Scudder
Cash Investment
Trust
Semiannual Report
December 31, 1997
Pure No-Load(TM) Funds
A money market fund for investors seeking stability of capital and, consistent
therewith, liquidity of capital and current income.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
Scudder Cash Investment Trust
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Date of Inception: 7/23/76 Total Net Assets as of Ticker Symbol: SCTXX
12/31/97: $1.25 billion
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o Scudder Cash Investment Trust maintained its $1.00 share price throughout the
semi-annual period ended December 31, 1997 and provided total returns of 2.46%
for the six-month period, and 4.85% for the year.
o The Fund's 30-day net annualized yield at the end of December 1997 was 4.88%.
o As inflation fears cooled and it became apparent that the Fed would maintain
its hands-off policy on interest rates, we gradually extended the Fund's average
maturity, before pulling back at year end.
Table of Contents
3 Letter from the Fund's President 14 Notes to Financial Statements
4 Portfolio Management Discussion 17 Shareholder Meeting Results
7 Investment Portfolio 20 Officers and Trustees
10 Financial Statements 21 Investment Products and Services
13 Financial Highlights 22 Scudder Solutions
2 - Scudder Cash Investment Trust
<PAGE>
Letter from the Fund's President
Dear Shareholders,
The U.S. economy -- buoyed by moderate growth, strong employment, low
inflation and healthy corporate profits -- continued to enjoy strong performance
over the first six months of Scudder Cash Investment Trust's 1998 fiscal year.
In fact, the U.S. economy can now lay claim to one of the longest expansions on
record -- 6 1/2 years -- a growth trend which we believe shows no sign of ending
soon.
Throughout the period, stocks were on an upward climb, thanks to strong
positive fundamentals in the U.S. economy. On the fixed-income front, markets
benefited from several positive forces, including declining inflation, lower
federal deficits and a strong dollar.
Although inflation remains under control, there is still a chance that the
Federal Reserve Board could raise interest rates in the coming months, which
would quickly affect market returns. This conclusion is based on the belief that
the Federal Reserve Board could view the tight labor market as a potential
inflation danger (unemployment levels are at a 25-year low) and that the
economy's underlying strength may lead to even stronger growth.
If such a scenario comes to pass, we believe you can rest assured that your
Fund offers a safe haven from market volatility. Your Fund seeks to maintain a
stable $1.00 share price -- no matter what the market conditions -- through
investment in short-maturity and high-quality money market securities.
Our long-term outlook for inflation, interest rates and the fixed-income
markets remains positive overall, based on a number of structural trends
including global deregulation and the impact of technology on the manufacture
and distribution of products and services. We invite you to review the Fund
manager's commentary in the attached report. The following pages contain
important information about the Fund's investment activity over the past six
months, as well as the manager's outlook for the coming year.
Finally, it should be noted that, as of January 1, 1998, your Fund has a
new management team, Frank J. Rachwalski, Jr. and John W. Stuebe. We are pleased
that they are bringing their extensive knowledge and expertise to the Fund.
Thank you for choosing Scudder Cash Investment Trust to help meet your
investment needs. If you should have any questions regarding your investment, or
any of the Scudder Funds, please do not hesitate to call Investor Relations at
1-800-225-2470, or visit our Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Cash Investment Trust
3 - Scudder Cash Investment Trust
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Fueled by a near-perfect economic environment, the broader U.S. stock market
continued its record run during the first six months of your Fund's 1998 fiscal
year, experiencing only short-lived setbacks along the way.
Encouraged, too, by relatively stable interest rates and low inflation -- and
undoubtedly heartened by the declining government budget deficit, which is
currently at a 20-year low -- bonds ended the year with solid, though not
stellar, performance.
The stock market's fresh gains -- which come on top of significant increases in
1995 and 1996 -- leave many investors wary of what might come next. Uncertainty
in the bond market in the months ahead remains a given as well, as investors
keep a close watch on inflation and the Federal Reserve Board's actions.
During this period of record growth -- and uncertainty in the fixed-income
markets -- your Fund's investments in short-term, high quality securities
provided a balance to more aggressive stock and bond holdings. Scudder Cash
Investment Trust maintained its $1.00 share price throughout the period and was
able to provide a positive total return of 2.46% for the six months ended
December 31, 1997, and a total return of 4.85% for the year. The Fund's 30-day
net annualized yield at the end of December was 4.88%.
Average Maturity Gradually
Extended to Capture
Higher Yields
During the course of the year, we kept a watchful eye on the Federal Reserve
Board, in anticipation of further interest rate hikes. (The Fed raised the
federal funds rate -- a key short-term interest rate -- in March, but left rates
untouched for the remainder of the year). As inflation fears cooled and it
became apparent that the Fed would maintain its hands-off policy on interest
rates, we gradually extended the Fund's average maturity.
Shorter maturities are generally sought for the stability and liquidity they may
provide -- the primary goals of Scudder Cash Investment Trust. Yet, in a
relatively stable interest rate environment, we seek out longer maturities,
which tend to offer higher yields in exchange for slightly higher risk. In
contrast, when we expect rates to rise, we typically shorten the portfolio's
average maturity, so that issues coming due can be reinvested at higher rates.
Early in 1997, Scudder elected to discontinue having your Fund rated by
independent agencies such as Standard & Poor's Corporation. In the past, your
Fund sought and achieved the highest rating (AAAm), in part by restricting the
average maturity of the portfolio.
Your Fund now has the ability to extend to an average maturity of 90 days and
take advantage of the slightly higher yields on longer-maturity money market
instruments. Previously, when seeking a AAAm rating by Standard & Poor's, the
Fund had to limit the average maturity of its holdings to 60 days.
4 - Scudder Cash Investment Trust
<PAGE>
In early July (the beginning of the Fund's fiscal year), the Fund's average
maturity stood at 73 days. It hovered in the 75-85 day range for much of the
third and fourth quarters. We did, however, pull back slightly on the Fund's
average maturity at year-end -- not for any economic reason, but rather to
maintain liquidity. This, of course, was a seasonal consideration -- we
anticipated heavier than normal cash flows out of the Fund, as investors
withdrew money for holiday shopping, tax payments or credit card bills.
We have subsequently returned the Fund's average maturity closer to the upper
limits of its maturity range. Of course, the Fund's average maturity remains
comfortably in line with its objective of price stability and liquidity.
A Flexible Portfolio
As always, your Fund's portfolio consists of a varied mix of high-quality money
market instruments, including commercial paper, certificates of deposit issued
by major banks, U.S. government agency securities and short- and medium-term
obligations from companies with strong credit ratings.
The Fund continues to be significantly overweighted in commercial paper because
it tends to offer some of the highest money market yields available. Commercial
paper also boosts stability by allowing the Fund to lock in relatively
attractive rates over a period of one to three months. At the end of December,
commercial paper accounted for 43% of the portfolio.
Uncertain Investment
Climate Ahead
Looking ahead, we believe that interest rates are likely to remain flat, as the
economy continues on its slow, steady, non-inflationary growth path. While this
scenario is extremely positive for the long term, it is unlikely that 1998 will
see a repeat of the last three years' outstanding stock market performance.
Consensus predictions for the economy overall are a modest 2.5% growth in gross
domestic product. The meltdown in many smaller Asian economies and growing
problems in Japan are what many economists predict will hold back growth in the
U.S. Weaker markets for exports and competition from cheaper foreign goods sold
in devalued currencies will provide a head wind in the near term. In fact,
Southeast Asia's problems may reverberate throughout the world for some time,
bringing volatility to both the stock and bond markets.
Another potential bump in the road to lower interest rates -- and continued bond
market strength -- are growing problems among Japanese banks that may cause them
to sell sizable amounts of their massive U.S.
bond portfolios.
In an uncertain investment climate such as this, your Fund offers the safety and
stability of short-term, high quality money market instruments. We continue to
believe in the value of owning a short-term money market fund, like Scudder Cash
Investment Trust, as part of a well-diversified portfolio.
5 - Scudder Cash Investment Trust
<PAGE>
In the months ahead, the Fund's management team will continue to collect
economic data and carefully monitor the investment climate as it positions your
Fund for high current income plus price stability and liquidity.
Sincerely,
Your Portfolio Management Team
/s/David B. Wines /s/Debra A. Hanson
David B. Wines Debra A. Hanson
/s/K. Sue Cote
K. Sue Cote
6 - Scudder Cash Investment Trust
<PAGE>
Investment Portfolio as of December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
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<S> <C> <C>
Repurchase Agreements 9.4%
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 12/31/97 at 6.5%,
to be repurchased at $40,014,444 on 1/2/98, collateralized by a $29,688,000
U.S. Treasury Bond, 12.375%, 5/15/04 .................................................. 40,000,000 40,000,000
Repurchase Agreement with Salomon Brothers dated 12/31/97 at 6.7%, to be
repurchased at $75,027,917 on 1/2/98, collateralized by a $79,830,000
U.S. Treasury Bill, 10/15/98 .......................................................... 75,000,000 75,000,000
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Total Repurchase Agreements (Cost $115,000,000) 115,000,000
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Commercial Paper 42.6%
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Communications 7.2%
Telephone/Communications
Ameritech Corp., 5.79%, 1/28/98 ......................................................... 23,000,000 22,900,123
Bell Atlantic Financial Services, 6%, 1/29/98 ........................................... 40,000,000 39,813,333
Bell South Capital Funding, 5.88%, 1/22/98 .............................................. 25,000,000 24,914,250
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87,627,706
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Financial 35.4%
Banks 2.8%
Chase Manhattan Bank, 5.51%, 3/6/98 ..................................................... 10,000,000 9,899,193
NationsBank, 5.72%, 3/12/98 ............................................................. 25,000,000 24,721,917
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34,621,110
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Insurance 2.5%
Prudential Funding Corp., 5.58%, 1/6/98 ................................................. 30,000,000 29,972,050
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Business Finance 13.1%
Barclays U.S. Funding, 5.53%, 1/7/98 .................................................... 30,000,000 29,970,850
Ciesco, 5.7%, 1/14/98 ................................................................... 40,000,000 39,917,667
Corporate Asset Funding, 5.58%, 1/14/98 ................................................. 20,000,000 19,955,822
Matterhorn Capital, 5.72%, 1/23/98 ...................................................... 20,000,000 19,930,089
New Center Asset Trust, 5.77%, 2/5/98 ................................................... 40,000,000 39,775,611
New Center Asset Trust, 5.55%, 1/7/98 ................................................... 10,000,000 9,989,150
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159,539,189
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Other Financial Companies 9.8%
Associates Corp. of North America, 5.58%, 1/13/98 ....................................... 20,000,000 19,959,649
Associates Corp. of North America, 5.55%, 2/24/98 ....................................... 30,000,000 29,737,374
General Electric Capital Corp., 5.87%, 1/22/98 .......................................... 40,000,000 39,863,033
</TABLE>
The accompanying notes are an integral part of the financial statements.
7 - Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
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<S> <C> <C>
General Electric Capital Corp., 5.66%, 3/17/98 .......................................... 20,000,000 19,761,867
Rincon Securities, 5.75%, 1/29/98 ....................................................... 10,000,000 9,955,278
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119,277,201
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Consumer Finance 7.2%
FCar Owner Trust I, 5.61%, 1/13/98 ...................................................... 50,000,000 49,899,123
Ford Motor Credit, 5.55%, 3/10/98 ....................................................... 40,000,000 39,567,600
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89,466,723
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Total Commercial Paper (Cost $520,555,673) 520,503,979
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Certificates Of Deposit 25.0%
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Bank One, Columbus, N.A., 5.51%, 6/10/98 ................................................ 30,000,000 30,017,700
Bank of America, 5.87%, 1/5/98 .......................................................... 35,000,000 35,000,282
Bankers Trust Company, 5.97%, 8/28/98 ................................................... 15,000,000 15,027,432
Bankers Trust Company, 5.91%, 8/7/98 .................................................... 10,000,000 10,003,712
Chase Manhattan Bank, 5.65%, 4/2/98 ..................................................... 20,000,000 19,992,960
FCC National Bank Note, 5.725%, 1/7/98 .................................................. 10,000,000 9,999,578
BankBoston, 5.9%, 7/15/98 ............................................................... 40,000,000 40,006,727
BankBoston, 5.87%, 10/14/98 ............................................................. 15,000,000 15,009,994
JP Morgan, 5.8%, 7/28/98 ................................................................ 10,000,000 9,996,993
LaSalle National Bank, 5.7%, 1/7/98 ..................................................... 30,000,000 29,999,555
Morgan Guaranty Trust Co., 5.71%, 1/6/98 ................................................ 10,000,000 9,999,597
National Bank of Detroit, 5.74%, 1/22/98 ................................................ 10,000,000 9,998,126
National Bank of Detroit, 5.76%, 2/3/98 ................................................. 10,000,000 9,996,791
National Westminster Bank, 5.85%, 7/22/98 ............................................... 10,000,000 9,999,436
National Westminster Bank, 5.855%, 8/7/98 ............................................... 20,000,000 20,001,107
Sun Trust Bank, 5.8%, 7/24/98 ........................................................... 30,000,000 29,978,700
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Total Certificates of Deposit (Cost $304,965,504) 305,028,690
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U. S. Government Agency Obligations 10.0%
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Federal National Mortgage Association, 5.504%, 7/14/99** ................................ 56,000,000 55,736,240
Student Loan Marketing Association, 5.504%, 7/12/99** ................................... 46,500,000 46,337,250
Student Loan Marketing Association, 5.82%, 9/16/98 ...................................... 20,000,000 20,012,400
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Total U.S. Government Agency Obligations (Cost $122,497,314) 122,085,890
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</TABLE>
The accompanying notes are an integral part of the financial statements.
8 - Scudder Cash Investment Trust
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term and Medium-Term Notes 13.0%
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Technology 1.6%
Electronic Data Processing
IBM Credit Corp., 6.12%, 12/15/98 ....................................................... 20,000,000 19,987,800
-------------
Consumer Discretionary 0.7%
Department & Chain Stores
Wal-Mart Stores Inc. Note, 5.5%, 3/1/98 ................................................. 8,200,000 8,192,176
-------------
Financial 10.7%
Banks 9.3%
American Express Centurion Bank, Floating Rate Bank Note, 5.911%, 4/24/98** ............. 20,000,000 20,000,600
Banc One Corporation, 5.51%, 2/24/98 .................................................... 10,000,000 9,913,300
Bankers Trust Company, Medium Term Note, 5.71%, 4/14/98** ............................... 30,000,000 30,000,000
Huntington National Bank, 5.8%, 9/22/98 ................................................. 17,525,000 17,524,753
Morgan Guaranty Trust Co., 5.955%, 6/22/98 .............................................. 36,500,000 36,510,544
-------------
113,949,197
-------------
Consumer Finance 0.8%
Chrysler Financial Corp, 5.375%, 10/15/98 ............................................... 10,000,000 9,951,600
-------------
Other Financial Companies 0.6%
CIT Group Holdings, 5.875%, 11/9/98 ..................................................... 7,000,000 6,998,110
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Total Short-Term and Medium-Term Notes (Cost $159,129,773) 159,078,883
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Total Investment Portfolio -- 100.0% (Cost $1,222,148,264) (a) 1,221,697,442
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $1,222,148,264. At December
31, 1997, net unrealized depreciation for all securities based on tax cost
was $450,822. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax
cost of $126,222 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$577,044.
** 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 December 31,
1997.
The accompanying notes are an integral part of the financial statements.
9 - Scudder Cash Investment Trust
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of December 31, 1997 (Unaudited)
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (cost $1,222,148,264) ....................... $1,221,697,442
Cash ............................................................... 3,793,970
Receivable for Fund shares sold .................................... 27,671,631
Interest receivable ................................................ 13,470,700
Other assets ....................................................... 44,001
----------------
Total assets ....................................................... 1,266,677,744
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Dividends payable .................................................. 210,762
Payable for Fund shares redeemed ................................... 11,855,642
Accrued management fee ............................................. 342,689
Other payables and accrued expenses ................................ 762,057
----------------
Total liabilities .................................................. 13,171,150
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Net assets, at value $1,253,506,594
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Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation (depreciation) on investments .............. (450,822)
Accumulated net realized gain (loss) ............................... (480,894)
Paid-in capital .................................................... 1,254,438,310
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Net assets, at value $1,253,506,594
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Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($1,253,506,594 / 1,253,728,752 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.
10 - Scudder Cash Investment Trust
<PAGE>
Statement of Operations
six months ended December 31, 1997 (Unaudited)
<TABLE>
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
Interest ........................................................... $ 37,049,805
-----------------
Expenses:
Management fee ..................................................... 2,726,588
Services to shareholders ........................................... 2,839,304
Custodian and accounting fees ...................................... 131,192
Trustees' fees and expenses ........................................ 16,744
Reports to shareholders ............................................ 131,192
Registration fees .................................................. 37,168
Auditing ........................................................... 20,240
Legal .............................................................. 11,040
Other .............................................................. 29,869
-----------------
Total expenses before reductions ................................... 5,943,337
Expense reductions ................................................. (392,856)
-----------------
Expenses, net ...................................................... 5,550,481
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Net investment income 31,499,324
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Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments ............................ (21,793)
Net unrealized appreciation (depreciation) during the period on
investments ..................................................... (125,623)
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Net gain (loss) on investments (147,416)
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Net increase (decrease) in net assets resulting from operations $ 31,351,908
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</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Cash Investment Trust
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
December 31, Year Ended
1997 June 30,
Increase (Decrease) in Net Assets (Unaudited) 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ................................... $ 31,499,324 $ 67,095,055
Net realized gain (loss) on investment transactions
during the period .................................... (21,793) --
Net unrealized appreciation (depreciation) on investment
transactions during the period ....................... (125,623) 911,613
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations ........................................... 31,351,908 68,006,668
---------------- ----------------
Distributions to shareholders:
From net investment income .............................. (31,499,324) (67,095,055)
---------------- ----------------
Fund share transactions in net asset value of $1.00
per share:
Shares sold ............................................. 1,012,372,828 2,146,433,255
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................ 29,467,166 62,538,989
Shares redeemed ......................................... (1,218,809,501) (2,166,626,217)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ......................................... (176,969,507) 42,346,027
---------------- ----------------
Increase (decrease) in net assets ....................... (177,116,923) 43,257,640
Net assets at beginning of period ....................... 1,430,623,517 1,387,365,877
---------------- ----------------
Net assets at end of period ............................. $1,253,506,594 $1,430,623,517
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - 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>
Six Months
Ended
December 31,
1997 Years Ended June 30,
(Unaudited) 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $1.000
----------------------------------------------------------------------------------------------------
Net investment income ........ .024 .046 .048 .048 .027 .027 .047 .069 .080 .082 .064
Distributions from net
investment income and
net realized capital
gains ..................... (.024) (.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 $1.000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (%) ............. 2.46** 4.73 4.89 4.90 2.77 2.75 4.76 7.13 8.23 8.49 6.59
Ratios and Supplemental Data
Net assets, end of period
($ millions) .............. 1,254 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 (%) ................ .85* .86 .83 .78 .82 .78 .70 .66 .67 .66 .68
Ratio of operating expenses
before expense reduction,
to average daily net
assets (%) ................ .91* .86 .83 .78 .82 .78 .70 .66 .67 .66 .68
Ratio of net investment
income to average daily
net assets (%) ............ 4.82* 4.63 4.79 4.84 2.78 2.72 4.58 6.91 7.93 8.21 6.44
</TABLE>
* Annualized
** Not annualized
13 - Scudder Cash Investment Trust
<PAGE>
Notes to Financial Statements (Unaudited)
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. Money market instruments purchased with original 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. Debt
securities for which market quotations are readily available and which have
original maturities of sixty-one days or more from the date of valuation are
valued at market. 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 of 1986, as amended, 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.
14 - Scudder Cash Investment Trust
<PAGE>
B. Related Parties
Effective December 31, 1997, Scudder, Stevens & Clark, Inc. ("Scudder") and The
Zurich Insurance Company ("Zurich"), an international insurance and financial
services organization, formed a new global investment organization by combining
Scudder's business with that of Zurich's subsidiary, Zurich Kemper Investments,
Inc. As a result of the transaction, Scudder changed its name to Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"). The transaction between
Scudder and Zurich resulted in the termination of the Fund's Investment
Management Agreement with Scudder. However, a new Investment Management
Agreement (the "Management Agreement") between the Fund and Scudder Kemper was
approved by the Fund's Board of Trustees and by the Fund's Shareholders. The
Management Agreement, which is effective December 31, 1997, is the same in all
material respects as the corresponding previous Investment Management Agreement,
except that Scudder Kemper is the new investment adviser to the Fund.
Under the Management Agreement with Scudder Kemper, 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. 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 six months ended December 31, 1997, the
Adviser did not impose a portion of its fee, amounting to $392,856, and the
portion imposed amounted to $2,333,732, equivalent to an annual effective rate
of .36% of the Fund's average daily net assets.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended December 31, 1997, the amount charged to the Fund by SSC
aggregated $1,495,245, of which $249,459 is unpaid at December 31, 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 six months ended December
31, 1997, the amount charged to the Fund by STC aggregated $878,338, of which
$152,942 is unpaid at December 31, 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 six months
ended December 31, 1997, the amount charged to the Fund by SFAC aggregated
$49,895, of which $8,132 is unpaid at December 31, 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
15 - Scudder Cash Investment Trust
<PAGE>
invested in the Underlying Funds. For the six months ended December 31, 1997,
the Special Servicing Agreement expense charged to the Fund amounted to $44,160.
The Fund pays each Trustee not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the six
months ended December 31, 1997, Trustees' fees and expenses aggregated $16,744.
16 - Scudder Cash Investment Trust
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder Cash Investment
Trust (the "Fund") was held on October 24, 1997, at the office of Scudder Kemper
Investments, Inc. (formerly Scudder, Stevens & Clark, Inc.), Two International
Place, Boston, Massachusetts 02110. At the Meeting, as adjourned and reconvened,
the following matters were voted upon by the shareholders (the resulting votes
for each matter are presented below). With regard to certain proposals, it was
recommended that the Meeting be reconvened in order to provide shareholders with
an additional opportunity to return their proxies. The date of the reconvened
meeting at which the matters were decided is noted after the proposed matter.
1. To approve the new Investment Management Agreement between the Fund and
Scudder Kemper Investments, Inc.
<TABLE>
<CAPTION>
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
<S> <C> <C> <C>
656,606,151 36,090,362 26,765,833 152,323
</TABLE>
2. To elect Trustees.
<TABLE>
<CAPTION>
Number of Votes:
----------------
Trustee For Withheld
------- --- --------
<S> <C> <C>
Henry P. Becton, Jr. 688,913,961 30,548,385
Dawn-Marie Driscoll 689,036,057 30,426,289
Peter B. Freeman 688,665,721 30,796,625
George M. Lovejoy, Jr. 688,683,088 30,779,258
Dr. Wesley W. Marple, Jr. 689,006,720 30,455,626
Daniel Pierce 689,064,839 30,397,507
Kathryn L. Quirk 689,082,529 30,379,817
Jean C. Tempel 688,648,408 30,813,938
</TABLE>
3. To approve the Board's discretionary authority to convert the Fund to a
master/feeder fund structure through a sale or transfer of assets or
otherwise. (Approved on December 2, 1997.)
<TABLE>
<CAPTION>
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
<S> <C> <C> <C>
706,987,303 73,415,430 60,457,924 0
17 - Scudder Cash Investment Trust
<PAGE>
4. To approve certain amendments to the Declaration of Trust. Sufficient
proxies had not been received by December 2, 1997 to approve the
amendments to the Declaration of Trust. Management has determined not to
continue to seek shareholder approval for this item.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
715,302,970 64,561,454 60,996,233 0
</TABLE>
5. To approve the revision of certain fundamental investment policies.
<TABLE>
<CAPTION>
Number of Votes:
----------------
Broker
Fundamental Policies For Against Abstain Non-Votes*
-------------------- --- ------- ------- ----------
<S> <C> <C> <C> <C>
5.1 Diversification 615,369,412 53,729,359 50,211,252 152,323
5.2 Borrowing 611,846,714 57,234,366 50,228,943 152,323
5.3 Senior securities 614,625,312 54,461,100 50,223,611 152,323
5.4 Concentration 614,512,311 54,568,769 50,228,943 152,323
5.5 Underwriting of securities 615,275,845 44,600,360 59,433,818 152,323
5.6 Investment in real estate 612,752,061 46,795,117 59,762,845 152,323
5.7 Purchase of physical
commodities 612,696,772 46,919,812 59,693,439 152,323
5.8 Lending 612,952,992 46,533,685 59,823,346 152,323
</TABLE>
6. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's independent
accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
668,366,046 17,605,401 33,490,899
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
18 - Scudder Cash Investment Trust
<PAGE>
This Page
intentionally
left blank.
19 - Scudder Cash Investment Trust
<PAGE>
Officers and Trustees
Daniel Pierce*
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
Wesley W. Marple, Jr.
Trustee
Kathryn L. Quirk*
Trustee, Vice President and Assistant Secretary
Jean C. Tempel
Trustee
Stephen L. Akers*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Edward J. O'Connell*
Vice President and Assistant Treasurer
David Wines*
Vice President
Caroline Pearson
Assistant Secretary
*Scudder Kemper Investments, Inc.
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
Scudder S&P 500 Index 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
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal 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. Certain Scudder funds may not be
available for purchase or exchange. +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 Kemper Investments, Inc., are traded on the New York Stock Exchange
and, in some cases, on various other stock exchanges.
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 money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
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 previously designated.
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
- ------------------------------------------------------------------------------------------------------------------------------
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
</TABLE>
23 - Scudder Cash Investment Trust
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $200 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts. It is one of the ten largest mutual fund companies in the
U.S.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Group. As a result, Zurich's subsidiary, Zurich Kemper Investments,
Inc., with 50 years of mutual fund and investment management experience, was
combined with Scudder. Headquartered in New York, Scudder Kemper Investments
offers a full range of investment counsel and asset management capabilities,
based on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and perspective,
the firm seeks opportunities in markets throughout the world to meet the needs
of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Group. The Zurich Group is an internationally recognized leader in
financial services, including property/casualty and life insurance, reinsurance,
and asset management.
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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