UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number: 811-07507
Deutsche Investments VIT Funds
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue
New York, NY 10154-0004
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (212) 250-3220
Paul Schubert
60 Wall Street
New York, NY 10005
(Name and Address of Agent for Service)
| Date of fiscal year end: | 12/31 |
| Date of reporting period: | 6/30/2016 |
| ITEM 1. | REPORT TO STOCKHOLDERS |
June 30, 2016
Semiannual Report
Deutsche Investments VIT Funds
Deutsche Equity 500 Index VIP
Contents
|
3 Performance Summary 3 Portfolio Summary 4 Portfolio Manager 5 Investment Portfolio 17 Statement of Assets and Liabilities 17 Statement of Operations 18 Statement of Changes in Net Assets 21 Financial Highlights 23 Notes to Financial Statements 28 Information About Your Fund's Expenses 29 Proxy Voting 30 Advisory Agreement Board Considerations and Fee Evaluation |
This report must be preceded or accompanied by a prospectus. To obtain an additional prospectus or summary prospectus, if available, call (800) 728-3337 or your financial representative. We advise you to consider the Fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the Fund. Please read the prospectus carefully before you invest.
Stocks may decline in value. Various factors, including costs, cash flows and security selection, may cause the Fund’s performance to differ from that of the index. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. The Fund may lend securities to approved institutions. See the prospectus for details.
Deutsche Asset Management represents the asset management activities conducted by Deutsche Bank AG or any of its subsidiaries.
Deutsche AM Distributors, Inc., 222 South Riverside Plaza, Chicago, IL 60606, (800) 621-1148
NOT FDIC/NCUA INSURED NO
BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Performance Summary June 30, 2016 (Unaudited)
Fund performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please contact your participating insurance company for the Fund's most recent month-end performance. Performance figures for Classes A, B and B2 differ because each class maintains a distinct expense structure. Performance doesn't reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option. These charges and fees will reduce returns.
The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated May 1, 2016 are 0.34%, 0.67% and 0.74% for Class A, Class B and Class B2 shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.
| Growth of an Assumed $10,000 Investment | ||
|
■ Deutsche Equity 500 Index VIP — Class A ■ S&P 500® Index |
The Standard & Poor's 500® (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index. | |
 |
||
| Yearly periods ended June 30 | ||
| Comparative Results (as of June 30, 2016) | ||||||
| Deutsche Equity 500 Index VIP | 6-Month‡ | 1-Year | 3-Year | 5-Year | 10-Year | |
| Class A | Growth of $10,000 | $10,369 | $10,374 | $13,808 | $17,461 | $19,963 |
| Average annual total return | 3.69% | 3.74% | 11.36% | 11.79% | 7.16% | |
| S&P 500 Index | Growth of $10,000 | $10,384 | $10,399 | $13,920 | $17,702 | $20,465 |
| Average annual total return | 3.84% | 3.99% | 11.66% | 12.10% | 7.42% | |
| Deutsche Equity 500 Index VIP | 6-Month‡ | 1-Year | 3-Year | 5-Year | 10-Year | |
| Class B | Growth of $10,000 | $10,353 | $10,348 | $13,699 | $17,244 | $19,466 |
| Average annual total return | 3.53% | 3.48% | 11.06% | 11.51% | 6.89% | |
| S&P 500 Index | Growth of $10,000 | $10,384 | $10,399 | $13,920 | $17,702 | $20,465 |
| Average annual total return | 3.84% | 3.99% | 11.66% | 12.10% | 7.42% | |
| Deutsche Equity 500 Index VIP | 6-Month‡ | 1-Year | 3-Year | 5-Year | 10-Year | |
| Class B2 | Growth of $10,000 | $10,353 | $10,337 | $13,658 | $17,142 | $19,236 |
| Average annual total return | 3.53% | 3.37% | 10.95% | 11.38% | 6.76% | |
| S&P 500 Index | Growth of $10,000 | $10,384 | $10,399 | $13,920 | $17,702 | $20,465 |
| Average annual total return | 3.84% | 3.99% | 11.66% | 12.10% | 7.42% | |
The growth of $10,000 is cumulative.
‡ Total returns shown for periods less than one year are not annualized.
Portfolio Summary (Unaudited)
| Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral) | 6/30/16 | 12/31/15 |
| Common Stocks | 98% | 100% |
| Cash Equivalents | 2% | 0% |
| Government & Agency Obligations | 0% | 0% |
| 100% | 100% |
| Sector Diversification (As a % of Common Stocks) | 6/30/16 | 12/31/15 |
| Information Technology | 20% | 21% |
| Financials | 15% | 16% |
| Health Care | 15% | 15% |
| Consumer Discretionary | 12% | 13% |
| Consumer Staples | 11% | 10% |
| Industrials | 10% | 10% |
| Energy | 7% | 7% |
| Utilities | 4% | 3% |
| Telecommunication Services | 3% | 2% |
| Materials | 3% | 3% |
| 100% | 100% |
| Ten Largest Equity Holdings (18.4% of Net Assets) | |
|
1. Apple, Inc. Designs, manufactures and markets personal computers and related computing and mobile communications devices |
2.8% |
|
2. Alphabet, Inc. Holding company with subsidiaries that provide Web-based search, maps, hardware products and various software applications |
2.2% |
|
3. Microsoft Corp. Develops, manufactures, licenses, sells and supports software products |
2.2% |
|
4. Exxon Mobil Corp. Explorer and producer of oil and gas |
2.1% |
|
5. Johnson & Johnson Provider of health care products |
1.8% |
|
6. General Electric Co. Diversified technology, media and financial services company |
1.5% |
|
7. Amazon.com, Inc. An online retailer; sells books, music and videotapes |
1.5% |
|
8. Berkshire Hathaway, Inc. Holding company of insurance business and a variety of other businesses |
1.5% |
|
9. AT&T, Inc. Provider of communications services |
1.4% |
|
10. Facebook, Inc. Operates a social networking Web site |
1.4% |
|
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund's investment portfolio, see page 5. | |
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on deutschefunds.com from time to time. Please see the Fund's current prospectus for more information.
Portfolio Manager
Brent Reeder
Senior Vice President, Northern Trust Investments, Inc., Subadvisor to the Fund
Portfolio Manager
Investment Portfolio June 30, 2016 (Unaudited)
Shares |
Value ($) | |
| Common Stocks 98.0% | ||
| Consumer Discretionary 12.0% | ||
| Auto Components 0.3% | ||
| BorgWarner, Inc. | 6,273 | 185,179 |
| Delphi Automotive PLC | 7,687 | 481,206 |
| Goodyear Tire & Rubber Co. | 7,732 | 198,403 |
| Johnson Controls, Inc. | 18,344 | 811,906 |
| 1,676,694 | ||
| Automobiles 0.5% | ||
| Ford Motor Co. (a) | 111,207 | 1,397,872 |
| General Motors Co. | 39,743 | 1,124,727 |
| Harley-Davidson, Inc. (a) | 5,065 | 229,444 |
| 2,752,043 | ||
| Distributors 0.1% | ||
| Genuine Parts Co. (a) | 4,232 | 428,490 |
| LKQ Corp.* | 8,673 | 274,934 |
| 703,424 | ||
| Diversified Consumer Services 0.0% | ||
| H&R Block, Inc. | 6,228 | 143,244 |
| Hotels, Restaurants & Leisure 1.7% | ||
| Carnival Corp. | 12,507 | 552,809 |
| Chipotle Mexican Grill, Inc.* (a) | 819 | 329,860 |
| Darden Restaurants, Inc. (a) | 3,276 | 207,502 |
| Marriott International, Inc. "A" (a) | 5,358 | 356,093 |
| McDonald's Corp. | 24,966 | 3,004,408 |
| Royal Caribbean Cruises Ltd. (a) | 4,770 | 320,306 |
| Starbucks Corp. | 41,674 | 2,380,419 |
| Starwood Hotels & Resorts Worldwide, Inc. | 4,755 | 351,632 |
| Wyndham Worldwide Corp. (a) | 3,238 | 230,643 |
| Wynn Resorts Ltd. (a) | 2,353 | 213,276 |
| Yum! Brands, Inc. | 11,579 | 960,131 |
| 8,907,079 | ||
| Household Durables 0.5% | ||
| D.R. Horton, Inc. | 9,564 | 301,075 |
| Garmin Ltd. (a) | 3,278 | 139,053 |
| Harman International Industries, Inc. | 2,066 | 148,380 |
| Leggett & Platt, Inc. | 3,844 | 196,467 |
| Lennar Corp. "A" | 5,115 | 235,801 |
| Mohawk Industries, Inc.* | 1,796 | 340,809 |
| Newell Brands, Inc. | 12,949 | 628,933 |
| PulteGroup, Inc. | 9,178 | 178,879 |
| Whirlpool Corp. (a) | 2,181 | 363,442 |
| 2,532,839 | ||
| Internet & Catalog Retail 2.2% | ||
| Amazon.com, Inc.* | 11,000 | 7,871,820 |
| Expedia, Inc. | 3,325 | 353,448 |
| Netflix, Inc.* | 12,123 | 1,109,012 |
| The Priceline Group, Inc.* | 1,413 | 1,764,003 |
| TripAdvisor, Inc.* | 3,298 | 212,061 |
| 11,310,344 | ||
| Leisure Products 0.1% | ||
| Hasbro, Inc. | 3,184 | 267,424 |
| Mattel, Inc. (a) | 9,728 | 304,389 |
| 571,813 | ||
| Media 2.7% | ||
| CBS Corp. "B" | 11,753 | 639,833 |
| Comcast Corp. "A" | 68,735 | 4,480,835 |
Shares |
Value ($) | |
| Discovery Communications, Inc. "A"* (a) | 4,359 | 109,977 |
| Discovery Communications, Inc. "C"* | 6,708 | 159,986 |
| Interpublic Group of Companies, Inc. | 11,268 | 260,291 |
| News Corp. "A" | 10,954 | 124,328 |
| News Corp. "B" | 2,814 | 32,839 |
| Omnicom Group, Inc. (a) | 6,786 | 552,991 |
| Scripps Networks Interactive, Inc. "A" | 2,677 | 166,697 |
| TEGNA, Inc. | 6,361 | 147,384 |
| Time Warner, Inc. | 22,377 | 1,645,605 |
| Twenty-First Century Fox, Inc. "A" | 31,293 | 846,476 |
| Twenty-First Century Fox, Inc. "B" | 12,176 | 331,796 |
| Viacom, Inc. "B" | 9,768 | 405,079 |
| Walt Disney Co. (a) | 42,403 | 4,147,861 |
| 14,051,978 | ||
| Multiline Retail 0.6% | ||
| Dollar General Corp. | 8,083 | 759,802 |
| Dollar Tree, Inc.* | 6,645 | 626,225 |
| Kohl's Corp. | 5,095 | 193,203 |
| Macy's, Inc. | 8,731 | 293,449 |
| Nordstrom, Inc. (a) | 3,646 | 138,730 |
| Target Corp. | 16,811 | 1,173,744 |
| 3,185,153 | ||
| Specialty Retail 2.5% | ||
| Advance Auto Parts, Inc. | 2,119 | 342,494 |
| AutoNation, Inc.* | 2,119 | 99,551 |
| AutoZone, Inc.* (a) | 841 | 667,619 |
| Bed Bath & Beyond, Inc. (a) | 4,292 | 185,500 |
| Best Buy Co., Inc. | 8,129 | 248,747 |
| CarMax, Inc.* (a) | 5,591 | 274,127 |
| Foot Locker, Inc. (a) | 3,776 | 207,151 |
| Home Depot, Inc. | 35,363 | 4,515,502 |
| L Brands, Inc. | 7,211 | 484,074 |
| Lowe's Companies, Inc. | 25,188 | 1,994,134 |
| O'Reilly Automotive, Inc.* (a) | 2,751 | 745,796 |
| Ross Stores, Inc. | 11,465 | 649,951 |
| Signet Jewelers Ltd. | 2,272 | 187,236 |
| Staples, Inc. | 18,047 | 155,565 |
| The Gap, Inc. (a) | 6,181 | 131,161 |
| Tiffany & Co. (a) | 3,155 | 191,319 |
| TJX Companies, Inc. | 18,804 | 1,452,233 |
| Tractor Supply Co. | 3,834 | 349,584 |
| Ulta Salon, Cosmetics & Fragrance, Inc.* | 1,790 | 436,116 |
| Urban Outfitters, Inc.* | 2,644 | 72,710 |
| 13,390,570 | ||
| Textiles, Apparel & Luxury Goods 0.8% | ||
| Coach, Inc. (a) | 7,799 | 317,731 |
| Hanesbrands, Inc. | 10,589 | 266,101 |
| Michael Kors Holdings Ltd.* | 4,918 | 243,343 |
| NIKE, Inc. "B" | 37,908 | 2,092,522 |
| PVH Corp. | 2,321 | 218,708 |
| Ralph Lauren Corp. | 1,663 | 149,038 |
| Under Armour, Inc. "A"* (a) | 5,253 | 210,803 |
| Under Armour, Inc. "C"* | 5,290 | 192,566 |
| VF Corp. | 9,410 | 578,621 |
| 4,269,433 | ||
Shares |
Value ($) | |
| Consumer Staples 10.3% | ||
| Beverages 2.3% | ||
| Brown-Forman Corp. "B" | 2,811 | 280,425 |
| Coca-Cola Co. | 110,784 | 5,021,839 |
| Constellation Brands, Inc. "A" | 4,985 | 824,519 |
| Dr. Pepper Snapple Group, Inc. | 5,314 | 513,492 |
| Molson Coors Brewing Co. "B" | 5,213 | 527,191 |
| Monster Beverage Corp.* (a) | 3,985 | 640,429 |
| PepsiCo, Inc. | 41,131 | 4,357,418 |
| 12,165,313 | ||
| Food & Staples Retailing 2.3% | ||
| Costco Wholesale Corp. | 12,462 | 1,957,033 |
| CVS Health Corp. | 30,562 | 2,926,006 |
| Kroger Co. | 27,142 | 998,554 |
| Sysco Corp. | 14,891 | 755,569 |
| Wal-Mart Stores, Inc. | 43,423 | 3,170,748 |
| Walgreens Boots Alliance, Inc. | 24,585 | 2,047,193 |
| Whole Foods Market, Inc. (a) | 9,071 | 290,453 |
| 12,145,556 | ||
| Food Products 1.8% | ||
| Archer-Daniels-Midland Co. | 16,622 | 712,918 |
| Campbell Soup Co. | 5,027 | 334,446 |
| ConAgra Foods, Inc. | 12,314 | 588,732 |
| General Mills, Inc. (a) | 16,836 | 1,200,744 |
| Hormel Foods Corp. | 7,797 | 285,370 |
| Kellogg Co. | 7,147 | 583,553 |
| Kraft Heinz Co. | 16,963 | 1,500,886 |
| McCormick & Co., Inc. | 3,342 | 356,491 |
| Mead Johnson Nutrition Co. | 5,270 | 478,252 |
| Mondelez International, Inc. "A" | 44,149 | 2,009,221 |
| The Hershey Co. | 4,042 | 458,727 |
| The JM Smucker Co. | 3,381 | 515,298 |
| Tyson Foods, Inc. "A" | 8,568 | 572,257 |
| 9,596,895 | ||
| Household Products 2.0% | ||
| Church & Dwight Co., Inc. | 3,623 | 372,771 |
| Clorox Co. | 3,670 | 507,891 |
| Colgate-Palmolive Co. | 25,466 | 1,864,111 |
| Kimberly-Clark Corp. | 10,221 | 1,405,183 |
| Procter & Gamble Co. | 75,703 | 6,409,773 |
| 10,559,729 | ||
| Personal Products 0.1% | ||
| Estee Lauder Companies, Inc. "A" | 6,286 | 572,152 |
| Tobacco 1.8% | ||
| Altria Group, Inc. | 55,614 | 3,835,141 |
| Philip Morris International, Inc. | 44,109 | 4,486,768 |
| Reynolds American, Inc. | 23,653 | 1,275,606 |
| 9,597,515 | ||
| Energy 7.2% | ||
| Energy Equipment & Services 1.1% | ||
| Baker Hughes, Inc. | 12,379 | 558,665 |
| Diamond Offshore Drilling, Inc. | 1,919 | 46,689 |
| FMC Technologies, Inc.* | 6,558 | 174,902 |
| Halliburton Co. | 24,472 | 1,108,337 |
| Helmerich & Payne, Inc. (a) | 3,071 | 206,156 |
| National Oilwell Varco, Inc. (a) | 10,777 | 362,646 |
| Schlumberger Ltd. | 39,478 | 3,121,920 |
| Transocean Ltd. (a) | 10,116 | 120,279 |
| 5,699,594 | ||
Shares |
Value ($) | |
| Oil, Gas & Consumable Fuels 6.1% | ||
| Anadarko Petroleum Corp. | 14,594 | 777,130 |
| Apache Corp. | 10,719 | 596,727 |
| Cabot Oil & Gas Corp. | 13,253 | 341,132 |
| Chesapeake Energy Corp.* | 16,756 | 71,716 |
| Chevron Corp. | 53,589 | 5,617,735 |
| Cimarex Energy Co. | 2,691 | 321,090 |
| Columbia Pipeline Group, Inc. | 11,566 | 294,817 |
| Concho Resources, Inc.* | 3,732 | 445,116 |
| ConocoPhillips | 35,251 | 1,536,944 |
| Devon Energy Corp. | 14,926 | 541,067 |
| EOG Resources, Inc. (a) | 15,585 | 1,300,101 |
| EQT Corp. | 4,922 | 381,110 |
| Exxon Mobil Corp. | 117,895 | 11,051,477 |
| Hess Corp. | 7,476 | 449,308 |
| Kinder Morgan, Inc. | 51,828 | 970,220 |
| Marathon Oil Corp. | 24,231 | 363,707 |
| Marathon Petroleum Corp. | 14,993 | 569,134 |
| Murphy Oil Corp. (a) | 4,469 | 141,891 |
| Newfield Exploration Co.* | 5,678 | 250,854 |
| Noble Energy, Inc. | 12,120 | 434,744 |
| Occidental Petroleum Corp. | 21,648 | 1,635,723 |
| ONEOK, Inc. | 6,062 | 287,642 |
| Phillips 66 | 13,302 | 1,055,381 |
| Pioneer Natural Resources Co. (a) | 4,627 | 699,649 |
| Range Resources Corp. | 4,820 | 207,935 |
| Southwestern Energy Co.* | 13,144 | 165,352 |
| Spectra Energy Corp. | 19,484 | 713,699 |
| Tesoro Corp. | 3,458 | 259,073 |
| Valero Energy Corp. | 13,328 | 679,728 |
| Williams Companies, Inc. | 19,556 | 422,996 |
| 32,583,198 | ||
| Financials 15.4% | ||
| Banks 5.1% | ||
| Bank of America Corp. | 292,346 | 3,879,431 |
| BB&T Corp. | 23,343 | 831,244 |
| Citigroup, Inc. | 83,457 | 3,537,742 |
| Citizens Financial Group, Inc. | 14,826 | 296,223 |
| Comerica, Inc. | 4,927 | 202,648 |
| Fifth Third Bancorp. | 22,105 | 388,827 |
| Huntington Bancshares, Inc. (a) | 23,020 | 205,799 |
| JPMorgan Chase & Co. | 103,925 | 6,457,900 |
| KeyCorp | 23,787 | 262,846 |
| M&T Bank Corp. | 4,513 | 533,572 |
| People's United Financial, Inc. (a) | 8,846 | 129,682 |
| PNC Financial Services Group, Inc. | 14,194 | 1,155,250 |
| Regions Financial Corp. | 36,006 | 306,411 |
| SunTrust Banks, Inc. | 14,318 | 588,183 |
| U.S. Bancorp. | 46,024 | 1,856,148 |
| Wells Fargo & Co. | 131,320 | 6,215,376 |
| Zions Bancorp. | 5,877 | 147,689 |
| 26,994,971 | ||
| Capital Markets 1.7% | ||
| Affiliated Managers Group, Inc.* | 1,538 | 216,504 |
| Ameriprise Financial, Inc. | 4,757 | 427,416 |
| Bank of New York Mellon Corp. | 30,480 | 1,184,148 |
| BlackRock, Inc. | 3,577 | 1,225,230 |
| Charles Schwab Corp. | 34,048 | 861,755 |
| E*TRADE Financial Corp.* | 8,040 | 188,860 |
| Franklin Resources, Inc. | 10,464 | 349,184 |
| Invesco Ltd. | 12,019 | 306,965 |
| Legg Mason, Inc. | 3,054 | 90,063 |
Shares |
Value ($) | |
| Morgan Stanley | 42,827 | 1,112,646 |
| Northern Trust Corp. | 6,217 | 411,938 |
| State Street Corp. | 11,158 | 601,639 |
| T. Rowe Price Group, Inc. (a) | 6,997 | 510,571 |
| The Goldman Sachs Group, Inc. | 11,000 | 1,634,380 |
| 9,121,299 | ||
| Consumer Finance 0.7% | ||
| American Express Co. | 23,008 | 1,397,966 |
| Capital One Financial Corp. (a) | 14,598 | 927,119 |
| Discover Financial Services | 11,737 | 628,986 |
| Navient Corp. | 9,526 | 113,836 |
| Synchrony Financial* | 23,623 | 597,189 |
| 3,665,096 | ||
| Diversified Financial Services 2.1% | ||
| Berkshire Hathaway, Inc. "B"* | 53,291 | 7,716,004 |
| CME Group, Inc. | 9,593 | 934,358 |
| Intercontinental Exchange, Inc. | 3,369 | 862,329 |
| Leucadia National Corp. | 9,340 | 161,862 |
| Moody's Corp. | 4,792 | 449,059 |
| Nasdaq, Inc. | 3,318 | 214,575 |
| S&P Global, Inc. | 7,519 | 806,488 |
| 11,144,675 | ||
| Insurance 2.6% | ||
| Aflac, Inc. | 11,769 | 849,251 |
| Allstate Corp. | 10,583 | 740,281 |
| American International Group, Inc. | 31,857 | 1,684,917 |
| Aon PLC | 7,552 | 824,905 |
| Arthur J. Gallagher & Co. | 5,013 | 238,619 |
| Assurant, Inc. | 1,798 | 155,185 |
| Chubb Ltd. | 13,211 | 1,726,810 |
| Cincinnati Financial Corp. | 4,230 | 316,785 |
| Hartford Financial Services Group, Inc. | 11,235 | 498,609 |
| Lincoln National Corp. | 6,733 | 261,038 |
| Loews Corp. | 7,518 | 308,915 |
| Marsh & McLennan Companies, Inc. | 14,798 | 1,013,071 |
| MetLife, Inc. | 31,306 | 1,246,918 |
| Principal Financial Group, Inc. | 7,582 | 311,696 |
| Progressive Corp. | 16,549 | 554,391 |
| Prudential Financial, Inc. | 12,634 | 901,310 |
| The Travelers Companies, Inc. | 8,281 | 985,770 |
| Torchmark Corp. | 3,108 | 192,137 |
| Unum Group | 6,755 | 214,741 |
| Willis Towers Watson PLC | 3,913 | 486,425 |
| XL Group PLC | 8,141 | 271,177 |
| 13,782,951 | ||
| Real Estate Investment Trusts 3.1% | ||
| American Tower Corp. (REIT) | 12,108 | 1,375,590 |
| Apartment Investment & Management Co. "A" (REIT) | 4,354 | 192,273 |
| AvalonBay Communities, Inc. (REIT) | 3,889 | 701,537 |
| Boston Properties, Inc. (REIT) | 4,359 | 574,952 |
| Crown Castle International Corp. (REIT) | 9,598 | 973,525 |
| Digital Realty Trust, Inc. (REIT) (a) | 4,158 | 453,180 |
| Equinix, Inc. (REIT) | 1,980 | 767,705 |
| Equity Residential (REIT) | 10,354 | 713,183 |
| Essex Property Trust, Inc. (REIT) | 1,849 | 421,738 |
| Extra Space Storage, Inc. (REIT) | 3,503 | 324,168 |
| Federal Realty Investment Trust (REIT) | 2,081 | 344,510 |
Shares |
Value ($) | |
| General Growth Properties, Inc. (REIT) | 16,479 | 491,404 |
| HCP, Inc. (REIT) | 13,156 | 465,459 |
| Host Hotels & Resorts, Inc. (REIT) (a) | 21,136 | 342,615 |
| Iron Mountain, Inc. (REIT) | 6,694 | 266,622 |
| Kimco Realty Corp. (REIT) | 12,091 | 379,416 |
| Prologis, Inc. (REIT) | 14,886 | 730,009 |
| Public Storage (REIT) | 4,176 | 1,067,344 |
| Realty Income Corp. (REIT) (a) | 7,367 | 510,975 |
| Simon Property Group, Inc. (REIT) | 8,819 | 1,912,841 |
| SL Green Realty Corp. (REIT) | 2,863 | 304,824 |
| The Macerich Co. (REIT) | 3,648 | 311,503 |
| UDR, Inc. (REIT) | 7,463 | 275,534 |
| Ventas, Inc. (REIT) | 9,671 | 704,242 |
| Vornado Realty Trust (REIT) | 5,024 | 503,003 |
| Welltower, Inc. (REIT) (a) | 10,201 | 777,010 |
| Weyerhaeuser Co. (REIT) | 21,161 | 629,963 |
| 16,515,125 | ||
| Real Estate Management & Development 0.1% | ||
| CBRE Group, Inc. "A"* | 8,413 | 222,776 |
| Health Care 14.4% | ||
| Biotechnology 2.9% | ||
| AbbVie, Inc. | 46,003 | 2,848,046 |
| Alexion Pharmaceuticals, Inc.* | 6,381 | 745,045 |
| Amgen, Inc. | 21,371 | 3,251,598 |
| Biogen, Inc.* | 6,236 | 1,507,989 |
| Celgene Corp.* | 22,036 | 2,173,411 |
| Gilead Sciences, Inc. | 37,880 | 3,159,950 |
| Regeneron Pharmaceuticals, Inc.* | 2,211 | 772,147 |
| Vertex Pharmaceuticals, Inc.* | 6,979 | 600,334 |
| 15,058,520 | ||
| Health Care Equipment & Supplies 2.4% | ||
| Abbott Laboratories | 41,724 | 1,640,170 |
| Baxter International, Inc. | 15,768 | 713,029 |
| Becton, Dickinson & Co. | 6,063 | 1,028,224 |
| Boston Scientific Corp.* | 38,646 | 903,157 |
| C.R. Bard, Inc. | 2,083 | 489,838 |
| DENTSPLY SIRONA, Inc. | 6,641 | 412,008 |
| Edwards Lifesciences Corp.* | 5,975 | 595,887 |
| Hologic, Inc.* | 6,786 | 234,795 |
| Intuitive Surgical, Inc.* | 1,085 | 717,630 |
| Medtronic PLC (a) | 40,008 | 3,471,494 |
| St. Jude Medical, Inc. | 8,033 | 626,574 |
| Stryker Corp. | 8,967 | 1,074,516 |
| Varian Medical Systems, Inc.* | 2,678 | 220,212 |
| Zimmer Biomet Holdings, Inc. | 5,664 | 681,832 |
| 12,809,366 | ||
| Health Care Providers & Services 2.7% | ||
| Aetna, Inc. | 9,993 | 1,220,445 |
| AmerisourceBergen Corp. (a) | 5,236 | 415,319 |
| Anthem, Inc. | 7,487 | 983,343 |
| Cardinal Health, Inc. | 9,200 | 717,692 |
| Centene Corp.* | 4,901 | 349,784 |
| Cigna Corp. | 7,329 | 938,039 |
| DaVita HealthCare Partners, Inc.* | 4,664 | 360,620 |
| Express Scripts Holding Co.* | 17,926 | 1,358,791 |
| HCA Holdings, Inc.* | 8,529 | 656,818 |
| Henry Schein, Inc.* | 2,307 | 407,878 |
| Humana, Inc. | 4,259 | 766,109 |
| Laboratory Corp. of America Holdings* | 2,943 | 383,385 |
Shares |
Value ($) | |
| McKesson Corp. | 6,403 | 1,195,120 |
| Patterson Companies, Inc. | 2,431 | 116,421 |
| Quest Diagnostics, Inc. | 3,977 | 323,767 |
| UnitedHealth Group, Inc. | 27,029 | 3,816,495 |
| Universal Health Services, Inc. "B" | 2,540 | 340,614 |
| 14,350,640 | ||
| Health Care Technology 0.1% | ||
| Cerner Corp.* | 8,573 | 502,378 |
| Life Sciences Tools & Services 0.6% | ||
| Agilent Technologies, Inc. | 9,238 | 409,797 |
| Illumina, Inc.* (a) | 4,165 | 584,683 |
| PerkinElmer, Inc. | 3,098 | 162,397 |
| Thermo Fisher Scientific, Inc. | 11,172 | 1,650,775 |
| Waters Corp.* | 2,277 | 320,260 |
| 3,127,912 | ||
| Pharmaceuticals 5.7% | ||
| Allergan PLC* | 11,250 | 2,599,762 |
| Bristol-Myers Squibb Co. | 47,481 | 3,492,228 |
| Eli Lilly & Co. | 27,570 | 2,171,137 |
| Endo International PLC* | 5,837 | 90,999 |
| Johnson & Johnson | 78,236 | 9,490,027 |
| Mallinckrodt PLC* (a) | 3,065 | 186,291 |
| Merck & Co., Inc. | 78,777 | 4,538,343 |
| Mylan NV* | 12,156 | 525,625 |
| Perrigo Co. PLC (a) | 4,022 | 364,675 |
| Pfizer, Inc. | 172,487 | 6,073,267 |
| Zoetis, Inc. | 12,962 | 615,177 |
| 30,147,531 | ||
| Industrials 10.0% | ||
| Aerospace & Defense 2.6% | ||
| Boeing Co. | 17,027 | 2,211,296 |
| General Dynamics Corp. | 8,178 | 1,138,705 |
| Honeywell International, Inc. | 21,658 | 2,519,258 |
| L-3 Communications Holdings, Inc. | 2,171 | 318,464 |
| Lockheed Martin Corp. | 7,449 | 1,848,618 |
| Northrop Grumman Corp. | 5,135 | 1,141,408 |
| Raytheon Co. | 8,479 | 1,152,720 |
| Rockwell Collins, Inc. | 3,684 | 313,656 |
| Textron, Inc. | 7,585 | 277,308 |
| TransDigm Group, Inc.* | 1,523 | 401,600 |
| United Technologies Corp. | 22,137 | 2,270,149 |
| 13,593,182 | ||
| Air Freight & Logistics 0.7% | ||
| C.H. Robinson Worldwide, Inc. | 4,011 | 297,817 |
| Expeditors International of Washington, Inc. (a) | 5,214 | 255,694 |
| FedEx Corp. | 7,105 | 1,078,397 |
| United Parcel Service, Inc. "B" | 19,654 | 2,117,129 |
| 3,749,037 | ||
| Airlines 0.5% | ||
| Alaska Air Group, Inc. (a) | 3,532 | 205,880 |
| American Airlines Group, Inc. (a) | 16,420 | 464,850 |
| Delta Air Lines, Inc. | 22,076 | 804,229 |
| Southwest Airlines Co. | 18,088 | 709,231 |
| United Continental Holdings, Inc.* | 9,502 | 389,962 |
| 2,574,152 | ||
| Building Products 0.1% | ||
| Allegion PLC | 2,663 | 184,892 |
| Fortune Brands Home & Security, Inc. | 4,360 | 252,749 |
| Masco Corp. | 9,321 | 288,392 |
| 726,033 | ||
Shares |
Value ($) | |
| Commercial Services & Supplies 0.4% | ||
| Cintas Corp. (a) | 2,489 | 244,246 |
| Pitney Bowes, Inc. | 5,488 | 97,686 |
| Republic Services, Inc. | 6,707 | 344,136 |
| Stericycle, Inc.* | 2,458 | 255,927 |
| Tyco International PLC | 12,008 | 511,541 |
| Waste Management, Inc. | 11,744 | 778,275 |
| 2,231,811 | ||
| Construction & Engineering 0.1% | ||
| Fluor Corp. | 3,925 | 193,424 |
| Jacobs Engineering Group, Inc.* | 3,539 | 176,278 |
| Quanta Services, Inc.* | 4,221 | 97,589 |
| 467,291 | ||
| Electrical Equipment 0.5% | ||
| Acuity Brands, Inc. | 1,263 | 313,174 |
| AMETEK, Inc. | 6,604 | 305,303 |
| Eaton Corp. PLC | 13,007 | 776,908 |
| Emerson Electric Co. | 18,234 | 951,085 |
| Rockwell Automation, Inc. (a) | 3,709 | 425,867 |
| 2,772,337 | ||
| Industrial Conglomerates 2.6% | ||
| 3M Co. | 17,267 | 3,023,797 |
| Danaher Corp. | 17,076 | 1,724,676 |
| General Electric Co. (a) | 261,412 | 8,229,250 |
| Roper Technologies, Inc. | 2,867 | 488,995 |
| 13,466,718 | ||
| Machinery 1.2% | ||
| Caterpillar, Inc. (a) | 16,651 | 1,262,312 |
| Cummins, Inc. (a) | 4,504 | 506,430 |
| Deere & Co. (a) | 8,482 | 687,381 |
| Dover Corp. | 4,429 | 307,018 |
| Flowserve Corp. (a) | 3,711 | 167,626 |
| Illinois Tool Works, Inc. | 9,178 | 955,981 |
| Ingersoll-Rand PLC | 7,278 | 463,463 |
| PACCAR, Inc. (a) | 9,953 | 516,262 |
| Parker-Hannifin Corp. | 3,831 | 413,940 |
| Pentair PLC | 5,180 | 301,942 |
| Snap-on, Inc. | 1,686 | 266,085 |
| Stanley Black & Decker, Inc. | 4,227 | 470,127 |
| Xylem, Inc. | 5,082 | 226,911 |
| 6,545,478 | ||
| Professional Services 0.3% | ||
| Dun & Bradstreet Corp. | 1,023 | 124,642 |
| Equifax, Inc. | 3,350 | 430,140 |
| Nielsen Holdings PLC | 10,255 | 532,953 |
| Robert Half International, Inc. | 3,730 | 142,337 |
| Verisk Analytics, Inc.* | 4,340 | 351,887 |
| 1,581,959 | ||
| Road & Rail 0.8% | ||
| CSX Corp. | 27,269 | 711,176 |
| J.B. Hunt Transport Services, Inc. | 2,539 | 205,481 |
| Kansas City Southern | 3,030 | 272,973 |
| Norfolk Southern Corp. | 8,445 | 718,923 |
| Ryder System, Inc. (a) | 1,566 | 95,745 |
| Union Pacific Corp. | 23,853 | 2,081,174 |
| 4,085,472 | ||
| Trading Companies & Distributors 0.2% | ||
| Fastenal Co. (a) | 8,125 | 360,669 |
| United Rentals, Inc.* | 2,489 | 167,012 |
| W.W. Grainger, Inc. (a) | 1,600 | 363,600 |
| 891,281 | ||
Shares |
Value ($) | |
| Information Technology 19.4% | ||
| Communications Equipment 1.0% | ||
| Cisco Systems, Inc. | 143,033 | 4,103,617 |
| F5 Networks, Inc.* | 1,899 | 216,182 |
| Harris Corp. | 3,542 | 295,545 |
| Juniper Networks, Inc. | 9,914 | 222,966 |
| Motorola Solutions, Inc. | 4,451 | 293,632 |
| 5,131,942 | ||
| Electronic Equipment, Instruments & Components 0.4% | ||
| Amphenol Corp. "A" | 8,734 | 500,720 |
| Corning, Inc. | 30,681 | 628,347 |
| FLIR Systems, Inc. | 3,838 | 118,786 |
| TE Connectivity Ltd. | 10,224 | 583,893 |
| 1,831,746 | ||
| Internet Software & Services 4.0% | ||
| Akamai Technologies, Inc.* (a) | 5,031 | 281,384 |
| Alphabet, Inc. "A"* | 8,349 | 5,873,772 |
| Alphabet, Inc. "C"* | 8,397 | 5,811,564 |
| eBay, Inc.* | 30,076 | 704,079 |
| Facebook, Inc. "A"* | 65,729 | 7,511,510 |
| VeriSign, Inc.* (a) | 2,757 | 238,370 |
| Yahoo!, Inc.* | 24,941 | 936,784 |
| 21,357,463 | ||
| IT Services 3.6% | ||
| Accenture PLC "A" | 17,702 | 2,005,460 |
| Alliance Data Systems Corp.* | 1,662 | 325,619 |
| Automatic Data Processing, Inc. | 12,975 | 1,192,013 |
| Cognizant Technology Solutions Corp. "A"* | 17,257 | 987,791 |
| CSRA, Inc. | 4,064 | 95,219 |
| Fidelity National Information Services, Inc. | 7,825 | 576,546 |
| Fiserv, Inc.* | 6,335 | 688,804 |
| Global Payments, Inc. | 4,448 | 317,498 |
| International Business Machines Corp. | 25,113 | 3,811,651 |
| MasterCard, Inc. "A" | 27,618 | 2,432,041 |
| Paychex, Inc. | 9,088 | 540,736 |
| PayPal Holdings, Inc.* | 31,237 | 1,140,463 |
| Teradata Corp.* | 3,610 | 90,503 |
| Total System Services, Inc. | 4,839 | 256,999 |
| Visa, Inc. "A" (a) | 54,169 | 4,017,715 |
| Western Union Co. (a) | 14,001 | 268,539 |
| Xerox Corp. | 27,142 | 257,578 |
| 19,005,175 | ||
| Semiconductors & Semiconductor Equipment 2.8% | ||
| Analog Devices, Inc. | 8,794 | 498,092 |
| Applied Materials, Inc. | 30,942 | 741,680 |
| Broadcom Ltd. | 10,570 | 1,642,578 |
| First Solar, Inc.* | 2,209 | 107,092 |
| Intel Corp. | 134,210 | 4,402,088 |
| KLA-Tencor Corp. | 4,458 | 326,548 |
| Lam Research Corp. (a) | 4,469 | 375,664 |
| Linear Technology Corp. | 6,713 | 312,356 |
| Microchip Technology, Inc. (a) | 6,149 | 312,123 |
| Micron Technology, Inc.* | 29,850 | 410,736 |
| NVIDIA Corp. (a) | 14,475 | 680,470 |
| Qorvo, Inc.* | 3,643 | 201,312 |
| QUALCOMM, Inc. | 41,766 | 2,237,405 |
| Skyworks Solutions, Inc. (a) | 5,385 | 340,763 |
| Texas Instruments, Inc. | 28,528 | 1,787,279 |
| Xilinx, Inc. | 7,159 | 330,245 |
| 14,706,431 | ||
Shares |
Value ($) | |
| Software 4.1% | ||
| Activision Blizzard, Inc. | 14,356 | 568,928 |
| Adobe Systems, Inc.* | 14,224 | 1,362,517 |
| Autodesk, Inc.* | 6,338 | 343,139 |
| CA, Inc. | 8,566 | 281,222 |
| Citrix Systems, Inc.* | 4,444 | 355,920 |
| Electronic Arts, Inc.* | 8,581 | 650,097 |
| Intuit, Inc. | 7,279 | 812,409 |
| Microsoft Corp. | 223,490 | 11,435,983 |
| Oracle Corp. | 88,523 | 3,623,246 |
| Red Hat, Inc.* | 5,138 | 373,019 |
| salesforce.com, Inc.* | 18,113 | 1,438,353 |
| Symantec Corp. | 17,536 | 360,190 |
| 21,605,023 | ||
| Technology Hardware, Storage & Peripherals 3.5% | ||
| Apple, Inc. | 155,725 | 14,887,310 |
| EMC Corp. (a) | 55,477 | 1,507,310 |
| Hewlett Packard Enterprise Co. | 47,229 | 862,874 |
| HP, Inc. | 48,863 | 613,231 |
| NetApp, Inc. | 8,349 | 205,302 |
| Seagate Technology PLC | 8,484 | 206,670 |
| Western Digital Corp. | 8,043 | 380,112 |
| 18,662,809 | ||
| Materials 2.8% | ||
| Chemicals 2.0% | ||
| Air Products & Chemicals, Inc. | 5,503 | 781,646 |
| Albemarle Corp. | 3,193 | 253,237 |
| CF Industries Holdings, Inc. | 6,520 | 157,132 |
| Dow Chemical Co. | 31,966 | 1,589,030 |
| E.I. du Pont de Nemours & Co. | 24,868 | 1,611,446 |
| Eastman Chemical Co. | 4,294 | 291,562 |
| Ecolab, Inc. (a) | 7,554 | 895,904 |
| FMC Corp. | 3,904 | 180,794 |
| International Flavors & Fragrances, Inc. (a) | 2,280 | 287,440 |
| LyondellBasell Industries NV "A" | 9,667 | 719,418 |
| Monsanto Co. | 12,382 | 1,280,423 |
| PPG Industries, Inc. | 7,568 | 788,207 |
| Praxair, Inc. | 8,079 | 907,999 |
| The Mosaic Co. | 9,804 | 256,669 |
| The Sherwin-Williams Co. | 2,225 | 653,416 |
| 10,654,323 | ||
| Construction Materials 0.2% | ||
| Martin Marietta Materials, Inc. | 1,802 | 345,984 |
| Vulcan Materials Co. | 3,756 | 452,072 |
| 798,056 | ||
| Containers & Packaging 0.3% | ||
| Avery Dennison Corp. | 2,496 | 186,576 |
| Ball Corp. (a) | 4,944 | 357,402 |
| International Paper Co. | 11,597 | 491,481 |
| Owens-Illinois, Inc.* | 4,653 | 83,801 |
| Sealed Air Corp. | 5,653 | 259,868 |
| WestRock Co. | 7,273 | 282,701 |
| 1,661,829 | ||
| Metals & Mining 0.3% | ||
| Alcoa, Inc. (a) | 37,933 | 351,639 |
| Freeport-McMoRan, Inc. (a) | 35,278 | 392,997 |
| Newmont Mining Corp. | 14,987 | 586,291 |
| Nucor Corp. | 8,982 | 443,801 |
| 1,774,728 | ||
Shares |
Value ($) | |
| Telecommunication Services 2.9% | ||
| Diversified Telecommunication Services | ||
| AT&T, Inc. | 175,143 | 7,567,929 |
| CenturyLink, Inc. (a) | 15,374 | 446,000 |
| Frontier Communications Corp. (a) | 32,823 | 162,146 |
| Level 3 Communications, Inc.* | 8,166 | 420,467 |
| Verizon Communications, Inc. | 115,952 | 6,474,760 |
| 15,071,302 | ||
| Utilities 3.6% | ||
| Electric Utilities 2.2% | ||
| Alliant Energy Corp. | 6,458 | 256,383 |
| American Electric Power Co., Inc. | 13,927 | 976,143 |
| Duke Energy Corp. | 19,621 | 1,683,286 |
| Edison International | 9,238 | 717,515 |
| Entergy Corp. | 5,040 | 410,004 |
| Eversource Energy | 8,989 | 538,441 |
| Exelon Corp. | 26,355 | 958,268 |
| FirstEnergy Corp. | 11,959 | 417,489 |
| NextEra Energy, Inc. | 13,133 | 1,712,543 |
| PG&E Corp. | 14,137 | 903,637 |
| Pinnacle West Capital Corp. | 3,238 | 262,472 |
| PPL Corp. | 19,373 | 731,331 |
| Southern Co. | 26,691 | 1,431,438 |
| Xcel Energy, Inc. | 14,400 | 644,832 |
| 11,643,782 | ||
| Gas Utilities 0.0% | ||
| AGL Resources, Inc. | 3,430 | 226,277 |
| Independent Power & Renewable Eletricity Producers 0.1% | ||
| AES Corp. (a) | 18,485 | 230,693 |
| NRG Energy, Inc. | 9,273 | 139,002 |
| 369,695 | ||
| Multi-Utilities 1.2% | ||
| Ameren Corp. | 6,804 | 364,558 |
| CenterPoint Energy, Inc. | 12,335 | 296,040 |
| CMS Energy Corp. | 8,016 | 367,614 |
| Consolidated Edison, Inc. | 8,689 | 698,943 |
| Dominion Resources, Inc. (a) | 17,532 | 1,366,269 |
| DTE Energy Co. | 5,076 | 503,133 |
Shares |
Value ($) | |
| NiSource, Inc. | 9,033 | 239,555 |
| Public Service Enterprise Group, Inc. | 14,377 | 670,112 |
| SCANA Corp. | 4,061 | 307,255 |
| Sempra Energy | 6,775 | 772,486 |
| TECO Energy, Inc. | 6,552 | 181,097 |
| WEC Energy Group, Inc. (a) | 8,927 | 582,934 |
| 6,349,996 | ||
| Water Utilities 0.1% | ||
| American Water Works Co., Inc. | 5,037 | 425,677 |
| Total Common Stocks (Cost $310,155,006) | 517,818,811 | |
| Principal Amount ($) | Value ($) | |
| Government & Agency Obligation 0.1% | ||
| U.S. Treasury Obligation | ||
| U.S. Treasury Bill, 0.3%**, 9/15/2016 (b) (Cost $584,630) | 585,000 | 584,749 |
Shares |
Value ($) | |
| Securities Lending Collateral 7.8% | ||
| Daily Assets Fund "Capital Shares", 0.51% (c) (d) (Cost $41,459,685) | 41,459,685 | 41,459,685 |
| Cash Equivalents 2.0% | ||
| Deutsche Central Cash Management Government Fund, 0.44% (c) (Cost $10,430,304) | 10,430,304 | 10,430,304 |
| % of Net Assets | Value ($) | |
| Total Investment Portfolio (Cost $362,629,625)† | 107.9 | 570,293,549 |
| Other Assets and Liabilities, Net | (7.9) | (41,707,432) |
| Net Assets | 100.0 | 528,586,117 |
* Non-income producing security.
** Annualized yield at time of purchase; not a coupon rate.
† The cost for federal income tax purposes was $374,411,412. At June 30, 2016, net unrealized appreciation for all securities based on tax cost was $195,882,137. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $219,955,002 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $24,072,865.
(a) All or a portion of these securities were on loan. In addition, "Other Assets and Liabilities, Net" may include pending sales that are also on loan. The value of securities loaned at June 30, 2016 amounted to $41,015,198, which is 7.8% of net assets.
(b) At June 30, 2016, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.
(c) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.
(d) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.
REIT: Real Estate Investment Trust
At June 30, 2016, open futures contracts purchased were as follows:
| Futures | Currency | Expiration Date | Contracts | Notional Value ($) | Unrealized Appreciation ($) |
| S&P 500 E-Mini Index | USD | 9/16/2016 | 110 | 11,496,100 | 22,292 |
| Currency Abbreviation |
| USD United States Dollar |
For information on the Fund's policy and additional disclosures regarding futures contracts, please refer to Note B in the accompanying Notes to Financial Statements.
Fair Value Measurements
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of June 30, 2016 in valuing the Fund's investments.
| Assets | Level 1 | Level 2 | Level 3 | Total |
| Common Stocks (e) | $ 517,818,811 | $ — | $ — | $ 517,818,811 |
| Government & Agency Obligations | — | 584,749 | — | 584,749 |
| Short-Term Investments (e) | 51,889,989 | — | — | 51,889,989 |
|
Derivatives (f) Futures Contracts |
22,292 | — | — | 22,292 |
| Total | $ 569,731,092 | $ 584,749 | $ — | $ 570,315,841 |
There have been no transfers between fair value measurement levels during the period ended June 30, 2016.
(e) See Investment Portfolio for additional detailed categorizations.
(f) Derivatives include unrealized appreciation (depreciation) on open futures contracts.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities
| as of June 30, 2016 (Unaudited) | |
| Assets | |
|
Investments: Investments in non-affiliated securities, at value (cost $310,739,636) — including $41,015,198 of securities loaned |
$ 518,403,560 |
| Investment in Daily Assets Fund (cost $41,459,685)* | 41,459,685 |
| Investment in Deutsche Central Cash Management Government Fund (cost $10,430,304) | 10,430,304 |
| Total investments in securities, at value (cost $362,629,625) | 570,293,549 |
| Cash | 12,918 |
| Receivable for Fund shares sold | 21,589 |
| Dividends receivable | 581,778 |
| Interest receivable | 8,278 |
| Receivable for variation margin on futures contracts | 130,366 |
| Foreign taxes recoverable | 2,157 |
| Other assets | 3,922 |
| Total assets | $ 571,054,557 |
| Liabilities | |
| Payable upon return of securities loaned | 41,459,685 |
| Payable for investments purchased | 603,748 |
| Payable for Fund shares redeemed | 155,347 |
| Accrued management fee | 79,542 |
| Accrued Trustees' fees | 1,292 |
| Other accrued expenses and payables | 168,826 |
| Total liabilities | 42,468,440 |
| Net assets, at value | $ 528,586,117 |
| Net Assets Consist of | |
| Undistributed net investment income | 4,985,338 |
|
Net unrealized appreciation (depreciation) on: Investments |
207,663,924 |
| Futures | 22,292 |
| Accumulated net realized gain (loss) | 14,779,736 |
| Paid-in capital | 301,134,827 |
| Net assets, at value | $ 528,586,117 |
|
Class A Net Asset Value, offering and redemption price per share ($498,414,809 ÷ 27,400,300 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized) |
$ 18.19 |
|
Class B Net Asset Value, offering and redemption price per share ($14,033,471 ÷ 770,564 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized) |
$ 18.21 |
|
Class B2 Net Asset Value, offering and redemption price per share ($16,137,837 ÷ 885,824 outstanding shares of beneficial interest, $.001 par value, unlimited number of shares authorized) |
$ 18.22 |
* Represents collateral on securities loaned.
The accompanying notes are an integral part of the financial statements.
Statement of Operations
| for the six months ended June 30, 2016 (Unaudited) | |
| Investment Income | |
|
Income: Dividends (net of foreign taxes withheld of $1,323) |
$ 5,923,693 |
| Interest | 531 |
| Income distributions — Deutsche Central Cash Management Government Fund | 11,070 |
| Securities lending income, including income from Daily Assets Fund, net of borrower rebates | 28,570 |
| Total income | 5,963,864 |
|
Expenses: Management fee |
520,844 |
| Administration fee | 260,422 |
| Services to shareholders | 2,486 |
| Record keeping fee (Class B and Class B2) | 18,075 |
| Distribution service fees (Class B and Class B2) | 36,333 |
| Custodian fee | 20,272 |
| Professional fees | 37,856 |
| Reports to shareholders | 26,838 |
| Trustees' fees and expenses | 13,503 |
| Other | 20,816 |
| Total expenses before expense reductions | 957,445 |
| Expense reductions | (47,945) |
| Total expenses after expense reductions | 909,500 |
| Net investment income (loss) | 5,054,364 |
| Realized and Unrealized Gain (Loss) | |
|
Net realized gain (loss) from: Investments |
25,543,001 |
| Futures | 1,153,862 |
| 26,696,863 | |
|
Change in net unrealized appreciation (depreciation) on: Investments |
(13,737,651) |
| Futures | 28,702 |
| (13,708,949) | |
| Net gain (loss) | 12,987,914 |
| Net increase (decrease) in net assets resulting from operations | $ 18,042,278 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets
| Increase (Decrease) in Net Assets | Six Months Ended June 30, 2016 (Unaudited) | Year Ended December 31, 2015 | |
|
Operations: Net investment income (loss) |
$ 5,054,364 | $ 10,807,749 | |
| Net realized gain (loss) | 26,696,863 | 40,935,822 | |
| Change in net unrealized appreciation (depreciation) | (13,708,949) | (44,867,654) | |
| Net increase (decrease) in net assets resulting from operations | 18,042,278 | 6,875,917 | |
|
Distributions to shareholders from: Net investment income: Class A |
(10,160,013) | (9,872,144) | |
| Class B | (239,707) | (139,339) | |
| Class B2 | (284,387) | (233,490) | |
|
Net realized gains: Class A |
(37,893,356) | (27,498,227) | |
| Class B | (1,020,192) | (461,402) | |
| Class B2 | (1,283,529) | (836,657) | |
| Total distributions | (50,881,184) | (39,041,259) | |
|
Fund share transactions: Class A Proceeds from shares sold |
7,235,126 | 24,313,549 | |
| Reinvestment of distributions | 48,053,369 | 37,370,371 | |
| Cost of shares redeemed | (56,142,534) | (111,171,237) | |
| Net increase (decrease) in net assets from Class A share transactions | (854,039) | (49,487,317) | |
|
Class B Proceeds from shares sold |
1,754,429 | 6,669,770 | |
| Reinvestment of distributions | 1,259,899 | 600,741 | |
| Cost of shares redeemed | (538,896) | (1,280,491) | |
| Net increase (decrease) in net assets from Class B share transactions | 2,475,432 | 5,990,020 | |
|
Class B2 Proceeds from shares sold |
175,722 | 675,159 | |
| Reinvestment of distributions | 1,567,916 | 1,070,147 | |
| Cost of shares redeemed | (1,600,899) | (2,843,635) | |
| Net increase (decrease) in net assets from Class B2 share transactions | 142,739 | (1,098,329) | |
| Increase (decrease) in net assets | (31,074,774) | (76,760,968) | |
| Net assets at beginning of period | 559,660,891 | 636,421,859 | |
| Net assets at end of period (including undistributed net investment income of $4,985,338 and $10,615,081, respectively) | $ 528,586,117 | $ 559,660,891 |
The accompanying notes are an integral part of the financial statements.
| Other Information | Six Months Ended June 30, 2016 (Unaudited) | Year Ended December 31, 2015 | |
|
Class A Shares outstanding at beginning of period |
27,337,468 | 29,911,141 | |
| Shares sold | 389,253 | 1,225,463 | |
| Shares issued to shareholders in reinvestment of distributions | 2,660,762 | 1,892,171 | |
| Shares redeemed | (2,987,183) | (5,691,307) | |
| Net increase (decrease) in Class A shares | 62,832 | (2,573,673) | |
| Shares outstanding at end of period | 27,400,300 | 27,337,468 | |
|
Class B Shares outstanding at beginning of period |
634,704 | 337,768 | |
| Shares sold | 95,307 | 331,792 | |
| Shares issued to shareholders in reinvestment of distributions | 69,646 | 30,371 | |
| Shares redeemed | (29,093) | (65,227) | |
| Net increase (decrease) in Class B shares | 135,860 | 296,936 | |
| Shares outstanding at end of period | 770,564 | 634,704 | |
|
Class B2 Shares outstanding at beginning of period |
877,722 | 933,560 | |
| Shares sold | 9,574 | 33,269 | |
| Shares issued to shareholders in reinvestment of distributions | 86,625 | 54,075 | |
| Shares redeemed | (88,097) | (143,182) | |
| Net increase (decrease) in Class B2 shares | 8,102 | (55,838) | |
| Shares outstanding at end of period | 885,824 | 877,722 |
The accompanying notes are an integral part of the financial statements.
Financial Highlights
| Class A | Six Months Ended 6/30/16 (Unaudited) | Years Ended December 31, | |||||
| 2015 | 2014 | 2013 | 2012 | 2011 | |||
| Selected Per Share Data | |||||||
| Net asset value, beginning of period | $ 19.40 | $ 20.41 | $ 19.01 | $ 15.01 | $ 13.20 | $ 13.17 | |
|
Income (loss) from investment operations: Net investment income (loss)a |
.18 | .35 | .33 | .30 | .28 | .23 | |
| Net realized and unrealized gain (loss) | .52 | (.10) | 2.10 | 4.37 | 1.78 | .03 | |
| Total from investment operations | .70 | .25 | 2.43 | 4.67 | 2.06 | .26 | |
|
Less distributions from: Net investment income |
(.40) | (.33) | (.37) | (.31) | (.25) | (.23) | |
| Net realized gains | (1.51) | (.93) | (.66) | (.36) | — | — | |
| Total distributions | (1.91) | (1.26) | (1.03) | (.67) | (.25) | (.23) | |
| Net asset value, end of period | $ 18.19 | $ 19.40 | $ 20.41 | $ 19.01 | $ 15.01 | $ 13.20 | |
| Total Return (%) | 3.69b** | 1.13b | 13.39b | 31.93b | 15.70 | 1.83 | |
| Ratios to Average Net Assets and Supplemental Data | |||||||
| Net assets, end of period ($ millions) | 498 | 530 | 610 | 600 | 668 | 632 | |
| Ratio of expenses before expense reductions (%) | .35* | .34 | .34 | .34 | .35 | .33 | |
| Ratio of expenses after expense reductions (%) | .33* | .33 | .33 | .34 | .35 | .33 | |
| Ratio of net investment income (loss) (%) | 1.96* | 1.77 | 1.70 | 1.76 | 1.95 | 1.74 | |
| Portfolio turnover rate (%) | 2** | 3 | 3 | 4c | 4 | 6 | |
|
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Excludes portfolio securities delivered as a result of processing redemption in-kind transactions. * Annualized ** Not annualized | |||||||
| Class B | Six Months Ended 6/30/16 (Unaudited) | Years Ended December 31, | |||||
| 2015 | 2014 | 2013 | 2012 | 2011 | |||
| Selected Per Share Data | |||||||
| Net asset value, beginning of period | $ 19.40 | $ 20.40 | $ 19.01 | $ 15.00 | $ 13.19 | $ 13.17 | |
|
Income (loss) from investment operations: Net investment income (loss)a |
.16 | .30 | .28 | .34 | .25 | .20 | |
| Net realized and unrealized gain (loss) | .51 | (.09) | 2.09 | 4.29 | 1.78 | .01 | |
| Total from investment operations | .67 | .21 | 2.37 | 4.63 | 2.03 | .21 | |
|
Less distributions from: Net investment income |
(.35) | (.28) | (.32) | (.26) | (.22) | (.19) | |
| Net realized gains | (1.51) | (.93) | (.66) | (.36) | — | — | |
| Total distributions | (1.86) | (1.21) | (.98) | (.62) | (.22) | (.19) | |
| Net asset value, end of period | $ 18.21 | $ 19.40 | $ 20.40 | $ 19.01 | $ 15.00 | $ 13.19 | |
| Total Return (%) | 3.53b** | .92b | 13.05b | 31.68b | 15.42 | 1.50 | |
| Ratios to Average Net Assets and Supplemental Data | |||||||
| Net assets, end of period ($ millions) | 14 | 12 | 7 | 5 | 47 | 45 | |
| Ratio of expenses before expense reductions (%) | .69* | .67 | .62 | .59 | .60 | .58 | |
| Ratio of expenses after expense reductions (%) | .60* | .58 | .58 | .58 | .60 | .58 | |
| Ratio of net investment income (loss) (%) | 1.69* | 1.53 | 1.45 | 2.11 | 1.70 | 1.49 | |
| Portfolio turnover rate (%) | 2** | 3 | 3 | 4c | 4 | 6 | |
|
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Excludes portfolio securities delivered as a result of processing redemption in-kind transactions. * Annualized ** Not annualized | |||||||
| Class B2 | Six Months Ended 6/30/16 (Unaudited) | Years Ended December 31, | |||||
| 2015 | 2014 | 2013 | 2012 | 2011 | |||
| Selected Per Share Data | |||||||
| Net asset value, beginning of period | $ 19.39 | $ 20.40 | $ 18.99 | $ 14.99 | $ 13.18 | $ 13.15 | |
|
Income (loss) from investment operations: Net investment income (loss)a |
.15 | .28 | .27 | .23 | .22 | .18 | |
| Net realized and unrealized gain (loss) | .52 | (.10) | 2.09 | 4.37 | 1.78 | .02 | |
| Total from investment operations | .67 | .18 | 2.36 | 4.60 | 2.00 | .20 | |
|
Less distributions from: Net investment income |
(.33) | (.26) | (.29) | (.24) | (.19) | (.17) | |
| Net realized gains | (1.51) | (.93) | (.66) | (.36) | — | — | |
| Total distributions | (1.84) | (1.19) | (.95) | (.60) | (.19) | (.17) | |
| Net asset value, end of period | $ 18.22 | $ 19.39 | $ 20.40 | $ 18.99 | $ 14.99 | $ 13.18 | |
| Total Return (%) | 3.53b** | .76b | 13.00b | 31.44b | 15.26b | 1.43 | |
| Ratios to Average Net Assets and Supplemental Data | |||||||
| Net assets, end of period ($ millions) | 16 | 17 | 19 | 20 | 19 | 18 | |
| Ratio of expenses before expense reductions (%) | .75* | .74 | .74 | .74 | .75 | .73 | |
| Ratio of expenses after expense reductions (%) | .70* | .68 | .68 | .72 | .74 | .73 | |
| Ratio of net investment income (loss) (%) | 1.59* | 1.42 | 1.35 | 1.39 | 1.55 | 1.34 | |
| Portfolio turnover rate (%) | 2** | 3 | 3 | 4c | 4 | 6 | |
|
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c Excludes portfolio securities delivered as a result of processing redemption in-kind transactions. * Annualized ** Not annualized | |||||||
Notes to Financial Statements (Unaudited)
A. Organization and Significant Accounting Policies
Deutsche Investments VIT Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. Deutsche Equity 500 Index VIP (the "Fund") is a diversified series of the Trust offered to investors. The Fund is an underlying investment vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of certain life insurance companies ("Participating Insurance Companies").
Multiple Classes of Shares of Beneficial Interest. The Fund offers three classes of shares to investors: Class A shares, Class B shares and Class B2 shares. Class B and Class B2 shares are subject to Rule 12b-1 distribution fees under the 1940 Act equal to an annual rate of 0.25% of Class B and Class B2 shares average daily net assets. In addition, Class B and Class B2 shares are subject to record keeping fees equal to an annual rate up to 0.15% of average daily net assets. Class A shares are not subject to such fees.
Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class (including the applicable 12b-1 distribution fees and record keeping fees). Differences in class-level expenses may result in payment of different per share dividends by class. All shares have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
Equity securities are valued at the most recent sale price or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation. Equity securities are generally categorized as Level 1.
Debt securities are valued at prices supplied by independent pricing services approved by the Fund's Board. If the pricing services are unable to provide valuations, securities are valued at the most recent bid quotation or evaluated price, as applicable, obtained from one or more broker-dealers. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. These securities are generally categorized as Level 2.
Investments in open-end investment companies are valued at their net asset value each business day and are categorized as Level 1.
Futures contracts are generally valued at the settlement prices established each day on the exchange on which they are traded and are categorized as Level 1.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Fund's valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security's disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company's or issuer's financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.
Disclosure about the classification of fair value measurements is included in a table following the Fund's Investment Portfolio.
Securities Lending. Deutsche Bank AG, as lending agent, lends securities of the Fund to certain financial institutions under the terms of the Security Lending Agreement. The Fund retains benefits of owning the securities it has loaned and continues to receive interest and dividends generated by the securities and to participate in any changes in their market value. The Fund requires the borrowers of the securities to maintain collateral with the Fund consisting of either cash or liquid, unencumbered assets having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the security lending agreement. As of period end, any securities on loan were collateralized by cash. The Fund may invest the cash collateral into a joint trading account in an affiliated money market fund. During the six months ended June 30, 2016, the Fund invested the cash collateral in Daily Assets Fund, an affiliated money market fund managed by Deutsche Investment Management Americas Inc. Deutsche Investment Management Americas Inc. receives a management/administration fee (0.08% annualized effective rate as of June 30, 2016) on the cash collateral invested in Daily Assets Fund. The Fund receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan at any time, and the borrower, after notice, is required to return borrowed securities within a standard time period. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. If the Fund is not able to recover securities lent, the Fund may sell the collateral and purchase a replacement investment in the market, incurring the risk that the value of the replacement security is greater than the value of the collateral. The Fund is also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.
As of June 30, 2016, the Fund had securities on loan, which were classified as common stock in the Investment Portfolio. The value of the related collateral exceeded the value of the securities loaned at period end.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable income to its shareholders.
The Fund has reviewed the tax positions for the open tax years as of December 31, 2015 and has determined that no provision for income tax and/or uncertain tax provisions is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income and Gains. Net investment income of the Fund, if any, is declared and distributed to shareholders annually. 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 shareholders at least annually. The Fund may also make additional distributions for tax purposes if necessary.
The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to investments in futures contracts and certain securities sold at a loss. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
The tax character of current year distributions will be determined at the end of the current fiscal year.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Expenses. Expenses of the Trust arising in connection with a specific fund are allocated to that fund. Other Trust expenses which cannot be directly attributed to a fund are apportioned among the funds in the Trust based upon the relative net assets or other appropriate measures.
Real Estate Investment Trusts. The Fund periodically recharacterizes distributions received from a Real Estate Investment Trust ("REIT") investment based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available timely from a REIT, the recharacterization will be estimated for financial statement purposes and a recharacterization will be made within the accounting records in the following year when such information becomes available. Distributions received from REITs in excess of income are recorded as either a reduction of cost of investments or realized gains.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset valuation calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Realized gains and losses from investment transactions are recorded on an identified cost basis. Proceeds from litigation payments, if any, are included in net realized gain (loss) from investments.
B. Derivative Instruments
A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). For the six months ended June 30, 2016, the Fund invested in futures to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the stock market.
Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary cash or securities ("initial margin") in an amount equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Fund dependent upon the daily fluctuations in the value and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. Gains or losses are realized when the contract expires or is closed. Since all futures contracts are exchange traded, counterparty risk is minimized as the exchange's clearinghouse acts as the counterparty, and guarantees the futures against default. Upon a futures contract close out or expiration, realized gain or loss is recognized.
Certain risks may arise upon entering into futures contracts, including the risk that an illiquid market will limit the Fund's ability to close out a futures contract prior to the settlement date and the risk that the futures contract is not well correlated with the security, index or currency to which it relates. Risk of loss may exceed amounts disclosed in the Statement of Assets and Liabilities.
A summary of the open futures contracts as of June 30, 2016 is included in a table following the Fund's Investment Portfolio. For the six months ended June 30, 2016, the investment in futures contracts purchased had a total notional value generally indicative of a range from approximately $3,155,000 to $11,496,000.
The following tables summarize the value of the Fund's derivative instruments held as of June 30, 2016 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:
| Asset Derivative | Futures Contracts |
| Equity Contracts (a) | $ 22,292 |
|
The above derivative is located in the following Statement of Assets and Liabilities account: (a) Includes cumulative appreciation of futures contracts as disclosed in the Investment Portfolio. Unsettled variation margin is disclosed separately within the Statement of Assets and Liabilities. | |
Additionally, the amount of unrealized and realized gains and losses on derivative instruments recognized in Fund earnings during the six months ended June 30, 2016 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk exposure:
| Realized Gain (Loss) | Futures Contracts |
| Equity Contracts (a) | $ 1,153,862 |
|
The above derivative is located in the following Statement of Operations account: (a) Net realized gain (loss) from futures | |
| Change in Net Unrealized Appreciation (Depreciation) | Futures Contracts |
| Equity Contracts (a) | $ 28,702 |
|
The above derivative is located in the following Statement of Operations account: (a) Change in net unrealized appreciation (depreciation) on futures | |
C. Purchases and Sales of Securities
During the six months ended June 30, 2016, purchases and sales of investment securities (excluding short-term investments) aggregated $11,911,182 and $61,142,704, respectively.
D. Related Parties
Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold, or entered into by the Fund or delegates such responsibility to the Fund's subadvisor. Northern Trust Investments, Inc. ("NTI") serves as subadvisor. As a subadvisor to the Fund, NTI makes investment decisions and buys and sells securities for the Fund. NTI is paid by the Advisor for the services NTI provides to the Fund.
Pursuant to the Investment Management Agreement with the Advisor, the Fund pays the Advisor an annual fee based on its average daily net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $1 billion of the Fund's average daily net assets | .200% |
| Next $1 billion of such net assets | .175% |
| Over $2 billion of such net assets | .150% |
Accordingly, for the six months ended June 30, 2016, the fee pursuant to the Investment Management Agreement was equivalent to an annualized rate (exclusive of any applicable waivers/reimbursements) of 0.20% of the Fund's average daily net assets.
For the period from January 1, 2016 through April 30, 2016, the Advisor had contractually agreed to waive all or a portion of its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the total annual operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of each class as follows:
| Class A | .33% |
| Class B | .58% |
| Class B2 | .68% |
Effective May 1, 2016 through April 30, 2017, the Advisor has contractually agreed to waive all or a portion of its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the total annual operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of each class as follows:
| Class A | .33% |
| Class B | .62% |
| Class B2 | .72% |
For the six months ended June 30, 2016, fees waived and/or expenses reimbursed for each class are as follows:
| Class A | $ 37,743 |
| Class B | 6,111 |
| Class B2 | 4,091 |
| $ 47,945 |
Administration Fee. Pursuant to the Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays DIMA an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the six months ended June 30, 2016, the Administration Fee was $260,422, of which $43,180 is unpaid.
Distribution Service Agreement. Deutsche AM Distributors, Inc. ("DDI"), an affiliate of the Advisor, is the Fund's distributor. In accordance with the Distribution Plan, DDI receives 12b-1 fees of 0.25% of average daily net assets of Class B and B2 shares. For the six months ended June 30, 2016, the Distribution Service Fees were as follows:
| Distribution Service Fees | Total Aggregated | Unpaid at June 30, 2016 |
| Class B | $ 15,996 | $ 2,856 |
| Class B2 | 20,337 | 3,387 |
| $ 36,333 | $ 6,243 |
Service Provider Fees. Deutsche AM Service Company ("DSC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent of the Fund. Pursuant to a sub-transfer agency agreement among DSC and DST Systems, Inc. ("DST"), DSC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DSC compensates DST out of the shareholder servicing fee they receive from the Fund. For the six months ended June 30, 2016, the amounts charged to the Fund by DSC were as follows:
| Services to Shareholders | Total Aggregated | Unpaid at June 30, 2016 |
| Class A | $ 233 | $ 116 |
| Class B | 40 | 19 |
| Class B2 | 29 | 15 |
| $ 302 | $ 150 |
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the six months ended June 30, 2016, the amount charged to the Fund by DIMA included in the Statement of Operations under "Reports to shareholders" aggregated $8,953, all of which is unpaid.
Trustees' Fees and Expenses. The Fund paid retainer fees to each Trustee not affiliated with the Advisor, plus specified amounts to the Board Chairperson and Vice Chairperson and to each committee Chairperson.
Affiliated Cash Management Vehicles. The Fund may invest uninvested cash balances in Deutsche Central Cash Management Government Fund and Deutsche Variable NAV Money Fund, affiliated money market funds which are managed by the Advisor. Each affiliated money market fund is managed in accordance with Rule 2a-7 under the 1940 Act, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. Deutsche Central Cash Management Government Fund seeks to maintain a stable net asset value, and Deutsche Variable NAV Money Fund maintains a floating net asset value. The Fund indirectly bears its proportionate share of the expenses of each affiliated money market fund in which it invests. Deutsche Central Cash Management Government Fund does not pay the Advisor an investment management fee. To the extent that Deutsche Variable NAV Money Fund pays an investment management fee to the Advisor, the Advisor will waive an amount of the investment management fee payable to the Advisor by the Fund equal to the amount of the investment management fee payable on the Fund's assets invested in Deutsche Variable NAV Money Fund.
Securities Lending Agent Fees. Deutsche Bank AG serves as securities lending agent for the Fund. For the six months ended June 30, 2016, the Fund incurred securities lending agent fees to Deutsche Bank AG in the amount of $2,517.
E. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $400 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if the one-month LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at June 30, 2016.
F. Ownership of the Fund
At June 30, 2016, two participating insurance companies were beneficial owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 51% and 17%, respectively. At June 30, 2016, two participating insurance companies were beneficial owners of record of 10% or more of the total outstanding Class B shares of the Fund, owning 68% and 19%. At June 30, 2016, one participating insurance company was a beneficial owner of record of 95% of the total outstanding Class B2 shares of the Fund.
Information About Your Fund's Expenses (Unaudited)
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include contract charges, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (January 1, 2016 to June 30, 2016).
The tables illustrate your Fund's expenses in two ways:
— Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
— Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical Fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
| Expenses and Value of a $1,000 Investment for the six months ended June 30, 2016 | |||||
| Actual Fund Return | Class A | Class B | Class B2 | ||
| Beginning Account Value 1/1/16 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | ||
| Ending Account Value 6/30/16 | $ 1,036.90 | $ 1,035.30 | $ 1,035.30 | ||
| Expenses Paid per $1,000* | $ 1.67 | $ 3.04 | $ 3.54 | ||
| Hypothetical 5% Fund Return | Class A | Class B | Class B2 | ||
| Beginning Account Value 1/1/16 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | ||
| Ending Account Value 6/30/16 | $ 1,023.22 | $ 1,021.88 | $ 1,021.38 | ||
| Expenses Paid per $1,000* | $ 1.66 | $ 3.02 | $ 3.52 | ||
* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by 182 (the number of days in the most recent six-month period), then divided by 366.
| Annualized Expense Ratios | Class A | Class B | Class B2 | ||
| Deutsche Equity 500 Index VIP | .33% | .60% | .70% |
For more information, please refer to the Fund's prospectus.
These tables do not reflect charges and fees ("contract charges") associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option.
For an analysis of the fees associated with an investment in the fund or similar funds, please refer to the current and hypothetical expense calculators for Variable Insurance Products which can be found at deutschefunds.com/EN/resources/calculators.jsp.
Proxy Voting
The Fund's policies and procedures for voting proxies for portfolio securities and information about how the Fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — deutschefunds.com (click on "proxy voting" at the bottom of the page) — or on the SEC's Web site — sec.gov. To obtain a written copy of the Fund's policies and procedures without charge, upon request, call us toll free at (800) 728-3337.
Advisory Agreement Board Considerations and Fee Evaluation
The Board of Trustees approved the renewal of Deutsche Equity 500 Index VIP’s investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA") and sub-advisory agreement (the "Sub-Advisory Agreement" and together with the Agreement, the "Agreements") between DIMA and Northern Trust Investments, Inc. ("NTI") in September 2015.
In terms of the process that the Board followed prior to approving the Agreements, shareholders should know that:
— In September 2015, all of the Fund’s Trustees were independent of DIMA and its affiliates.
— The Trustees met frequently during the past year to discuss fund matters and dedicated a substantial amount of time to contract review matters. Over the course of several months, the Board’s Contract Committee reviewed comprehensive materials received from DIMA, independent third parties and independent counsel. These materials included an analysis of the Fund’s performance, fees and expenses, and profitability from a fee consultant retained by the Fund’s Independent Trustees (the "Fee Consultant"). The Board also received extensive information throughout the year regarding performance of the Fund.
— The Independent Trustees regularly meet privately with counsel to discuss contract review and other matters. In addition, the Independent Trustees were advised by the Fee Consultant in the course of their review of the Fund’s contractual arrangements and considered a comprehensive report prepared by the Fee Consultant in connection with their deliberations.
— In connection with reviewing the Agreements, the Board also reviewed the terms of the Fund’s Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.
— Based on its evaluation of the information provided, the Contract Committee presented its findings and recommendations to the Board. The Board then reviewed the Contract Committee’s findings and recommendations.
In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DIMA and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DIMA managed the Fund, and that the Agreement was approved by the Fund’s shareholders. DIMA is part of Deutsche Bank AG’s ("Deutsche Bank") Asset and Wealth Management ("Deutsche AWM") division. Deutsche AWM is a global asset management business that offers a wide range of investing expertise and resources, including research capabilities in many countries throughout the world. Deutsche Bank has advised the Independent Trustees that the U.S. asset management business continues to be a critical and integral part of Deutsche Bank, and that Deutsche Bank will continue to make significant investments in Deutsche AWM, including ongoing enhancements to Deutsche AWM’s investment platform. Deutsche Bank also has confirmed its commitment to maintaining strong legal and compliance groups within the Deutsche AWM division.
As part of the contract review process, the Board carefully considered the fees and expenses of each Deutsche fund overseen by the Board in light of the fund’s performance. In many cases, this led to the negotiation and implementation of expense caps. As part of these negotiations, the Board indicated that it would consider relaxing these caps in future years following sustained improvements in performance, among other considerations.
While shareholders may focus primarily on fund performance and fees, the Fund’s Board considers these and many other factors, including the quality and integrity of DIMA’s and NTI’s personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.
Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DIMA and NTI provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DIMA provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DIMA to attract and retain high-quality personnel, and the organizational depth and stability of DIMA. The Board also requested and received information regarding DIMA’s oversight of Fund sub-advisers, including NTI. The Board reviewed the Fund’s performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market index(es) and a peer universe compiled using information supplied by Morningstar Direct ("Morningstar"), an independent fund data service. The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to a peer universe), and receives additional reporting from DIMA regarding such funds and, where appropriate, DIMA’s plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2014, the Fund’s performance (Class A shares) was in the 1st quartile, 2nd quartile, and 2nd quartile, respectively, of the applicable Morningstar universe (the 1st quartile being the best performers and the 4th quartile being the worst performers).
Fees and Expenses. The Board considered the Fund’s investment management fee schedule, sub-advisory fee schedule, operating expenses and total expense ratios, and comparative information provided by Lipper Inc. ("Lipper") and the Fee Consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include a 0.10% fee paid to DIMA under the Fund’s administrative services agreement, were higher than the median (3rd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2014). With respect to the sub-advisory fee paid to NTI, the Board noted that the fee is paid by DIMA out of its fee and not directly by the Fund. The Board noted that the Fund’s Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2014, and analyzing Lipper expense universe Class A (net) expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class’s total (net) operating expenses to the applicable Lipper Universe Expenses. The Board noted that the expense limitations agreed to by DIMA were expected to help the Fund’s total (net) operating expenses remain competitive. The Board considered the Fund’s management fee rate as compared to fees charged by DIMA to comparable Deutsche U.S. registered funds ("Deutsche Funds") and considered differences between the Fund and the comparable Deutsche Funds. The information requested by the Board as part of its review of fees and expenses also included information about institutional accounts (including any sub-advised funds and accounts) and funds offered primarily to European investors ("Deutsche Europe funds") managed by Deutsche AWM. The Board noted that DIMA indicated that Deutsche AWM does not manage any institutional accounts or Deutsche Europe funds comparable to the Fund.
On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DIMA and NTI.
Profitability. The Board reviewed detailed information regarding revenues received by DIMA under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DIMA from advising the Deutsche Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DIMA and its affiliates with respect to all fund services in totality and by fund. The Board and the Fee Consultant reviewed DIMA’s methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DIMA in connection with the management of the Fund were not unreasonable. The Board also reviewed certain publicly available information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DIMA and its affiliates’ overall profitability with respect to the Deutsche Funds (after taking into account distribution and other services provided to the funds by DIMA and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available. The Board did not consider the profitability of NTI with respect to the Fund. The Board noted that DIMA pays NTI’s fee out of its management fee, and its understanding that the Fund’s sub-advisory fee schedule was the product of an arm’s length negotiation with DIMA.
Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund’s investment management fee schedule includes fee breakpoints. The Board concluded that the Fund’s fee schedule represents an appropriate sharing between the Fund and DIMA of such economies of scale as may exist in the management of the Fund at current asset levels.
Other Benefits to DIMA and NTI and Their Affiliates. The Board also considered the character and amount of other incidental benefits received by DIMA and NTI and their affiliates, including any fees received by DIMA for administrative services provided to the Fund and any fees received by an affiliate of DIMA for distribution services. The Board also considered benefits to DIMA and NTI related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DIMA and NTI related to Deutsche Funds advertising and cross-selling opportunities among DIMA products and services. The Board considered these benefits in reaching its conclusion that the Fund’s management fees were reasonable.
Compliance. The Board considered the significant attention and resources dedicated by DIMA to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of the individual serving as DIMA’s and the Fund’s chief compliance officer; (ii) the large number of DIMA compliance personnel; and (iii) the substantial commitment of resources by DIMA and its affiliates to compliance matters. The Board also considered the attention and resources dedicated by DIMA to the oversight of the investment sub-advisor’s compliance program and compliance with the applicable fund policies and procedures.
Based on all of the information considered and the conclusions reached, the Board unanimously determined that the continuation of the Agreements is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreements.
vit-equ500-3 (R-028371-5 8/16)
| ITEM 2. | CODE OF ETHICS | |
| Not applicable. | ||
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT | |
| Not applicable | ||
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | |
| Not applicable | ||
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS | |
| Not applicable | ||
| ITEM 6. | SCHEDULE OF INVESTMENTS | |
| Not applicable | ||
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES | |
| Not applicable | ||
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES | |
| Not applicable | ||
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS | |
| Not applicable | ||
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | |
| There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board. The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Kenneth C. Froewiss, Independent Chairman, Deutsche Mutual Funds, P.O. Box 390601, Cambridge, MA 02139. | ||
| ITEM 11. | CONTROLS AND PROCEDURES | |
| (a) | The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. | |
| (b) | There have been no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. | |
ITEM 12. |
EXHIBITS | |
| (a)(1) | Not applicable | |
| (a)(2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. | |
| (b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Registrant: | Deutsche Equity 500 Index VIP, a series of Deutsche Investments VIT Funds |
| By: |
/s/Brian E. Binder Brian E. Binder President |
| Date: | 8/22/2016 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: |
/s/Brian E. Binder Brian E. Binder President |
| Date: | 8/22/2016 |
| By: |
/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer |
| Date: | 8/22/2016 |