>
Officers and Trustees
David S. Lee*
President and Trustee
Dudley H. Ladd*
Vice President and Trustee
E. Michael Brown*
Trustee
Henry P. Becton, Jr.
Trustee; President and
General Manager, WGBH
Educational Foundation
Dawn-Marie Driscoll
Trustee; Executive Fellow,
Center for Business Ethics;
President, Driscoll Associates
Peter B. Freeman
Trustee; Corporate
Director and Trustee
George M. Lovejoy, Jr.
Trustee; President and
Director, Fifty Associates
Stephen L. Akers*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
David Wines*
Vice President
* Scudder, Stevens & Clark, Inc.
Page 20 -- Scudder Cash Investment Trust
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Retirement Programs
- -------------------
IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. +A portion of the income from the tax-free
funds may be subject to federal, state, and local taxes. *A class of shares of
the Fund. **Not available in all states. +++ +++A no-load variable annuity
contract provided by Charter National Life Insurance Company and its affiliate,
offered by Scudder's insurance agencies, 1-800-225-2470. #These funds, advised
by Scudder, Stevens & Clark, Inc., are traded on various stock exchanges.
Page 21 -- Scudder Cash Investment Trust
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which you designate Lets you purchase Scudder fund shares
the purchase details and the bank account, and money is electronically, avoiding potential mailing delays;
electronically debited from that account monthly to designate a bank account and the transaction
regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from that account.
fewer when it's higher, which can reduce your average
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you designate.
DistributionsDirect
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Page 22 -- Scudder Cash Investment Trust
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
- ------------------------------------------------------------------------------------------------------------------------------
New From Scudder: Scudder International Growth and Income Fund
Scudder International Growth and Income Fund takes a yield-oriented approach to investing in international equities. The
Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but
who wish to take a more conservative approach may appreciate the Fund's emphasis on the dividend paying stocks of
well-established companies outside the United States.
- ------------------------------------------------------------------------------------------------------------------------------
The share price of Scudder International Growth and Income Fund will fluctuate. International investing involves special
risks including currency fluctuation and political instability. Contact Scudder Investor Services, Inc., Distributor,
for a prospectus which contains more complete information, including management fees and other expenses. Please read it
carefully before you invest or send money.
</TABLE>
Page 23 -- Scudder Cash Investment Trust
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
This information must be preceded or accompanied by a
current prospectus.
Portfolio changes should not be considered recommendations
for action by individual investors.
SCUDDER
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