0000088053-10-000524.txt : 20110408
0000088053-10-000524.hdr.sgml : 20110408
20100423173257
ACCESSION NUMBER: 0000088053-10-000524
CONFORMED SUBMISSION TYPE: 485APOS
PUBLIC DOCUMENT COUNT: 5
FILED AS OF DATE: 20100426
DATE AS OF CHANGE: 20100430
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: DWS ADVISOR FUNDS
CENTRAL INDEX KEY: 0000797657
IRS NUMBER: 000000000
STATE OF INCORPORATION: MA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 485APOS
SEC ACT: 1933 Act
SEC FILE NUMBER: 033-07404
FILM NUMBER: 10768232
BUSINESS ADDRESS:
STREET 1: 345 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10154-0004
BUSINESS PHONE: 212-454-6778
MAIL ADDRESS:
STREET 1: 345 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10154-0004
FORMER COMPANY:
FORMER CONFORMED NAME: SCUDDER ADVISOR FUNDS
DATE OF NAME CHANGE: 20030519
FORMER COMPANY:
FORMER CONFORMED NAME: BT INVESTMENT FUNDS
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: BT TAX FREE INVESTMENT TRUST
DATE OF NAME CHANGE: 19880530
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: DWS ADVISOR FUNDS
CENTRAL INDEX KEY: 0000797657
IRS NUMBER: 000000000
STATE OF INCORPORATION: MA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 485APOS
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-04760
FILM NUMBER: 10768233
BUSINESS ADDRESS:
STREET 1: 345 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10154-0004
BUSINESS PHONE: 212-454-6778
MAIL ADDRESS:
STREET 1: 345 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10154-0004
FORMER COMPANY:
FORMER CONFORMED NAME: SCUDDER ADVISOR FUNDS
DATE OF NAME CHANGE: 20030519
FORMER COMPANY:
FORMER CONFORMED NAME: BT INVESTMENT FUNDS
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: BT TAX FREE INVESTMENT TRUST
DATE OF NAME CHANGE: 19880530
0000797657
S000005730
NY Tax Free Money Fund
C000015736
Investment Class
BNYXX
C000035515
Tax-Exempt New York Money Market Fund Class
0000797657
S000005732
Tax Free Money Fund Investment
C000015745
Premier Shares
BTXXX
C000070982
Institutional Shares
0000797657
S000012353
DWS RREEF Global Real Estate Securities Fund
C000033584
Class A
C000033585
Class C
C000033586
Class S
C000033587
Institutional Class
0000797657
S000012431
DWS RREEF Real Estate Securities Fund
C000033741
Class A
C000033742
Class B
C000033743
Class C
C000033744
Class R
C000033745
Class S
C000033746
Institutional Class
485APOS
1
na050110af.txt
485A FILING - DWS ADVISOR FUNDS
As filed with the Securities and Exchange Commission on April 23, 2010
1933 Act File No. 33-07404
1940 Act File No. 811-04760
===============================================================================
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 176 [X]
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 176 [X]
DWS ADVISOR FUNDS
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue, New York, NY 10154
(Address of Principal Executive Offices)
(617) 295-2572
(Registrant's Telephone Number)
John Millette, Vice President and Secretary
One Beacon Street
Boston, MA 02108
(Name and Address of Agent for Service)
Copy to:
Cathy G. O'Kelly, Esq.
David A. Sturms, Esq.
Vedder Price P.C.
222 North LaSalle Street
Chicago, IL 60601
It is proposed that this filing will become effective (check appropriate box):
|___| immediately upon filing pursuant to paragraph (b) of Rule 485
|___| on __________ pursuant to paragraph (b) of Rule 485
|___| 60 days after filing pursuant to paragraph (a)(1) of Rule 485(a)
|___| on __________ pursuant to paragraph (a)(1) of Rule 485
|___| 75 days after filing pursuant to paragraph (a)(2) of Rule 485
|___| on ___________ pursuant to paragraph (a)(2) of Rule 485
|_X_| Pursuant to paragraph (a) (3) of Rule 485
If appropriate, check the following box:
|___| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
EXPLANATORY NOTE
----------------
This post-effective amendment contains the prospectuses and Statements of
Additional Information relating to the following series of the registrant:
o DWS RREEF Real Estate Securities Fund - Class A, Class B, Class C,
Class R, Class S and Institutional Class
o DWS RREEF Global Real Estate Securities Fund - Class A, Class C,
Class S and Institutional Class
o Tax Free Money Fund Investment -- Institutional Shares and Premier
Shares
o NY Tax Free Money Fund - Investment Class and Tax-Exempt New York
Money Market Fund
This post-effective amendment is not intended to update or amend any other
prospectuses or Statements of Additional Information.
2
[GRAPHIC APPEARS HERE]
PROSPECTUS
MAY 1, 2010
DWS Communications Fund
CLASS/TICKER A TISHX B FTEBX C FTICX INST FLICX
...............................................................................
DWS RREEF Real Estate Securities Fund
CLASS/TICKER A RRRAX B RRRBX C RRRCX R RRRSX INST RRRRX S RRREX
(Class B shares are closed to new investment)
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
TABLE OF CONTENTS
DWS COMMUNICATIONS FUND
Investment Objective............................... 1
Fees and Expenses of the Fund...................... 1
Principal Investment Strategy...................... 1
Main Risks......................................... 2
Past Performance................................... 3
Management......................................... 3
Purchase and Sale of Fund Shares................... 4
Tax Information.................................... 4
Payments to Broker-Dealers and
Other Financial Intermediaries..................... 4
DWS RREEF REAL ESTATE SECURITIES
FUND
Investment Objective............................... 5
Fees and Expenses of the Fund...................... 5
Principal Investment Strategy...................... 6
Main Risks......................................... 6
Past Performance................................... 7
Management......................................... 7
Purchase and Sale of Fund Shares................... 8
Tax Information.................................... 8
Payments to Broker-Dealers and
Other Financial Intermediaries..................... 8
FUND DETAILS
Other Policies and Risks........................... 9
Who Manages and Oversees the Funds................. 10
Management......................................... 11
INVESTING IN THE FUNDS
Choosing a Share Class............................. 12
Buying, Exchanging and Selling Shares.............. 16
How to Buy Shares.................................. 16
How to Exchange Shares............................. 17
How to Sell Shares................................. 18
How to Buy, Sell and Exchange Class R Shares....... 18
Financial Intermediary Support Payments............ 19
Policies You Should Know About..................... 20
Policies About Transactions........................ 20
How each Fund Calculates Share Price............... 24
Other Rights We Reserve............................ 24
Understanding Distributions and Taxes.............. 25
FINANCIAL HIGHLIGHTS............................... 27
APPENDIX........................................... 36
Hypothetical Expense Summary....................... 36
Additional Index Information....................... 41
-------------------------------------------------------------------------------
YOUR INVESTMENT IN A FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY,
ENTITY OR PERSON.
-------------------------------------------------------------------------------
[DWS INVESTMENTS LOGO]
Deutsche Bank Group
DWS COMMUNICATIONS FUND
INVESTMENT OBJECTIVE
The fund seeks to maximize total return.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares. You may qualify
for sales charge discounts if you and your immediate family invest, or agree to
invest in the future, at least $50,000 in DWS funds. More information about
these and other discounts is available from your financial professional and in
Choosing a Share Class (p. 12) and Purchase and Redemption of Shares in the
fund's Statement of Additional Information (SAI) (p. II-10).
SHAREHOLDER FEES (paid directly from your investment)
A B C INST
------------ --------- --------- ---------
Maximum sales charge (load) on purchases,
as % of offering price 5.75 None None None
------------------------------------------- ---- -- -- --
Maximum contingent deferred sales charge
(load), as % of redemption proceeds None(1) 4.00 1.00 None
------------------------------------------- -------- ---- ---- --
Redemption/exchange fee on shares owned
less than 15 days, as % of redemption pro-
ceeds 2.00 2.00 2.00 2.00
------------------------------------------- -------- ---- ---- ----
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a % of the
value of your investment)
A B C INST
--------- --------- --------- ----------
Management fee 0.99 0.99 0.99 0.99
------------------------------------------- ---- ---- ---- ----
Distribution/service
(12b-1) fees 0.22 0.96 0.98 None
------------------------------------------- ---- ---- ---- -----
Other expenses (includes an administrative
fee) 0.84 1.30 1.03 0.53
------------------------------------------- ---- ---- ---- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 2.05 3.25 3.00 1.52
------------------------------------------- ---- ---- ---- -----
(1) Investments of $1 million or more may be eligible to buy Class A shares
without a sales charge (load), but may be subject to a contingent
deferred sales charge of 1.00% if redeemed within 12 months of purchase
and 0.50% if redeemed within the following six months.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
YEARS A B C INST
------- -------- -------- -------- --------
1 $ 771 $ 728 $ 403 $ 155
-- ----- ----- ----- -----
3 1,181 1,301 927 480
-- ----- ----- ----- -----
5 1,615 1,898 1,577 829
-- ----- ----- ----- -----
10 2,817 3,020 3,318 1,813
-- ----- ----- ----- -----
You would pay the following expenses if you did not redeem your shares:
YEARS A B C INST
------- -------- -------- -------- --------
1 $ 771 $ 328 $ 303 $ 155
-- ----- ----- ----- -----
3 1,181 1,001 927 480
-- ----- ----- ----- -----
5 1,615 1,698 1,577 829
-- ----- ----- ----- -----
10 2,817 3,020 3,318 1,813
-- ----- ----- ----- -----
Class B converts to Class A after six years; the Example for Class B reflects
Class A fees after the conversion.
PORTFOLIO TURNOVER
The fund pays transaction costs when it buys and sells securities (or "turns
over" its portfolio). A higher portfolio turnover may indicate higher
transaction costs and may mean higher taxes if you are investing in a taxable
account. These costs are not reflected in annual fund operating expenses or in
the expense example, but are reflected in fund performance.
Portfolio turnover rate for fiscal year 2009: 148%.
PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal circumstances, the fund invests at least 80% of
net assets, plus the amount of any borrowings for investment purposes (measured
at the time of investment), in securities of companies in the communications
field. The fund normally focuses on the
1
PROSPECTUS May 1, 2010 DWS Communications Fund
securities of US and foreign companies that are engaged in the research,
development, manufacture or sale of communications services, technology,
equipment or products.
The fund invests in common stocks as well as dividend and interest paying
securities of companies in the communications field. The fund may also invest
in convertible securities (both preferred stocks and bonds), bonds and
short-term cash equivalents. The fund may invest without limit in stocks and
other securities of companies not publicly traded in the United States,
including securities of emerging markets.
MANAGEMENT PROCESS. The fund seeks to achieve its objective through a
combination of long-term growth of capital and, to a lesser extent, current
income. In choosing securities, portfolio management emphasizes investments in
companies offering products, services and enabling technologies in a wide
spectrum from traditional communications to newer data-centric communications
like the Internet and corporate networks. Examples of such companies include
traditional telecommunication carriers as well as companies who provide
sophisticated equipment and services for a modern communications
infrastructure, including access devices like smartphones. Portfolio management
believes that worldwide telecommunications market expansion will create
opportunities for both established and emerging providers of telecommunications
products and services.
--------------------------------------------------------------------------------
DERIVATIVES. The fund may use various types of derivatives (contracts whose
value is based on, for example, indices, currencies or securities) for hedging,
risk management or non-hedging purposes to seek to enhance potential gains. The
fund may use derivatives as a substitute for direct investment in a particular
asset class or to keep cash on hand to meet shareholder redemptions or other
needs. In particular, the fund may use futures and options. To the extent the
fund invests in foreign securities, the fund may enter into forward currency
exchange contracts and buy and sell currency options to hedge against currency
exchange rate fluctuations.
SECURITIES LENDING. The fund may lend securities (up to one-third of total
assets) to approved institutions.
--------------------------------------------------------------------------------
MAIN RISKS
There are several risk factors that could hurt the fund's performance, cause
you to lose money or cause the fund's performance to trail that of other
investments.
STOCK MARKET RISK. When stock prices fall, you should expect the value of your
investment to fall as well. Stock prices can be hurt by poor management on the
part of the stock's issuer, shrinking product demand and other business risks.
These may affect single companies as well as groups of companies. In addition,
movements in financial markets may adversely affect a stock's price, regardless
of how well the company performs.
CONCENTRATION RISK - COMMUNICATIONS COMPANIES. Any fund that concentrates in a
particular segment of the market will generally be more volatile than a fund
that invests more broadly. Any market price movements, regulatory or
technological changes, or economic conditions affecting communications
companies in this field will have a significant impact on the fund's
performance.
NON-DIVERSIFICATION RISK. The fund is classified as non-diversified under the
Investment Company Act of 1940, as amended. This means that the fund may invest
in securities of relatively few issuers. Thus, the performance of one or a
small number of portfolio holdings can affect overall performance.
FOREIGN INVESTMENT RISK. To the extent the fund invests in companies based
outside the US, it faces the risks inherent in foreign investing. Adverse
political, economic or social developments could undermine the value of the
fund's investments or prevent the fund from realizing their full value.
Financial reporting standards for companies based in foreign markets differ
from those in the US. Additionally, foreign securities markets generally are
smaller and less liquid than US markets. To the extent that the fund invests in
non-US dollar denominated foreign securities, changes in currency exchange
rates may affect the US dollar value of foreign securities or the income or
gain received on these securities. Foreign governments may restrict investment
by foreigners, limit withdrawal of trading profit or currency from the country,
restrict currency exchange or seize foreign investments. The investments of the
fund may also be subject to foreign withholding taxes. Foreign transactions and
custody of assets may involve delays in payment, delivery or recovery of money
or investments. Foreign investment risks are greater in emerging markets than
in developed markets. Emerging market investments are often considered
speculative. Emerging market countries typically have economic and political
systems that are less developed, and can be expected to be less stable than
developed markets. For example, the economies of such countries can be subject
to rapid and unpredictable rates of inflation or deflation.
DERIVATIVES RISK. Risks associated with derivatives include the risk that the
derivative is not well correlated with the security, index or currency to which
it relates; the risk that derivatives may result in losses or missed
opportunities; the risk that the fund will be unable to sell the derivative
because of an illiquid secondary market; the risk that a counterparty is
unwilling or unable to meet its obligation; and the risk that the derivative
transaction could expose the fund to the effects of leverage, which could
increase the fund's exposure to the market and magnify potential losses. There
is no guarantee that derivatives, to the extent employed, will have the
intended effect, and their use could cause lower returns or even losses to the
fund. The use of derivatives by the fund to hedge risk may reduce the
opportunity for gain by offsetting the positive effect of favorable price
movements.
2
PROSPECTUS May 1, 2010 DWS Communications Fund
CREDIT RISK. A fund purchasing debt securities faces the risk that the
creditworthiness of an issuer may decline, causing the value of the debt
securities to decline. In addition, an issuer may not be able to make timely
payments on the interest and/or principal on the debt security it has issued.
Because the issuers of high-yield debt securities or junk bonds (debt
securities rated below the fourth highest category) may be in uncertain
financial health, the prices of their debt securities can be more vulnerable to
bad economic news or even the expectation of bad news, than investment-grade
debt securities. In some cases, debt securities, particularly high-yield debt
securities, may decline in credit quality or go into default. Because the fund
may invest in securities not paying current interest or in securities already
in default, these risks may be more pronounced.
PRICING RISK. If market conditions make it difficult to value some investments,
the fund may value these investments using more subjective methods, such as
fair value pricing. In such cases, the value determined for an investment could
be different than the value realized upon such investment's sale. As a result,
you could pay more than the market value when buying fund shares or receive
less than the market value when selling fund shares.
SECURITY SELECTION RISK. The securities in the fund's portfolio may decline in
value. Portfolio management could be wrong in its analysis of industries,
companies, economic trends, the relative attractiveness of different securities
or other matters.
SECURITIES LENDING RISK. Any decline in the value of a portfolio security that
occurs while the security is out on loan is borne by the fund, and will
adversely affect performance. Also, there may be delays in recovery of
securities loaned or even a loss of rights in the collateral should the
borrower of the securities fail financially while holding the security.
More information about fund risks, including additional risk factors not
discussed above, is included in Fund Details and the fund's SAI.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk; so
can comparing fund performance to overall market performance (as measured by an
appropriate market index). Past performance may not indicate future results.
All performance figures below assume that dividends were reinvested. For more
recent performance figures, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
CALENDAR YEAR TOTAL RETURNS (%) (Class A)
These year-by-year returns do not include sales charges, and would be lower if
they did. Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
-34.52 -29.54 -39.31 22.89 21.23 14.95 21.14 -0.51 -57.39 52.60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Best Quarter: 31.90% Q2 2009 Worst Quarter: -29.94%, Q2 2002
Year-to-Date as of March 31: 5.30%
AVERAGE ANNUAL TOTAL RETURNS
(For periods ended 12/31/2009 expressed as a %)
These returns include sales charges, if any. Indexes have no sales charges and
cannot be invested in directly. After-tax returns (which are shown only for
Class A and would be different for other classes) reflect the historical
highest individual federal income tax rates, but do not reflect any state or
local taxes. Your actual after-tax returns may be different. After-tax returns
are not relevant to shares held in an IRA, 401(k) or other tax-advantaged
investment plan. Performance of Class B shares does not assume the conversion
to Class A shares after six years.
CLASS 1 5 10
INCEPTION YEAR YEARS YEARS
----------- ---------- ---------- ----------
CLASS A before tax 1/18/84 43.83 -3.23 -9.86
------------------------- -------- ----- ------ -------
After tax on
distributions 43.83 -3.33 -10.06
After tax on distribu-
tions, with sale 29.38 -2.69 -7.60
------------------------- -------- ----- ------ -------
CLASS B before tax 1/3/95 48.48 -2.91 -10.03
------------------------- -------- ----- ------ -------
CLASS C before tax 10/28/98 51.42 -2.81 -10.07
------------------------- -------- ----- ------ -------
INST CLASS before tax 6/4/98 52.87 -1.82 -9.08
------------------------- -------- ----- ------ -------
MSCI WORLD INDEX 29.99 2.01 -0.24
------------------------- -------- ----- ------ -------
MSCI WORLD TELECOM
SERVICES INDEX 13.67 2.20 -6.50
------------------------- -------- ----- ------ -------
The Advisor believes the additional MSCI World Telecom Services Index
represents the fund's overall investment process.
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
PORTFOLIO MANAGER(S)
WALTER HOLICK, DIRECTOR. Lead Portfolio Manager of the fund. Joined the fund in
2010.
FREDERIC L. FAYOLLE, CFA, DIRECTOR. Portfolio Manager of the fund. Joined the
fund in 2010.
3
PROSPECTUS May 1, 2010 DWS Communications Fund
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT ($)
AUTOMATIC
UGMAS/ INVESTMENT
NON-IRA IRAS UTMAS PLANS
------------ ------ -------- -----------
A B C 1,000 500 1,000 500
------- ----- --- ----- ---
INST 1,000,000 N/A N/A N/A
------- --------- --- ----- ---
For participants in certain fee-based and wrap programs offered through certain
financial intermediaries approved by the Advisor there is no minimum initial
investment for Class A, B and C shares and no minimum additional investment for
Class A shares. Institutional Class shares also have no additional investment
minimum. The minimum additional investment for all other instances is $50. The
maximum Automatic Investment Plan investment is $250,000. For existing Class B
shareholders, the minimum initial investment for Class A and C shares is $50.
TO PLACE ORDERS
MAIL First Investment DWS Investments, PO Box 219356
Kansas City, MO 64121-9356
Additional Investments DWS Investments, PO Box 219154
Kansas City, MO 64121-9154
Exchanges and DWS Investments, PO Box 219557
Redemptions Kansas City, MO 64121-9557
EXPEDITED MAIL DWS Investments, 210 West 10th Street
Kansas City, MO 64105-1614
WEB SITE www.dws-investments.com
TELEPHONE Class A, B or C shares: (800) 621-1048
M - F 9 a.m. - 6 p.m. ET
Institutional Class shares: (800) 730-1313
M - F 8:30 a.m. - 6 p.m. ET
TDD LINE (800) 728-3006, M - F 9 a.m. - 6 p.m. ET
You can buy or sell shares of the fund on any business day at our web site, by
mail, or by telephone. The fund is generally open on days when the New York
Stock Exchange is open for regular trading.
Class B shares are closed to new purchases, except for exchanges and the
reinvestment of dividends or other distributions. Institutional Class shares
are generally available only to qualified institutions.
TAX INFORMATION
The fund's distributions (dividend and capital gains distributions are expected
to be paid annually) are generally taxable to you as ordinary income or capital
gains, except when your investment is in an IRA, 401(k), or other tax-deferred
investment plan.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
4
PROSPECTUS May 1, 2010 DWS Communications Fund
[DWS INVESTMENTS LOGO]
Deutsche Bank Group
DWS RREEF REAL ESTATE SECURITIES FUND
INVESTMENT OBJECTIVE
The fund's investment objective is long-term capital appreciation and current
income.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares. You may qualify
for sales charge discounts if you and your immediate family invest, or agree to
invest in the future, at least $50,000 in DWS funds. More information about
these and other discounts is available from your financial professional and in
Choosing a Share Class (p. 12) and Purchase and Redemption of Shares in the
fund's Statement of Additional Information (SAI) (p. II-10).
SHAREHOLDER FEES (paid directly from your investment)
A B C R INST S
------------ --------- --------- --------- --------- ---------
Maximum sales charge (load)
on purchases, as % of offer-
ing price 5.75 None None None None None
------------------------------ ---- -- -- -- -- --
Maximum contingent
deferred sales charge (load),
as % of redemption proceeds None(1) 4.00 1.00 None None None
------------------------------ -------- ---- ---- -- -- --
Redemption/exchange fee on
shares owned less than 15
days, as % of redemption
proceeds 2.00 2.00 2.00 2.00 2.00 2.00
------------------------------ -------- ---- ---- ---- ---- ----
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a % of the
value of your investment)
A B C R INST S
--------- --------- --------- --------- ---------- ----------
Management fee 0.41 0.41 0.41 0.41 0.41 0.41
---------------------------- ---- ---- ---- ---- ---- ----
Distribution/service
(12b-1) fees 0.22 1.00 1.00 0.50 None None
---------------------------- ---- ---- ---- ---- ----- -----
Other expenses (includes an
administrative fee) 0.41 0.59 0.49 0.43 0.22 0.39
---------------------------- ---- ---- ---- ---- ----- -----
TOTAL ANNUAL FUND OPERATING
EXPENSES 1.04 2.00 1.90 1.34 0.63 0.80
---------------------------- ---- ---- ---- ---- ----- -----
(1) Investments of $1 million or more may be eligible to buy Class A shares
without a sales charge (load), but may be subject to a contingent
deferred sales charge of 1.00% if redeemed within 12 months of purchase
and 0.50% if redeemed within the following six months.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
YEARS A B C R INST S
------- -------- -------- -------- -------- ------ ------
1 $ 675 $ 603 $ 293 $ 136 $64 $82
-- ----- ----- ----- ----- --- ---
3 887 927 597 425 202 255
-- ----- ----- ----- ----- --- ---
5 1,116 1,278 1,026 734 351 444
-- ----- ----- ----- ----- --- ---
10 1,773 1,851 2,222 1,613 786 990
-- ----- ----- ----- ----- --- ---
You would pay the following expenses if you did not redeem your shares:
YEARS A B C R INST S
------- -------- -------- -------- -------- ------ ------
1 $ 675 $ 203 $ 193 $ 136 $64 $82
-- ----- ----- ----- ----- --- ---
3 887 627 597 425 202 255
-- ----- ----- ----- ----- --- ---
5 1,116 1,078 1,026 734 351 444
-- ----- ----- ----- ----- --- ---
10 1,773 1,851 2,222 1,613 786 990
-- ----- ----- ----- ----- --- ---
Class B converts to Class A after six years; the Example for Class B reflects
Class A fees after the conversion.
PORTFOLIO TURNOVER
The fund pays transaction costs when it buys and sells securities (or "turns
over" its portfolio). A higher portfolio turnover may indicate higher
transaction costs and may mean higher taxes if you are investing in a taxable
account. These costs are not reflected in annual fund operating expenses or in
the expense example, but are reflected in fund performance.
Portfolio turnover rate for fiscal year 2009: 120%.
5
PROSPECTUS May 1, 2010 DWS RREEF Real Estate Securities Fund
PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal circumstances, the fund will invest at least 80%
of its net assets, plus the amount of any borrowing for investment purposes
(calculated at the time of any investment), in equity securities of real estate
investment trusts ("REITs") and real estate companies. A company is considered
to be a real estate company if, in the opinion of portfolio management, at
least 50% of its revenues or 50% of the market value of its assets at the time
of purchase are attributed to the ownership, construction, management or sale
of real estate.
The fund's equity investments are mainly common stocks, but may also include
other types of equities, such as preferred or convertible stocks.
The fund may also invest a portion of its assets in other types of securities.
These securities may include short-term securities, bonds, notes, securities of
companies not principally engaged in the real estate industry, non-leveraged
stock index futures contracts and other similar securities. Stock index futures
contracts, a type of derivative security, can help the fund's cash assets
remain liquid while performing more like stocks. The fund has a policy
governing stock index futures and other derivatives, which prohibits leverage
of the fund's assets by investing in a derivative security.
MANAGEMENT PROCESS. Portfolio management looks for real estate securities they
believe will provide superior returns over the long term, particularly
companies with the potential for stock price appreciation and a record of
paying dividends.
To find these issuers, portfolio management tracks economic conditions and real
estate market performance in major metropolitan areas and analyzes performance
of various property types within those regions. For this analysis, portfolio
management uses information from a nationwide network of real estate
professionals to evaluate the holdings of real estate companies and REITs.
Their analysis also considers the companies' management structures, financial
structures and business strategies. Lastly, portfolio management considers the
effect of the real estate securities markets in general when making investment
decisions.
The fund may invest in different types of REITS. So-called equity REITs buy
real estate and pay investors from the rents they receive and from any profits
on the sale of their properties. So-called mortgage REITs lend money to real
estate companies and pay investors from the interest they receive on those
loans. So-called hybrid REITs engage in both owning real estate and making
loans. While portfolio management expects that the fund's assets will be
invested primarily in equity REITs, in changing market conditions, the fund may
invest more significantly in other types of REITs.
The portfolio managers may choose to sell a security for a variety of reasons,
but typically will sell if they believe that one or more of the following is
true: the security is not fulfilling its investment purpose, it appears to have
reached its optimum valuation, or a particular company's condition or general
economic conditions have changed.
--------------------------------------------------------------------------------
SECURITIES LENDING. The fund may lend securities (up to one-third of total
assets) to approved institutions.
--------------------------------------------------------------------------------
MAIN RISKS
There are several risk factors that could hurt the fund's performance, cause
you to lose money or cause the fund's performance to trail that of other
investments.
STOCK MARKET RISK. When stock prices fall, you should expect the value of your
investment to fall as well. Stock prices can be hurt by poor management on the
part of the stock's issuer, shrinking product demand and other business risks.
These may affect single companies as well as groups of companies. In addition,
movements in financial markets may adversely affect a stock's price, regardless
of how well the company performs.
CONCENTRATION RISK - REAL ESTATE SECURITIES. Any fund that concentrates in a
particular segment of the market will generally be more volatile than a fund
that invests more broadly. Any market price movements, regulatory or
technological changes, or economic conditions affecting real estate securities,
including REITs, will have a significant impact on the fund's performance. In
particular, real estate companies can be affected by the risks associated with
direct ownership of real estate, such as general or local economic conditions,
increases in property taxes and operating expenses, liability or losses owing
to environmental problems, falling rents (whether owing to poor demand,
increased competition, overbuilding, or limitations on rents), zoning changes,
rising interest rates, and losses from casualty or condemnation. In addition,
many real estate companies, including REITs, utilize leverage (and some may be
highly leveraged), which increases investment risk. Further, REITs are
dependent upon management skills and may not be diversified.
NON-DIVERSIFICATION RISK. The fund is classified as non-diversified under the
Investment Company Act of 1940, as amended. This means that the fund may invest
in securities of relatively few issuers. Thus, the performance of one or a
small number of portfolio holdings can affect overall performance.
DERIVATIVES RISK. Risks associated with derivatives include the risk that the
derivative is not well correlated with the security, index or currency to which
it relates; the risk that derivatives may result in losses or missed
opportunities; the risk that the fund will be unable to sell the derivative
because of an illiquid secondary market; the risk that a counterparty is
unwilling or unable to meet its obligation; and the risk that the derivative
transaction could expose the fund to the effects of leverage, which could
increase
6
PROSPECTUS May 1, 2010 DWS RREEF Real Estate Securities Fund
the fund's exposure to the market and magnify potential losses. There is no
guarantee that derivatives, to the extent employed, will have the intended
effect, and their use could cause lower returns or even losses to the fund. The
use of derivatives by the fund to hedge risk may reduce the opportunity for
gain by offsetting the positive effect of favorable price movements.
SECURITY SELECTION RISK. The securities in the fund's portfolio may decline in
value. Portfolio management could be wrong in its analysis of industries,
companies, economic trends, the relative attractiveness of different securities
or other matters.
SECURITIES LENDING RISK. Any decline in the value of a portfolio security that
occurs while the security is out on loan is borne by the fund, and will
adversely affect performance. Also, there may be delays in recovery of
securities loaned or even a loss of rights in the collateral should the
borrower of the securities fail financially while holding the security.
More information about fund risks, including additional risk factors not
discussed above, is included in Fund Details and the fund's SAI.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk; so
can comparing fund performance to overall market performance (as measured by an
appropriate market index). Past performance may not indicate future results.
All performance figures below assume that dividends were reinvested. For more
recent performance figures, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
The performance data for the period prior to July 10, 2006, provided in the bar
chart and the average annual total returns table are those of the fund's
predecessor fund, DWS RREEF Real Estate Securities Fund, a series of DWS RREEF
Securities Trust (the "Predecessor Fund"). On July 10, 2006, the Predecessor
Fund transferred its assets and liabilities to the fund, which is a series of
DWS Advisor Funds.
In the table, the performance figures for each share class prior to its
inception date are based on the historical performance of the original share
class of the Predecessor Fund (Institutional Class), adjusted to reflect the
higher net expenses and applicable sales charges of the relevant share class.
CALENDAR YEAR TOTAL RETURNS (%) (Institutional Class)
These year-by-year returns do not include sales charges, and would be lower if
they did. Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
29.23 14.32 7.77 38.91 31.88 12.19 38.14 -15.50 -38.99 29.94
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Best Quarter: 32.22%, Q3 2009 Worst Quarter: -39.64%, Q4 2008
Year-to-Date as of March 31: 9.19%
AVERAGE ANNUAL TOTAL RETURNS
(For periods ended 12/31/2009 expressed as a %)
These returns include sales charges, if any. Indexes have no sales charges and
cannot be invested in directly. After-tax returns (which are shown only for
Institutional Class and would be different for other classes) reflect the
historical highest individual federal income tax rates, but do not reflect any
state or local taxes. Your actual after-tax returns may be different. After-tax
returns are not relevant to shares held in an IRA, 401(k) or other
tax-advantaged investment plan. Performance of Class B shares does not assume
the conversion to Class A shares after six years.
CLASS 1 5 10
INCEPTION YEAR YEARS YEARS
----------- ---------- ---------- ----------
CLASS A before tax 9/3/02 22.51 -0.75 10.71
------------------------- ------- ----- ------ -----
CLASS B before tax 9/3/02 26.31 -0.44 10.50
------------------------- ------- ----- ------ -----
CLASS C before tax 9/3/02 29.26 -0.27 10.55
------------------------- ------- ----- ------ -----
INST CLASS before tax 12/1/99 30.29 0.75 11.72
------------------------- ------- ----- ------ -----
After tax on
distributions 28.36 -1.31 9.14
After tax on distribu-
tions, with sale 19.23 0.04 9.14
------------------------- ------- ----- ------ -----
CLASS R before tax 10/1/03 29.74 0.24 11.14
------------------------- ------- ----- ------ -----
CLASS S before tax 5/2/05 30.34 0.63 11.48
------------------------- ------- ----- ------ -----
STANDARD & POOR'S 500
INDEX 26.46 0.42 -0.95
------------------------- ------- ----- ------ ------
MORGAN STANLEY US
REAL ESTATE
INVESTMENT TRUST (MSCI
US REIT)
INDEX 28.61 0.23 10.43
------------------------- ------- ----- ------ ------
The Advisor believes the additional MSCI US REIT Index represents the fund's
overall investment process.
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
SUBADVISOR
RREEF America L.L.C.
PORTFOLIO MANAGER(S)
JOHN W. VOJTICEK, MANAGING DIRECTOR. Co-Lead Portfolio Manager of the fund.
Joined the fund in 2004.
JERRY W. EHLINGER, CFA, MANAGING DIRECTOR. Co-Lead Portfolio Manager of the
fund. Joined the fund in 2004.
7
PROSPECTUS May 1, 2010 DWS RREEF Real Estate Securities Fund
JOHN F. ROBERTSON, CFA, MANAGING DIRECTOR. Portfolio Manager of the fund.
Joined the fund in 1999.
ASAD KAZIM, DIRECTOR. Portfolio Manager of the fund. Joined the fund in 2005.
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT ($)
AUTOMATIC
UGMAS/ INVESTMENT
NON-IRA IRAS UTMAS PLANS
----------------- -------------- -------- -------------------
A B C 1,000 500 1,000 500
------- ----- --- ----- ---
R None None None None
------- ----- ----- ----- ----
INST 1,000,000 N/A N/A N/A
------- --------- ----- ----- ----
S 2,500 1,000 1,000 1,000
------- --------- ----- ----- -----
For participants in certain fee-based and wrap programs offered through certain
financial intermediaries approved by the Advisor there is no minimum initial
investment for Class A, B and C shares and no minimum additional investment for
Class A shares. Institutional Class shares also have no additional investment
minimum. The minimum additional investment for all other instances is $50. The
maximum Automatic Investment Plan investment is $250,000. For existing Class B
shareholders, the minimum initial investment for Class A and C shares is $50.
TO PLACE ORDERS
MAIL First Investment DWS Investments, PO Box 219356
Kansas City, MO 64121-9356
Additional Investments DWS Investments, PO Box 219154
Kansas City, MO 64121-9154
Exchanges and DWS Investments, PO Box 219557
Redemptions Kansas City, MO 64121-9557
EXPEDITED MAIL DWS Investments, 210 West 10th Street
Kansas City, MO 64105-1614
WEB SITE www.dws-investments.com
TELEPHONE Class A, B, C or R shares: (800) 621-1048
Class S shares: (800) 728-3337
M - F 9 a.m. - 6 p.m. ET
Institutional Class shares: (800) 730-1313
M - F 8:30 a.m. - 6 p.m. ET
TDD LINE (800) 728-3006, M - F 9 a.m. - 6 p.m. ET
You can buy or sell shares of the fund on any business day at our web site, by
mail, or by telephone. The fund is generally open on days when the New York
Stock Exchange is open for regular trading.
Class B shares are closed to new purchases, except for exchanges and the
reinvestment of dividends or other distributions. Institutional Class shares
are generally available only to qualified institutions. Class R shares are
generally available only to certain retirement plans. Class S shares are
generally available only to existing Class S shareholders.
TAX INFORMATION
The fund's distributions (dividend distributions are expected to be paid
quarterly and capital gains distributions are expected to be paid annually) are
generally taxable to you as ordinary income or capital gains, except when your
investment is in an IRA, 401(k), or other tax-deferred investment plan.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
8
PROSPECTUS May 1, 2010 DWS RREEF Real Estate Securities Fund
FUND DETAILS
OTHER POLICIES AND RISKS
While the previous pages describe the main points of each fund's strategy and
risks, there are a few other matters to know about:
o Although major changes tend to be infrequent, each fund's Board could change
a fund's investment objective without seeking shareholder approval.
However, the Board will provide shareholders with at least 60 days' notice
prior to making any changes to each fund's 80% investment policy as
described herein.
o When in the Advisor's opinion it is advisable to adopt a temporary defensive
position because of unusual and adverse or other market conditions, up to
100% of each fund's assets may be held in cash or invested in money market
securities or other short-term investments. Short-term investments consist
of (1) foreign and domestic obligations of sovereign governments and their
agencies and instrumentalities, authorities and political subdivisions; (2)
other short-term high quality (for DWS RREEF Real Estate Securities Fund)
or investment-grade (for DWS Communications Fund) rated debt securities or,
if unrated, determined to be of comparable quality in the opinion of the
Advisor; (3) commercial paper; (4) bank obligations, including negotiable
certificates of deposit, time deposits and bankers' acceptances; and (5)
repurchase agreements. Short-term investments may also include shares of
money market mutual funds. This could prevent losses, but, while engaged in
a temporary defensive position, a fund will not be pursuing its investment
objective. However, portfolio management may choose not to use these
strategies for various reasons, even in volatile market conditions.
o Each fund may trade actively. This could raise transaction costs (thus
lowering return) and could mean increased taxable distributions to
shareholders and distributions that will be taxable to shareholders at
higher federal income tax rates.
o Certain DWS fund-of-funds are permitted to invest in each fund. As a result,
a fund may have large inflows or outflows of cash from time to time. This
could have adverse effects on a fund's performance if a fund were required
to sell securities or invest cash at times when it otherwise would not do
so. This activity could also accelerate the realization of capital gains
and increase a fund's transaction costs.
Additional risks listed below are in alphabetical order.
COUNTERPARTY RISK. A financial institution or other counterparty with whom the
fund does business (such as trading or securities lending), or that
underwrites, distributes or guarantees any investments or contracts that the
fund owns or is otherwise exposed to, may decline in financial health and
become unable to honor its commitments. This could cause losses for the fund or
could delay the return or delivery of collateral or other assets to the fund.
LIQUIDITY RISK. In certain situations, it may be difficult or impossible to
sell an investment in an orderly fashion at an acceptable price. This risk can
be ongoing for any security that does not trade actively or in large volumes,
for any security that trades primarily on smaller markets, and for investments
that typically trade only among a limited number of large investors (such as
certain types of derivatives or restricted securities). In unusual market
conditions, even normally liquid securities may be affected by a degree of
liquidity risk. This may affect only certain securities or an overall
securities market.
PRICING RISK. If market conditions make it difficult to value some investments,
the fund may value these investments using more subjective methods, such as
fair value pricing. In such cases, the value determined for an investment could
be different than the value realized upon such investment's sale. As a result,
you could pay more than the market value when buying fund shares or receive
less than the market value when selling fund shares.
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in
each fund.
If you want more information on each fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to
request a copy of the Statement of Additional Information (the back cover tells
you how to do this).
Keep in mind that there is no assurance that a fund will achieve its investment
objective.
A complete list of each fund's portfolio holdings as of the month-end is posted
on www.dws-investments.com on or about the 15th day of the following month.
More frequent posting of portfolio holdings information may be made
9
PROSPECTUS May 1, 2010 Fund Details
from time to time on www.dws-investments.com. The posted portfolio holdings
information is available by fund and generally remains accessible at least
until the date on which a fund files its Form N-CSR or N-Q with the Securities
and Exchange Commission for the period that includes the date as of which the
posted information is current. Each fund's Statement of Additional Information
includes a description of a fund's policies and procedures with respect to the
disclosure of a fund's portfolio holdings.
WHO MANAGES AND OVERSEES THE FUNDS
THE INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), with
headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor
for each fund. Under the oversight of the Board, the Advisor, or a subadvisor,
makes investment decisions, buys and sells securities for each fund and
conducts research that leads to these purchase and sale decisions. The Advisor
provides a full range of global investment advisory services to institutional
and retail clients.
DWS Investments is part of the Asset Management division of Deutsche Bank AG
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.
MANAGEMENT FEE. The Advisor receives a management fee from each fund. Below are
the actual rates paid by each fund for the most recent fiscal year, as a
percentage of each fund's average daily net assets.
FUND NAME FEE PAID
------------------------ ------------
DWS Communications Fund 0.82%*
------------------------- ----
DWS RREEF Real Estate
Securities Fund 0.41 %
------------------------- -----
* Reflecting the effect of expense limitations and/or fee waivers then in
effect.
For DWS Communications Fund, through September 30, 2010, the Advisor has
contractually agreed to waive and/or reimburse fund expenses to the extent
necessary to maintain the fund's total annual operating expenses at 1.76%,
2.51%, 2.51% and 1.51% for Class A, Class B, Class C and Institutional Class
shares, respectively. The agreement may only be terminated with the consent of
the fund's Board and does not extend to extraordinary expenses, taxes,
brokerage and interest, or certain other expenses.
A discussion regarding the basis for the Board's approval of each fund's
investment management agreement and, as applicable, subadvisory agreement, is
contained in the most recent shareholder reports for the annual period ended
December 31 (see "Shareholder reports" on the back cover).
Under a separate administrative services agreement between each fund and the
Advisor, each fund pays the Advisor a fee of 0.10% for providing most of each
fund's administrative services.
MULTI-MANAGER STRUCTURE. The Advisor, subject to the approval of the Board, has
ultimate responsibility to recommend the hiring, termination and replacement of
subadvisors. Each fund and the Advisor have received an order from the SEC that
allows each fund and the Advisor to utilize a multi-manager structure in
managing each fund's assets. Pursuant to the SEC order, the Advisor, with the
approval of each fund's Board, is permitted to select subadvisors that are not
affiliates of the Advisor ("non-affiliated subadvisors") to manage all or a
portion of each fund's assets without obtaining shareholder approval. The
Advisor also has the discretion to terminate any subadvisor and allocate and
reallocate each fund's assets among any non-affiliated subadvisors. The SEC
order also permits the Advisor, subject to the approval of the Board, to
materially amend an existing subadvisory agreement with a non-affiliated
subadvisor without shareholder approval. Each fund and the Advisor are subject
to the conditions imposed by the SEC order, including the condition that within
90 days of hiring of a new non-affiliated subadvisor, each fund will provide
shareholders with an information statement containing information about the new
non-affiliated subadvisor.
Each fund and the Advisor have also filed an exemptive application with the SEC
requesting an order that would extend the relief granted with respect to
non-affiliated subadvisors to certain subadvisors that are affiliates of the
Advisor ("affiliated subadvisors"). If such relief is granted by the SEC, the
Advisor, with the approval of each fund's Board, would be able to hire
non-affiliated and/or affiliated subadvisors to manage all or a portion of each
fund's assets without obtaining shareholder approval. The Advisor would also
have the discretion to terminate any subadvisor and allocate and reallocate
each fund's assets among any other subadvisors (including terminating a
non-affiliated subadvisor and replacing them with an affiliated subadvisor).
The Advisor, subject to the approval of the
10
PROSPECTUS May 1, 2010 Fund Details
Board, would also be able to materially amend an existing subadvisory agreement
with any such subadvisor without shareholder approval. There can be no
assurance that such relief will be granted by the SEC. Each fund and the
Advisor will be subject to any new conditions imposed by the SEC.
SUBADVISOR FOR DWS RREEF REAL ESTATE SECURITIES FUND
RREEF America L.L.C. ("RREEF"), an indirect, wholly owned subsidiary of
Deutsche Bank AG, is the subadvisor for DWS RREEF Real Estate Securities Fund.
RREEF, a registered investment advisor, is located at 875 N. Michigan Avenue,
Chicago, Illinois 60611. DIMA pays a fee to RREEF pursuant to an investment
subadvisory agreement between DIMA and RREEF.
RREEF makes the investment decisions, buys and sells securities for DWS RREEF
Real Estate Securities Fund and conducts research that leads to these purchase
and sale decisions.
RREEF has provided real estate investment management services to institutional
investors since 1975 across a diversified portfolio of industrial properties,
office buildings, residential apartments and shopping centers. RREEF has also
been an investment advisor of real estate securities since 1993.
MANAGEMENT
DWS COMMUNICATIONS FUND
WALTER HOLICK, DIRECTOR. Lead Portfolio Manager of the fund. Joined the fund in
2010.
o Joined the Company in 1990 as fund manager for global equities: technology,
telecommunication services and media.
o Head of Technology Sector Team; senior fund manager: Frankfurt.
o Master of Social Science in Money, Banking and Finance, University of
Birmingham, UK; Diplom-Kaufmann (German Master's degree in business and
economics), J.W. Goethe-Universit-t, Frankfurt.
FREDERIC L. FAYOLLE, CFA, DIRECTOR. Portfolio Manager of the fund. Joined the
fund in 2010.
o Joined Deutsche Asset Management and the Technology team in July 2000 after
10 years of experience with Philips Electronics in the USA with
responsibility for Philips's CRT display industry research for North
America.
o Senior fund manager covering technology and internet stocks: Frankfurt.
o MS in Engineering from University of Michigan; MS in Engineering from Ecole
Centrale Paris; MBA with finance concentration from University of Michigan
Business School.
DWS RREEF REAL ESTATE SECURITIES FUND
JOHN W. VOJTICEK, MANAGING DIRECTOR. Co-Lead Portfolio Manager of the fund.
Joined the fund in 2004.
o Joined RREEF and Deutsche Asset Management in 2004; previously worked for
Principal at KG Redding and Associates, March 2004-September 2004 and
Managing Director of RREEF from 1996-March 2004 and Deutsche Asset
Management from 2002-March 2004.
o Over 13 years of investment industry experience.
o BS, University of Southern California.
JERRY W. EHLINGER, CFA, MANAGING DIRECTOR. Co-Lead Portfolio Manager of the
fund. Joined the fund in 2004.
o Joined RREEF, Deutsche Asset Management, Inc. in 2004; previously has worked
as a Senior Vice President at Heitman Real Estate Investment Management
from 2000-2004.
o Prior to that, Senior Research Associate at Morgan Stanley Asset Management
from 1996-2000.
o Over 13 years of investment industry experience.
o BA, University of Wisconsin - Whitewater; MS, University of Wisconsin -
Madison.
JOHN F. ROBERTSON, CFA, MANAGING DIRECTOR. Portfolio Manager of the fund.
Joined the fund in 1999.
o Joined RREEF in 1997, Deutsche Asset Management in 2002; previously was an
Assistant Vice President of Lincoln Investment Management responsible for
REIT research.
o Global Head of RREEF Real Estate Securities with over 18 years of investment
industry experience.
o BA, Wabash College; MBA, Indiana University.
ASAD KAZIM, DIRECTOR. Portfolio Manager of the fund. Joined the fund in 2005.
o Joined RREEF and Deutsche Asset Management, Inc. in 2002; previously has
worked as a Financial Analyst at Clarion CRA Securities from 2000-2002.
o Over 10 years of investment industry experience.
o BS, The College of New Jersey.
Each fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in each fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.
11
PROSPECTUS May 1, 2010 Fund Details
INVESTING IN THE FUNDS
This prospectus offers the share classes noted on the front cover. Each class
has its own fees and expenses, offering you a choice of cost structures:
o CLASS A, B AND C SHARES are intended for investors seeking the advice and
assistance of a financial advisor, who will typically receive compensation
for those services.
o CLASS R AND S SHARES AND INSTITUTIONAL CLASS SHARES are only available to
particular investors or through certain programs, as described below.
The following pages tell you how to invest in a fund and what to expect as a
shareholder. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.
If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.
You can find out more about the topics covered here by speaking with your
financial advisor or a representative of your workplace retirement plan or
other investment provider.
CHOOSING A SHARE CLASS
Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you.
We describe each share class in detail on the following pages. But first, you
may want to look at the following table, which gives you a brief description
and comparison of the main features of each class. You should consult with your
financial advisor to determine which class of shares is appropriate for you.
Class B shares are closed to new purchases, except for exchanges and the
reinvestment of dividends or other distributions.
CLASSES AND FEATURES POINTS TO HELP YOU COMPARE
CLASS A
o Sales charge of up to 5.75% o Some investors may be able to
charged when you buy shares reduce or eliminate their sales
charge; see "Class A shares"
o In most cases, no charge when
you sell shares o Total annual expenses are
lower than those for Class B or
o Up to 0.25% annual share- Class C
holder servicing fee
o Distributions are generally
higher than Class B or Class C
CLASS B
o No sales charge when you buy o The deferred sales charge rate
shares falls to zero after six years
o Closed to new investment o Shares automatically convert to
Class A after six years, which
o Deferred sales charge declining means lower annual expenses
from 4.00%, charged when you going forward
sell shares you bought within
the last six years o Distributions are generally
lower than Class A
o 0.75% annual distribution fee
and up to 0.25% annual share-
holder servicing fee
CLASS C
o No sales charge when you buy o The first year deferred sales
shares charge rate is lower for Class C
shares than Class B shares, but
o Deferred sales charge of your shares never automatically
1.00%, charged when you sell convert to Class A, so annual
shares you bought within the expenses remain higher than
last year Class A
o 0.75% annual distribution fee o Distributions are generally
and up to 0.25% annual share- lower than Class A
holder servicing fee o Maximum investment of
$500,000
CLASS R
o No sales charge when you buy o Only available to participants in
shares certain retirement plans
o 0.25% annual distribution fee o Distributions are generally
and up to 0.25% annual share- higher than Class B and Class C
holder servicing fee but lower than Class A, Class S
or Institutional Class
INSTITUTIONAL CLASS
o No sales charge when you buy o Only available to certain institu-
shares and no deferred sales tional investors; typically
charge when you sell shares $1,000,000 minimum initial
investment
o Distributions are generally
higher than Class A, B, C and R,
and may be higher than Class
S, depending on relative
expenses
CLASS S
o No sales charge when you buy o Limited availability, see "Eligibil-
shares and no deferred sales ity Requirements" under
charge when you sell shares "Class S Shares"
12
PROSPECTUS May 1, 2010 Investing in the Funds
CLASS A SHARES
Class A shares may make sense for long-term investors, especially those who are
eligible for a reduced or eliminated sales charge.
Class A shares have a 12b-1 plan, under which a shareholder servicing fee of up
to 0.25% is deducted from class assets each year. Because the shareholder
servicing fee is continuous in nature, it may, over time, increase the cost of
your investment and may cost you more than paying other types of sales charges.
Class A shares have an up-front sales charge that varies with the amount you
invest:
FRONT-END SALES FRONT-END SALES
CHARGE AS % CHARGE AS % OF YOUR
YOUR INVESTMENT OF OFFERING PRICE(1,2) NET INVESTMENT(2)
-------------------- ------------------------ --------------------
Under $50,000 5.75% 6.10%
-------------------- ----- -----
$ 50,000-$99,999 4.50 4.71
----------------- ----- -----
$100,000-$249,999 3.50 3.63
----------------- ----- -----
$250,000-$499,999 2.60 2.67
----------------- ----- -----
$500,000-$999,999 2.00 2.04
----------------- ----- -----
$1 million or more see below see below
-------------------- ------------------------ --------------------
(1) The "offering price", the price you pay to buy shares, includes the sales
charge which will be deducted directly from your investment.
(2) Because of rounding in the calculation of the offering price, the actual
front-end sales charge paid by an investor may be higher or lower than
the percentages noted.
YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:
o you indicate your intent in writing to invest at least $50,000 in Class A
shares (including Class A shares in other retail DWS funds) over the next
24 months (Letter of Intent)
o the amount of Class A shares you already own (including Class A shares in
other retail DWS funds) plus the amount you're investing now in Class A
shares is at least $50,000 (Cumulative Discount)
o you are investing a total of $50,000 or more in Class A shares of several
retail DWS funds on the same day (Combined Purchases)
The point of these three features is to let you count investments made at other
times or in certain other funds for purposes of calculating your present sales
charge. Any time you can use the privileges to "move" your investment into a
lower sales charge category, it's generally beneficial for you to do so.
For purposes of determining whether you are eligible for a reduced Class A
sales charge, you and your immediate family (your spouse or life partner and
your children or stepchildren age 21 or younger) may aggregate your investments
in the DWS family of funds. This includes, for example, investments held in a
retirement account, an employee benefit plan or at a financial advisor other
than the one handling your current purchase. These combined investments will be
valued at their current offering price to determine whether your current
investment qualifies for a reduced sales charge.
To receive a reduction in your Class A initial sales charge, you must let your
financial advisor or Shareholder Services know at the time you purchase shares
that you qualify for such a reduction. You may be asked by your financial
advisor or Shareholder Services to provide account statements or other
information regarding related accounts of you or your immediate family in order
to verify your eligibility for a reduced sales charge.
For more information about sales charge discounts, please visit
www.dws-investments.com (click on the link entitled "Fund Sales Charge and
Breakpoint Schedule"), consult with your financial advisor or refer to the
section entitled "Purchase or Redemption of Shares" in each fund's Statement of
Additional Information.
IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES WITHOUT A SALES
CHARGE. For example, the sales charge will be waived if you are reinvesting
dividends or distributions or if you are exchanging an investment in Class A
shares of another fund in the DWS family of funds for an investment in Class A
shares of a fund. In addition, a sales charge waiver may apply to transactions
by certain retirement plans and certain other entities or persons (e.g.,
affiliated persons of Deutsche Asset Management or the DWS funds) and with
respect to certain types of investments (e.g., an investment advisory or agency
commission program under which you pay a fee to an investment advisor or other
firm for portfolio management or brokerage services).
Details regarding the types of investment programs and categories of investors
eligible for a sales charge waiver are provided in each fund's Statement of
Additional Information.
There are a number of additional provisions that apply in order to be eligible
for a sales charge waiver. Each fund may waive the sales charge for investors
in other situations as well. Your financial advisor or Shareholder Services can
answer your questions and help you determine if you are eligible.
IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or through one of
the sales charge reduction features described above, you may be eligible to buy
Class A shares without a sales charge ("Large Order NAV Purchase Privilege").
However, you may be charged a contingent deferred sales charge (CDSC) on any
shares you sell (see the "Shareholder Fees" table for the CDSC applicable for
these shares). This CDSC is waived under certain circumstances (see "Policies
You Should Know About"). Your financial advisor or Shareholder Services can
answer your questions and help you determine if you're eligible.
CLASS B SHARES
Class B shares of each fund are closed to new purchases, except that Class B
shares may continue to be purchased in connection with an exchange or the
reinvestment of
13
PROSPECTUS May 1, 2010 Investing in the Funds
dividends or other distributions (including the investment of dividends and
distributions from Class B shares of another fund).
With Class B shares, you pay no up-front sales charge to a fund. Class B shares
have a 12b-1 plan, under which a distribution fee of 0.75% and a shareholder
servicing fee of up to 0.25% are deducted from class assets each year. This
means the annual expenses for Class B shares are somewhat higher (and their
performance correspondingly lower) compared to Class A shares. However, unlike
Class A shares, your entire investment goes to work immediately. After six
years, Class B shares automatically convert on a tax-free basis to Class A
shares, which has the net effect of lowering the annual expenses from the
seventh year on.
Class B shares have a CDSC. This charge declines over the years you own shares
and disappears completely after six years of ownership. But for any shares you
sell within those six years, you may be charged as follows:
YEAR AFTER YOU BOUGHT SHARES CDSC ON SHARES YOU SELL
----------------------------- ------------------------------
First year 4.00%
------------------------------ -----
Second or third year 3.00
------------------------------ -----
Fourth or fifth year 2.00
------------------------------ -----
Sixth year 1.00
------------------------------ -----
Seventh year and later None (automatic conversion to
------------------------------ Class A)
------------------------------
This CDSC is waived under certain circumstances (see "Policies You Should Know
About"). Your financial advisor or Shareholder Services can answer your
questions and help you determine if you're eligible.
While Class B shares don't have any front-end sales charge, their higher annual
expenses mean that over the years you could end up paying more than the
equivalent of the maximum allowable front-end sales charge.
Except as noted above, no new purchases of Class B shares are allowed, whether
by new investors or existing shareholders, including purchases under an
automatic investment plan.
The closing of the Class B shares does not affect: (a) the right of
shareholders of Class B shares to continue to sell (redeem) their shares as
provided in this prospectus, subject to any applicable contingent deferred
sales charge ("CDSC"); or (b) the automatic conversion of Class B shares to
Class A shares six years after purchase. Class B shares currently held will
continue as Class B shares with all Class B attributes, including Rule 12b-1
fees, until sold or until their automatic conversion to Class A shares.
Purchases by shareholders under Class B shares automatic investment plans
("AIPs") established on or prior to December 1, 2009 are automatically
continuing with Class A shares. Such shareholders are permitted to purchase
Class A shares at net asset value, without a sales charge, whether as part of
their AIP or otherwise. The foregoing applies only to purchases under (i) AIPs
established directly with DWS Investments ("DWS AIPs") and, (ii) provided they
have been identified as an AIP by DWS Investments, AIPs sponsored by others,
such as government direct deposit, employer sponsored payroll direct deposit
and auto-debit programs established with the shareholder's bank or credit union
("non-DWS AIP"). Shareholders with a non-DWS AIP established prior to December
1, 2009 are responsible for contacting DWS Investments at (800) 621-1048 to
ensure that their account has been identified as an AIP in order to benefit
from this privilege and to avoid having their purchase orders rejected.
Additionally, certain employer-sponsored employee benefit plans (known as "DWS
Investments Flex Plans") using the ExpertPlan subaccount record keeping system
maintained for DWS Investments-branded plans that were previously purchasing
Class B shares instead are purchasing Class A shares at net asset value,
without a sales charge.
CLASS C SHARES
Class C shares may appeal to investors who aren't certain of their investment
time horizon.
With Class C shares, you pay no up-front sales charge to a fund. Class C shares
have a 12b-1 plan, under which a distribution fee of 0.75% and a shareholder
servicing fee of up to 0.25% are deducted from class assets each year. Because
of these fees, the annual expenses for Class C shares are similar to those of
Class B shares, but higher than those for Class A shares (and the performance
of Class C shares is correspondingly lower than that of Class A shares).
Unlike Class B shares, Class C shares do NOT automatically convert to Class A
shares after six years, so they continue to have higher annual expenses.
Class C shares have a CDSC, but only on shares you sell within one year of
buying them:
YEAR AFTER YOU BOUGHT SHARES CDSC ON SHARES YOU SELL
----------------------------- ------------------------
First year 1.00%
------------------------------ ----
Second year and later None
------------------------------ ----
This CDSC is waived under certain circumstances (see "Policies You Should Know
About"). Your financial advisor or Shareholder Services can answer your
questions and help you determine if you're eligible.
While Class C shares do not have an up-front sales charge, their higher annual
expenses mean that, over the years, you could end up paying more than the
equivalent of the maximum allowable up-front sales charge.
Orders to purchase Class C shares of $500,000 or more will be declined with the
exception of orders received from financial representatives acting for clients
whose shares are held in an omnibus account and certain employer-sponsored
employee benefit plans.
14
PROSPECTUS May 1, 2010 Investing in the Funds
CLASS R SHARES
Class R shares have no initial sales charge or deferred sales charge. Class R
shares have a 12b-1 plan, under which a distribution fee of 0.25% and a
shareholder servicing fee of up to 0.25% are deducted from class assets each
year. Because distribution fees are continuous in nature, these fees may, over
time, increase the cost of your investment and may cost you more than paying
other types of sales charges.
ELIGIBILITY REQUIREMENTS. You may buy Class R shares if you are a participant
in certain retirement plan platforms that offer Class R shares of the fund
through a plan level or omnibus account, including:
o Section 401(a) and 457 plans
o Certain section 403(b)(7) plans
o 401(k), profit sharing, money purchase pension and defined benefit plans
o Non-qualified deferred compensation plans
o Individual Retirement Accounts (IRAs)
INSTITUTIONAL CLASS SHARES
You may buy Institutional Class shares through your securities dealer or
through any financial institution that is authorized to act as a shareholder
servicing agent ("financial advisor"). Contact them for details on how to place
and pay for your order.
ELIGIBILITY REQUIREMENTS. You may buy Institutional Class shares if you are any
of the following:
o An eligible institution (e.g., a financial institution, corporation, trust,
estate or educational, religious or charitable institution).
o An employee benefit plan with assets of at least $50 million.
o A registered investment advisor or financial planner purchasing on behalf of
clients and charging an asset-based or hourly fee.
o A client of the private banking division of Deutsche Bank AG.
o A current or former director or trustee of the Deutsche or DWS mutual funds.
o An employee, the employee's spouse or life partner and children or
stepchildren age 21 or younger of Deutsche Bank or its affiliates or a
subadvisor to any fund in the DWS family of funds or a broker-dealer
authorized to sell shares in the funds.
INVESTMENT MINIMUM
The minimum initial investment is waived for:
o Shareholders with existing accounts prior to August 13, 2004 who met the
previous minimum investment eligibility requirement.
o Investment advisory affiliates of Deutsche Bank Securities, Inc., DWS funds
or Deutsche funds purchasing shares for the accounts of their investment
advisory clients.
o Employee benefit plans with assets of at least $50 million.
o Clients of the private banking division of Deutsche Bank AG.
o Institutional clients and qualified purchasers that are clients of a
division of Deutsche Bank AG.
o A current or former director or trustee of the Deutsche or DWS funds.
o An employee, the employee's spouse or life partner and children or
stepchildren age 21 or younger of Deutsche Bank or its affiliates or a
subadvisor to any fund in the DWS family of funds or a broker-dealer
authorized to sell shares of the funds.
o Registered investment advisors who trade through platforms approved by the
Advisor and whose client assets in the aggregate meet or, in the Advisor's
judgment, will meet within a reasonable period of time, the $1,000,000
minimum investment.
o Employee benefit plan platforms approved by the Advisor that invest in a
fund through an omnibus account, and that meet or, in the Advisor's
judgment, will meet within a reasonable period of time, the $1,000,000
minimum investment.
Each fund reserves the right to modify the above eligibility requirements and
investment minimum at any time. In addition, each fund, in its discretion, may
waive the minimum initial investment for specific employee benefit plans (or
family of plans) whose aggregate investment in Institutional Class shares of a
fund equals or exceeds the minimum initial investment amount but where a
particular account or program may not on its own meet such minimum amount.
CLASS S SHARES
Class S shares are generally only available to new investors through fee-based
programs of investment dealers that have special agreements with each fund's
distributor, through certain group retirement plans and through certain
registered investment advisors. These dealers and advisors typically charge
ongoing fees for services they provide.
ELIGIBILITY REQUIREMENTS. Class S shares of a fund are offered at net asset
value without a sales charge to certain eligible investors as described below.
The following investors may purchase Class S shares of DWS funds either (i)
directly from DWS Investments Distributors, Inc. ("DIDI"), each fund's
principal underwriter; or (ii) through an intermediary relationship with a
financial services firm established with respect to the DWS funds as of
December 31, 2004.
o Existing shareholders of Class S shares of any DWS fund as of December 31,
2004, and household members residing at the same address.
o Shareholders of Class S of any DWS fund who became Class S shareholders in
connection with the consolidation of Class AARP and Class S on July 17,
2006 and household members residing at the same address.
15
PROSPECTUS May 1, 2010 Investing in the Funds
o Shareholders who have owned Class S shares continuously since December 31,
2004 and household members residing at the same address may open new
accounts for Class S shares of any DWS fund.
o Any participant who has owned Class S shares of any DWS fund through an
employee sponsored retirement, employee stock, bonus, pension or profit
sharing plan continuously since December 31, 2004 may open a new individual
account for Class S shares of any DWS fund.
o Any participant who owns Class S shares of any DWS fund through a
retirement, employee stock, bonus, pension or profit sharing plan may
complete a direct rollover to an IRA account that will hold Class S shares.
This applies to individuals who begin their retirement plan investments
with a DWS fund at any time, including after December 31, 2004.
o Officers, fund Board Members, and full-time employees and their family
members, of the Advisor and its affiliates.
o Class S shares are available to any accounts managed by the Advisor, any
advisory products offered by the Advisor or DIDI and to DWS Allocation
Series or other fund of funds managed by the Advisor or its affiliates.
o Shareholders of Class S of DWS Emerging Markets Equity Fund who became
shareholders of the fund in connection with the fund's acquisition of
Scudder New Asia Fund, Inc. on April 17, 2006.
o Shareholders of Class S of any DWS fund who became Class S shareholders in
connection with the consolidation of Class M and Class S on August 18, 2006
and household members residing at the same address.
o Shareholders of Class S of any DWS fund who became Class S shareholders in
connection with the renaming or conversion of Investment Class to Class S
on October 23, 2006.
The following additional investors may purchase Class S shares of DWS funds.
o Broker-dealers, banks and registered investment advisors ("RIAs") may
purchase Class S shares in connection with a comprehensive or "wrap" fee
program or other fee based program.
o Any group retirement, employee stock, bonus, pension or profit-sharing
plans.
o Persons who purchase shares as part of an investment only placement in a 529
College Savings Plan (i.e., when the DWS fund is one of various investment
options in a 529 College Savings Plan sponsored by another provider).
o Persons who purchase shares through a Health Savings Account or a Voluntary
Employees' Benefit Association ("VEBA") Trust.
DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Class S shares.
BUYING, EXCHANGING AND SELLING SHARES
The following information applies to Class A, B, C, Institutional and S shares.
For Class R shares, please see "How to Buy, Sell and Exchange Class R Shares"
or consult your retirement plan administrator.
TO CONTACT DWS INVESTMENTS
BY PHONE
CLASS NUMBER
------- ---------------
A B C (800) 621-1048
------- ---------------
INST (800) 730-1313
------- ---------------
S (800) 728-3337
------- ---------------
BY MAIL
TYPE ADDRESS
----------------- ------------------------------------------------
EXPEDITED MAIL
All Requests DWS Investments
-----------------
Attn: (see department names under Regular Mail)
210 West 10th Street
Kansas City, MO 64121-1614
------------------------------------------------
REGULAR MAIL
New Accounts DWS Investments
Attn: New Applications
P.O. Box 219356
Kansas City, MO 64121-9356
Additional DWS Investments
Investments Attn: Purchases
P.O. Box 219154
Kansas City, MO 64121-9154
Exchanges and DWS Investments
Redemptions Attn: Transaction Processing
P.O. Box 219557
Kansas City, MO 64121-9557
HOW TO BUY SHARES
Please note that your account cannot be opened until we receive a completed
account application.
MINIMUM INITIAL INVESTMENT ($)
AUTOMATIC
UGMAS/ INVESTMENT
NON-IRA IRAS UTMAS PLANS
------------ -------------- -------- ------------------
A B C 1,000 500 1,000 500
------- ----- --- ----- ---
INST 1,000,000 N/A N/A N/A
------- --------- ---- ----- ----
S 2,500 1,000 1,000 1,000
------- --------- ----- ----- -----
For participants in certain fee-based and wrap programs offered through certain
financial intermediaries approved by the Advisor, there is no minimum initial
investment for Class A, B, C and S shares and no minimum additional investment
for Class A and S shares. Institutional Class shares also have no additional
investment minimum. The minimum additional investment for all other instances
is $50. The maximum Automatic Investment Plan investment is $250,000. For
existing Class B shareholders, the minimum initial investment for Class A and C
shares is $50.
16
PROSPECTUS May 1, 2010 Investing in the Funds
THROUGH A FINANCIAL ADVISOR
Contact your financial advisor to obtain a new account application or for
instructions about how to set up a new account. Your advisor can also assist
with making additional investments into an existing account.
BY MAIL OR EXPEDITED MAIL
To establish an account, simply complete the appropriate application and mail
it to the address provided on the form. With your application, include your
check made payable to "DWS Investments" for the required initial minimum
investment for the share class you have selected.
Once your account is established, to make additional investments, send a check
made payable to "DWS Investments" and an investment slip to the appropriate
address. If you do not have an investment slip, include a letter with your
name, account number, the full fund name and share class, and your investment
instructions. If your check fails to clear, the fund has the right to cancel
your order, hold you liable or charge you or your account for any losses or
fees the fund or its agents have incurred.
BY AUTOMATIC INVESTMENT PLAN
If you wish to take advantage of the lower initial investment minimums by
establishing an Automatic Investment Plan, make sure to complete that section
on the new account application and attach a voided check for the bank account
from which the funds will be drawn. Investments are made automatically from the
shareholder's account at a bank, savings and loan or credit union into the
shareholder's fund account. Termination by a shareholder will become effective
within thirty days after DWS Investments has received the request. Each fund
may immediately terminate a shareholder's Automatic Investment Plan in the
event that any item is unpaid by the shareholder's financial institution.
OTHER WAYS TO BUY SHARES
The following privileges must be established on your account before an
investment request is made. This can either be done by completing the
applicable section(s) on the new account application or by contacting a
customer service representative for instructions and any required paperwork.
BY PHONE USING QUICKBUY (FOR ADDITIONAL INVESTMENTS ONLY). Call DWS Investments
using the appropriate telephone number for your share class. You can use our
automated system to place your QuickBuy purchase using the Automated Clearing
House system (ACH), or you can choose to be transferred to a customer service
representative to complete your request. Transactions take two to three days to
be completed and there is a $50 minimum and a $250,000 maximum.
ON THE INTERNET (FOR ADDITIONAL INVESTMENTS ONLY). Register at
www.dws-investments.com to set up on-line access to your account(s). Or, log in
to the website if you have previously registered. Follow the instructions on
the website to request a purchase with money from the bank account you have
established on your DWS account(s).
BY WIRE (FOR ADDITIONAL INSTITUTIONAL CLASS INVESTMENTS ONLY). You may buy
shares by wire only if your account is authorized to do so. Please note that
you or your financial advisor must call us in advance of a wire transfer
purchase. After you inform us of the amount of your purchase, you will receive
a trade confirmation number. Instruct your bank to send payment by wire using
the wire instructions noted below. All wires must be received by 4:00 p.m.
Eastern time the next business day following your purchase. If your wire is not
received by 4:00 p.m. Eastern time on the next business day after the fund
receives your request to purchase shares, your transaction will be canceled at
your expense and risk.
WIRE DETAILS
Bank name State Street Bank Boston
--------------- --------------------------------
Routing Number 011000028
---------------- ---------
Attention DWS Investments
---------------- --------------------------------
DDA Number 9903-5552
---------------- ---------
FBO (Account name) (Account number)
---------------- -------------------------------
Credit (Fund name, Fund number and, if
----------------
applicable, class name)
--------------------------------
Refer to your account statement for the account name and number. Wire transfers
normally take two or more hours to complete. Wire transfers may be restricted
on holidays and at certain other times.
HOW TO EXCHANGE SHARES
REQUIREMENTS AND LIMITS
CLASS EXCHANGING INTO ANOTHER FUND ($)
------- -----------------------------------------------
A B C 1,000 minimum into new non-IRA accounts per
------- fund
500 minimum into new IRA accounts per fund
50 minimum into all existing accounts per fund
-----------------------------------------------
INST 1,000,000 minimum into new accounts per fund
------- 50 minimum into all existing accounts per fund
-----------------------------------------------
S 2,500 minimum into new non-IRA accounts per
------- fund
1,000 minimum into new IRA and UTMA/UGMA
accounts per fund
50 minimum into all existing accounts per fund
-----------------------------------------------
Exchanges are allowed between like share classes only.
In addition to what is detailed below, your financial advisor can assist you
with exchanging shares. Please contact your financial advisor using the method
that is most convenient for you.
BY PHONE
Call DWS Investments using the appropriate telephone number for your share
class. You may use our automated system to place your exchange, or you may
choose to be
17
PROSPECTUS May 1, 2010 Investing in the Funds
transferred to a customer service representative to complete your request. For
accounts with $5,000 or more, you may also establish an Automatic Exchange Plan
of a minimum of $50 to another DWS fund on a regular basis. A representative
can assist you with establishing this privilege.
ON THE INTERNET
Register at www.dws-investments.com to set up on-line access to your
account(s). Or, log in to the website if you have previously registered. Follow
the instructions on the website to request an exchange to another DWS fund.
BY MAIL OR EXPEDITED MAIL
Write a letter that includes the following information: the name(s) of all
owners and address as they appear on your account, the fund name, share class,
and account number from which you want to exchange, the dollar amount or number
of shares you wish to exchange, and the name of the fund into which you want to
exchange. Also include a daytime telephone number if we have any questions. All
owners should sign the letter and it should be mailed to the appropriate
address for exchanges and redemptions.
HOW TO SELL SHARES
REQUIREMENTS AND LIMITS
SELLING SHARES ($)
--------------------------------------------
A B C Check redemption:
------- Up to 100,000. More than 100,000 see
"Signature Guarantee"
QuickSell to your bank: Minimum 50, maximum
250,000
Wire redemption to your bank: Minimum 1,000
--------------------------------------------
INST Same as Classes A, B and C
------- --------------------------------------------
S Same as Classes A, B and C
------- --------------------------------------------
In addition to what is detailed below, your financial advisor can assist you
with selling shares. Please contact your financial advisor using the method
that is most convenient for you.
BY PHONE
Call DWS Investments using the appropriate telephone number for your share
class. You may use our automated system or you may choose to be transferred to
a customer service representative to complete your request. You may request a
check for the redemption amount sent to the address on the account.
OTHER WAYS TO SELL SHARES
The following privileges must be established on your account before a
redemption request is made. This can either be done by completing the
applicable section(s) on the new account application when you establish your
account or by contacting a customer service representative for instructions and
any required paperwork to add them to an existing account. Depending on the
method you choose to request these redemptions, different transaction maximums
may apply.
BY PHONE USING QUICKSELL. Call DWS Investments using the appropriate phone
number for your share class. You may request a QuickSell redemption (see table
for applicable minimum and maximum amounts). The proceeds are sent via the
Automated Clearing House system (ACH) to your bank. Transactions generally take
two to three days to be completed. For accounts with $5,000 or more, you may
also establish an Automatic Withdrawal Plan of a minimum of $50 to be sent on a
regular basis as you direct.
ON THE INTERNET. Register at www.dws-investments.com to set up on-line access
to your account(s). Or, log in to the website if you have previously
registered. Follow the instructions on the website to request a redemption from
your account using the desired method from your available options.
BY MAIL OR EXPEDITED MAIL. Write a letter that includes the following
information: the name(s) of all owners and address as they appear on your
account, the fund name, share class, and account number from which you want to
sell shares, the dollar amount or number of shares you wish to sell, and a
daytime telephone number if we have questions. All owners should sign the
letter and it should be mailed to the appropriate address.
Some redemptions can only be ordered in writing with a signature guarantee. For
more information, please contact DWS Investments using the appropriate
telephone number for your share class.
BY WIRE. You may sell shares by wire only if your account is authorized to do
so. You will be paid for redeemed shares by wire transfer of funds to your
financial advisor or bank upon receipt of a duly authorized redemption request
as promptly as feasible. For your protection, you may not change the
destination bank account over the phone. To sell by wire, call DWS Investments
using the appropriate telephone number for your share class. After you inform
DWS Investments of the amount of your redemption, you will receive a trade
confirmation number. We must receive your order by 4:00 p.m. Eastern time to
wire to your account the next business day.
HOW TO BUY, SELL AND EXCHANGE CLASS R SHARES
If your plan sponsor has selected Class R shares as an investment option, you
may buy Class R shares through your securities dealer or through any financial
institution that is authorized to act as a shareholder servicing agent
("shareholder servicing agent"). Contact them for details on how to enter and
pay for your order. Shareholder servicing agents include brokers, financial
representatives or any other bank, dealer or other institution that have a sub-
shareholder servicing agreement with the funds.
18
PROSPECTUS May 1, 2010 Investing in the Funds
Shareholder servicing agents may charge additional fees to investors for those
services not otherwise included in their sub-distribution or servicing
agreement, such as cash management or special trust or retirement investment
reporting. In addition, the Advisor or administrator may provide compensation
to shareholder servicing agents for distribution, administrative and
promotional services.
There are no minimum investments with respect to Class R shares.
Instructions for buying and selling shares must generally be submitted by your
retirement plan, not by plan participants for whose benefit the shares are
held. Please contact your shareholder servicing agent for more information on
how to open a fund account.
IRA ROLLOVERS. You may complete a direct rollover from a retirement plan
offering Class R shares to a DWS IRA account by reinvesting up to the full
amount of your distribution in Class A shares of any DWS fund at net asset
value. Subsequent purchases of Class A shares will be made at the public
offering price as described in the prospectus for Class A shares. Please note
that if you terminate your participation in a retirement plan and transfer all
of your Class R shares, you will lose the privilege of purchasing Class R
shares in the future. Rollovers to a DWS Class R share IRA are not permitted.
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to each fund, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of fund shares or the retention and/or servicing of fund
investors and fund shares ("revenue sharing"). Such revenue sharing payments
are in addition to any distribution or service fees payable under any Rule
12b-1 or service plan of each fund, any record keeping/sub-transfer agency/
networking fees payable by each fund (generally through the Distributor or an
affiliate) and/or the Distributor to certain financial advisors for performing
such services and any sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table
or elsewhere in this prospectus or the Statement of Additional Information as
payable to all financial advisors. For example, the Advisor, the Distributor
and/or their affiliates may compensate financial advisors for providing a fund
with "shelf space" or access to a third party platform or fund offering list or
other marketing programs, including, without limitation, inclusion of the fund
on preferred or recommended sales lists, mutual fund "supermarket" platforms
and other formal sales programs; granting the Distributor access to the
financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and obtaining other forms of
marketing support.
The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of each fund attributable to the financial
advisor, the particular fund or fund type or other measures as agreed to by the
Advisor, the Distributor and/or their affiliates and the financial advisors or
any combination thereof. The amount of these revenue sharing payments is
determined at the discretion of the Advisor, the Distributor and/or their
affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
0.01% up to 0.26% of assets of each fund serviced and maintained by the
financial advisor, 0.05% to 0.25% of sales of each fund attributable to the
financial advisor, a flat fee of $4,000 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of each fund or of any particular share class of each fund. You
should review your financial advisor's compensation disclosure and/or talk to
your financial advisor to obtain more information on how this compensation may
have influenced your financial advisor's recommendation of each fund.
Additional information regarding these revenue sharing payments is included in
each fund's Statement of Additional Information, which is available to you on
request at no charge (see the back cover of this prospectus for more
information on how to request a copy of the Statement of Additional
Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. or ExpertPlan Inc. on the DWS Investments branded retirement plan
platform (the "Platform") with the level of revenue sharing payments being
based upon sales of both the DWS funds and the non-DWS funds by the financial
advisor on the Platform or current assets of both the DWS funds and the non-DWS
funds serviced and maintained by the financial advisor on the Platform.
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PROSPECTUS May 1, 2010 Investing in the Funds
It is likely that broker-dealers that execute portfolio transactions for each
fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for each fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.
POLICIES YOU SHOULD KNOW ABOUT
Along with the information on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on
distributions and taxes, applies to all investors, including those investing
through a financial advisor.
If you are investing through a financial advisor or through a retirement plan,
check the materials you received from them about how to buy and sell shares
because particular financial advisors or other intermediaries may adopt
policies, procedures or limitations that are separate from those described in
this prospectus. Please note that a financial advisor may charge fees separate
from those charged by a fund and may be compensated by a fund.
POLICIES ABOUT TRANSACTIONS
EACH FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange is open.
Each fund calculates its share price for each class every business day, as of
the close of regular trading on the New York Stock Exchange (typically 4:00
p.m. Eastern time, but sometimes earlier, as in the case of scheduled half-day
trading or unscheduled suspensions of trading). You can place an order to buy
or sell shares at any time.
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, we will ask for your name, address, date of birth and
other information that will allow us to identify you. Some or all of this
information will be used to verify the identity of all persons opening an
account.
We might request additional information about you (which may include certain
documents, such as articles of incorporation for companies) to help us verify
your identity and, in some cases, more information and/or documents may be
required to conduct the verification. The information and documents will be
used solely to verify your identity.
We will attempt to collect any missing required and requested information by
contacting you or your financial advisor. If we are unable to obtain this
information within the time frames established by each fund, then we may reject
your application and order.
Each fund will not invest your purchase until all required and requested
identification information has been provided and your application has been
submitted in "good order." After we receive all the information, your
application is deemed to be in good order and we accept your purchase, you will
receive the net asset value per share next calculated, less any applicable
sales charge.
If we are unable to verify your identity within time frames established by each
fund, after a reasonable effort to do so, you will receive written
notification.
With certain limited exceptions, only US residents may invest in each fund.
Because orders placed through a financial advisor must be forwarded to the
transfer agent before they can be processed, you'll need to allow extra time.
Your financial advisor should be able to tell you approximately when your order
will be processed. It is the responsibility of your financial advisor to
forward your order to the transfer agent in a timely manner.
SUB-MINIMUM BALANCES FOR CLASS A, B AND C. Each fund may close your account and
send you the proceeds if your balance falls below $1,000 ($500 for accounts
with an Automatic Investment Plan funded with $50 or more per month in
subsequent investments), or below $250 for retirement accounts. We will give
you 60 days' notice (90 days for retirement accounts) so you can either
increase your balance or close your account (these policies don't apply to
investors with $100,000 or more in DWS fund shares, investors in certain
fee-based and wrap programs offered through certain financial intermediaries
approved by the Advisor, or group retirement plans and certain other accounts
having lower minimum share balance requirements).
SUB-MINIMUM BALANCES FOR INSTITUTIONAL CLASS. Each fund may redeem your shares
and close your account on 60 days' notice if it fails to meet the minimum
account balance requirement of $1,000,000 for any reason.
SUB-MINIMUM BALANCES FOR CLASS S. Each fund may close your account and send you
the proceeds if your balance falls below $2,500 ($1,000 with an Automatic
Investment Plan funded with $50 or more per month in subsequent investments);
or below $250 for retirement accounts. We will give you 60 days' notice (90
days for retirement accounts) so you can either increase your balance or close
your account (these policies don't apply to investors with $100,000 or more in
DWS fund shares, investors in certain fee-based and wrap programs offered
through certain financial intermediaries approved by the
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PROSPECTUS May 1, 2010 Investing in the Funds
Advisor, or group retirement plans and certain other accounts having lower
minimum share balance requirements).
An account maintenance fee of $6.25 per quarter (for a $25 annual fee) will be
assessed on accounts whose balances fail to meet the minimum initial investment
requirement for a period of 90 days prior to the assessment date. The quarterly
assessment will occur on or about the 15th of the last month in each calendar
quarter. Please note that the fee will be assessed on accounts that fall below
the minimum for any reason, including due to market value fluctuations,
redemptions or exchanges. The account maintenance fee does not apply to: (i)
accounts with an automatic investment plan; (ii) accounts held in an omnibus
account through a financial services firm; (iii) accounts maintained on behalf
of participants in certain fee based and wrap programs offered through certain
financial intermediaries approved by the Advisor; (iv) participant level
accounts in group retirement plans held on the records of a retirement plan
record keeper; and (v) accounts held by shareholders who maintain $100,000 or
more in aggregate assets in DWS fund shares.
MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive trading of fund
shares may present risks to long-term shareholders, including potential
dilution in the value of fund shares, interference with the efficient
management of a fund's portfolio (including losses on the sale of investments),
taxable gains to remaining shareholders and increased brokerage and
administrative costs. These risks may be more pronounced if a fund invests in
certain securities, such as those that trade in foreign markets, are illiquid
or do not otherwise have "readily available market quotations." Certain
investors may seek to employ short-term trading strategies aimed at exploiting
variations in portfolio valuation that arise from the nature of the securities
held by a fund (e.g., "time zone arbitrage"). Each fund discourages short-term
and excessive trading and has adopted policies and procedures that are intended
to detect and deter short-term and excessive trading.
Pursuant to its policies, each fund will impose a 2% redemption fee on fund
shares held for less than a specified holding period (subject to certain
exceptions discussed below under "Redemption fees"). Each fund also reserves
the right to reject or cancel a purchase or exchange order for any reason
without prior notice. For example, a fund may in its discretion reject or
cancel a purchase or an exchange order even if the transaction is not subject
to the specific roundtrip transaction limitation described below if the Advisor
believes that there appears to be a pattern of short-term or excessive trading
activity by a shareholder or deems any other trading activity harmful or
disruptive to a fund. Each fund, through its Advisor and transfer agent, will
measure short-term and excessive trading by the number of roundtrip
transactions within a shareholder's account during a rolling 12-month period. A
"roundtrip" transaction is defined as any combination of purchase and
redemption activity (including exchanges) of the same fund's shares. Each fund
may take other trading activity into account if a fund believes such activity
is of an amount or frequency that may be harmful to long-term shareholders or
disruptive to portfolio management.
Shareholders are limited to four roundtrip transactions in the same DWS fund
(excluding money market funds) over a rolling 12-month period. Shareholders
with four or more roundtrip transactions in the same DWS fund within a rolling
12-month period generally will be blocked from making additional purchases of,
or exchanges into, that DWS fund. Each fund has sole discretion whether to
remove a block from a shareholder's account. The rights of a shareholder to
redeem shares of a DWS fund are not affected by the four roundtrip transaction
limitation, but all redemptions remain subject to each fund's redemption fee
policy (see "Redemption fees" described below).
Each fund may make exceptions to the roundtrip transaction policy for certain
types of transactions if, in the opinion of the Advisor, the transactions do
not represent short-term or excessive trading or are not abusive or harmful to
a fund, such as, but not limited to, systematic transactions, required minimum
retirement distributions, transactions initiated by a fund or administrator and
transactions by certain qualified funds-of-funds.
In certain circumstances where shareholders hold shares of a fund through a
financial intermediary, a fund may rely upon the financial intermediary's
policy to deter short-term or excessive trading if the Advisor believes that
the financial intermediary's policy is reasonably designed to detect and deter
transactions that are not in the best interests of a fund. A financial
intermediary's policy relating to short-term or excessive trading may be more
or less restrictive than the DWS funds' policy, may permit certain transactions
not permitted by the DWS funds' policies, or prohibit transactions not subject
to the DWS funds' policies.
The Advisor may also accept undertakings from a financial intermediary to
enforce short-term or excessive trading policies on behalf of a fund that
provide a substantially similar level of protection for each fund against such
transactions. For example, certain financial intermediaries may have
contractual, legal or operational restrictions that prevent them from blocking
an account. In such instances, the financial intermediary may use alternate
techniques that the Advisor considers to be a reasonable substitute for such a
block.
In addition, if a fund invests some portion of its assets in foreign
securities, it has adopted certain fair valuation practices intended to protect
the fund from "time zone arbitrage" with respect to its foreign securities
holdings and other trading practices that seek to exploit variations in
portfolio valuation that arise from the nature of the securities held by a
fund. (See "How each fund calculates share price.")
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PROSPECTUS May 1, 2010 Investing in the Funds
There is no assurance that these policies and procedures will be effective in
limiting short-term and excessive trading in all cases. For example, the
Advisor may not be able to effectively monitor, detect or limit short-term or
excessive trading by underlying shareholders that occurs through omnibus
accounts maintained by broker-dealers or other financial intermediaries. The
Advisor reviews trading activity at the omnibus level to detect short-term or
excessive trading. If the Advisor has reason to suspect that short-term or
excessive trading is occurring at the omnibus level, the Advisor will contact
the financial intermediary to request underlying shareholder level activity.
Depending on the amount of fund shares held in such omnibus accounts (which may
represent most of a fund's shares) short-term and/or excessive trading of fund
shares could adversely affect long-term shareholders in a fund. If short-term
or excessive trading is identified, the Advisor will take appropriate action.
Each fund's market timing policies and procedures may be modified or terminated
at any time.
REDEMPTION FEES. Each fund imposes a redemption fee of 2% of the total
redemption amount (calculated at net asset value, without regard to the effect
of any contingent deferred sales charge; any contingent deferred sales charge
is also assessed on the total redemption amount without regard to the
assessment of the 2% redemption fee) on all fund shares redeemed or exchanged
within 15 days of buying them (either by purchase or exchange). The redemption
fee is paid directly to the fund and is designed to encourage long-term
investment and to offset transaction and other costs associated with short-term
or excessive trading. For purposes of determining whether the redemption fee
applies, shares held the longest time will be treated as being redeemed first
and shares held the shortest time will be treated as being redeemed last.
The redemption fee is applicable to fund shares purchased either directly or
through a financial intermediary, such as a broker-dealer. Transactions through
financial intermediaries typically are placed with the fund on an omnibus basis
and include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against
one another and placed on an aggregate basis; consequently the identities of
the individuals on whose behalf the transactions are placed generally are not
known to the fund. For this reason, the fund has undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the fund. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the
fund's. Subject to approval by the Advisor or each fund's Board, intermediaries
who transact business on an omnibus basis may implement the redemption fees
according to their own operational guidelines (which may be different than the
funds' policies) and remit the fees to the funds.
The redemption fee will not be charged in connection with the following
exchange or redemption transactions: (i) transactions on behalf of participants
in certain research wrap programs; (ii) transactions on behalf of a shareholder
to return any excess IRA contributions to the shareholder; (iii) transactions
on behalf of a shareholder to effect a required minimum distribution on an IRA;
(iv) transactions on behalf of any mutual fund advised by the Advisor and its
affiliates (e.g., "funds of funds") or, in the case of a master/
feeder relationship, redemptions by the feeder fund from the master portfolio;
(v) transactions on behalf of certain unaffiliated mutual funds operating as
funds of funds; (vi) transactions following death or disability of any
registered shareholder, beneficial owner or grantor of a living trust with
respect to shares purchased before death or disability; (vii) transactions
involving hardship of any registered shareholder; (viii) systematic
transactions with pre-defined trade dates for purchases, exchanges or
redemptions, such as automatic account rebalancing, or loan origination and
repayments; (ix) transactions involving shares purchased through the
reinvestment of dividends or other distributions; (x) transactions involving
shares transferred from another account in the same fund or converted from
another class of the same fund (the redemption fee period will carry over to
the acquired shares); (xi) transactions initiated by a fund or administrator
(e.g., redemptions for not meeting account minimums, to pay account fees funded
by share redemptions, or in the event of the liquidation or merger of the
fund); or (xii) transactions in cases when there are legal or contractual
limitations or restrictions on the imposition of the redemption fee (as
determined by a fund or its agents in their sole discretion). It is the policy
of the DWS funds to permit approved fund platform providers to execute
transactions in shares of the funds without the imposition of a redemption fee
if such providers have implemented alternative measures that are determined by
the Advisor to provide controls on short-term and excessive trading that are
comparable to the DWS funds' policies.
THE AUTOMATED INFORMATION LINE is available 24 hours a day by calling the
appropriate telephone number for your share class. You can use our automated
phone service to get information on DWS funds generally and on accounts held
directly at DWS Investments. You can also use this service to request share
transactions.
TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are automatically
entitled to telephone redemption and exchange privileges, but you may elect not
to have them when you open your account or by calling the appropriate phone
number on the back cover.
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PROSPECTUS May 1, 2010 Investing in the Funds
Since many transactions may be initiated by telephone or electronically, it's
important to understand that as long as we take reasonable steps to ensure that
an order to purchase or redeem shares is genuine, such as recording calls or
requesting personal security information, we are not responsible for any losses
that may occur as a result. For transactions conducted over the Internet, we
recommend the use of a secure Internet browser. In addition, you should verify
the accuracy of your confirmation statements immediately after you receive
them.
EACH FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you currently have
shares in certificated form, you must include the share certificates properly
endorsed or accompanied by a duly executed stock power when exchanging or
redeeming shares. You may not exchange or redeem shares in certificate form by
telephone or via the Internet.
WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we don't
charge a fee to send or receive wires, it's possible that your bank may do so.
Wire transactions are generally completed within 24 hours. Each fund can only
send wires of $1,000 or more and accept wires of $50 or more.
EACH FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check drawn on a
US bank, a bank or Federal Funds wire transfer or an electronic bank transfer.
Each fund does not accept third party checks. A third party check is a check
made payable to one or more parties and offered as payment to one or more other
parties (e.g., a check made payable to you that you offer as payment to someone
else). Checks should normally be payable to DWS Investments and drawn by you or
a financial institution on your behalf with your name or account number
included with the check. If you pay for shares by check and the check fails to
clear, we have the right to cancel your order, hold you liable or charge you or
your account for any losses or fees each fund or its agents have incurred.
SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth of shares
or send proceeds to a third party or to a new address, you'll usually need to
place your order in writing and include a signature guarantee. However, if you
want money transferred electronically to a bank account that is already on file
with us, you don't need a signature guarantee. Also, generally you don't need a
signature guarantee for an exchange, although we may require one in certain
other circumstances.
A signature guarantee is simply a certification of your signature - a valuable
safeguard against fraud. You can get a signature guarantee from an eligible
guarantor institution, including commercial banks, savings and loans, trust
companies, credit unions, member firms of a national stock exchange or any
member or participant of an approved signature guarantor program. We require
stamps from members of a medallion signature guarantee program. A notarized
document cannot be accepted in lieu of a signature guarantee.
SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION ACCOUNTS may
require additional documentation. Please call DWS Investments (see phone
numbers on the back cover) or contact your financial advisor for more
information.
WHEN YOU SELL SHARES THAT HAVE A CDSC, the CDSC is based on the original
purchase cost or current market value of the shares sold, whichever is less. In
processing orders to sell shares, the shares with the lowest CDSC are sold
first. For each investment you make, the date you first bought shares is the
date we use to calculate a CDSC on that particular investment. A CDSC is not
imposed when you exchange from one fund into another. When you sell shares of
the fund that you exchanged into, however, a CDSC may be imposed which may
differ from the schedule for the fund you exchanged out of. Your shares will
retain their original cost and purchase date.
There are certain cases in which you may be exempt from a CDSC. These include:
o The death or disability of an account owner (including a joint owner). This
waiver applies only under certain conditions. Please contact your financial
advisor or Shareholder Services to determine if the conditions exist
o Withdrawals made through an automatic withdrawal plan up to a maximum of 12%
per year of the net asset value of the account
o Withdrawals related to certain retirement or benefit plans
o Redemptions for certain loan advances, hardship provisions or returns of
excess contributions from retirement plans
o For Class A shares purchased through the Large Order NAV Purchase Privilege,
redemption of shares whose dealer of record at the time of the investment
notifies the Distributor that the dealer waives the applicable commission
o For Class C shares, redemption of shares purchased through a
dealer-sponsored asset allocation program maintained on an omnibus
record-keeping system, provided the dealer of record has waived the advance
of the first year distribution and service fees applicable to such shares
and has agreed to receive such fees quarterly
In each of these cases, there are a number of additional provisions that apply
in order to be eligible for a CDSC waiver. Your financial advisor or
Shareholder Services can answer your questions and help you determine if you
are eligible.
IF YOU SELL SHARES IN A DWS FUND FOR WHICH YOU PAID A SALES CHARGE AND THEN
DECIDE TO INVEST WITH DWS INVESTMENTS AGAIN WITHIN SIX MONTHS, you may be able
to take advantage of the "reinstatement feature." With this feature, except for
Class B shares, you can put your money back into the same class of a DWS fund
at its current net asset value and, for purposes of a sales charge, it will be
treated as if it had never left DWS Investments. You'll be reimbursed (in the
form of fund shares) for any
23
PROSPECTUS May 1, 2010 Investing in the Funds
CDSC you paid when you sold shares in a DWS fund. Future CDSC calculations will
be based on your original investment date, rather than your reinstatement date.
Investors who sold Class B shares may buy Class A shares (if available) with no
sales charge, although they won't be reimbursed for any CDSC they paid. You can
only use the reinstatement feature once for any given group of shares. To take
advantage of this feature, contact Shareholder Services or your financial
advisor.
CLASS A TO CLASS S IN THE SAME FUND EXCHANGE PRIVILEGE. Investors who have
invested in Class A shares through a comprehensive or "wrap" fee program, or
other fee-based program sponsored by a broker-dealer, bank or registered
investment adviser, may become eligible to invest in Class S shares. Subject to
the discretion of the Distributor, such shareholders may exchange their Class A
shares for Class S shares of equal aggregate value of the same fund. No sales
charges or other charges will apply to any such exchanges. Investors should
contact their selling and/or servicing agents to learn more about the details
of this exchange feature.
MONEY FROM SHARES YOU SELL is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are circumstances when it could be longer,
including, but not limited to, when you are selling shares you bought recently
by check or ACH (the funds will be placed under a 10 calendar day hold to
ensure good funds) or when unusual circumstances prompt the SEC to allow
further delays. Certain expedited redemption processes (e.g., redemption
proceeds by wire) may also be delayed or unavailable when you are selling
shares recently purchased or in the event of the closing of the Federal Reserve
wire payment system. Each fund reserves the right to suspend or postpone
redemptions as permitted pursuant to Section 22(e) of the 1940 Act. Generally,
those circumstances are when 1) the New York Stock Exchange is closed other
than customary weekend or holiday closings; 2) the SEC determines that trading
on the New York Stock Exchange is restricted; 3) the SEC determines that an
emergency exists which makes the disposal of securities owned by a fund or the
fair determination of the value of a fund's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also be delayed in the event of a
non-routine closure of the Federal Reserve wire payment system. For additional
rights reserved by each fund, please see "Other rights we reserve."
HOW EACH FUND CALCULATES SHARE PRICE
To calculate net asset value, or NAV, each share class uses the following
equation:
TOTAL TOTAL TOTAL NUMBER OF
- / = NAV
( )
ASSETS LIABILITIES SHARES OUTSTANDING
The price at which you buy shares is based on the NAV per share calculated
after the order is received and accepted by the transfer agent, although for
Class A shares it will be adjusted to allow for any applicable sales charge
(see "Choosing a Share Class"). The price at which you sell shares is also
based on the NAV per share calculated after the order is received and accepted
by the transfer agent, although a CDSC may be taken out of the proceeds (see
"Choosing a Share Class").
EACH FUND CHARGES A REDEMPTION FEE EQUAL TO 2% of the value of shares redeemed
or exchanged within 15 days of purchase. Please see "Policies about
transactions - Redemption fees" for further information.
WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN INDEPENDENT
PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE. However, we may use
methods approved by the Board, such as a fair valuation model, which are
intended to reflect fair value when pricing service information or market
quotations are not readily available or when a security's value or a meaningful
portion of the value of a fund's portfolio is believed to have been materially
affected by a significant event, such as a natural disaster, an economic event
like a bankruptcy filing, or a substantial fluctuation in domestic or foreign
markets that has occurred between the close of the exchange or market on which
the security is principally traded (for example, a foreign exchange or market)
and the close of the New York Stock Exchange. In such a case, a fund's value
for a security is likely to be different from the last quoted market price or
pricing service information. In addition, due to the subjective and variable
nature of fair value pricing, it is possible that the value determined for a
particular asset may be materially different from the value realized upon such
asset's sale. It is expected that the greater the percentage of fund assets
that is invested in non-US securities, the more extensive will be a fund's use
of fair value pricing. This is intended to reduce a fund's exposure to "time
zone arbitrage" and other harmful trading practices. (See "Market timing
policies and procedures.")
TO THE EXTENT THAT A FUND INVESTS IN SECURITIES THAT ARE TRADED PRIMARILY IN
FOREIGN MARKETS, the value of its holdings could change at a time when you
aren't able to buy or sell fund shares. This is because some foreign markets
are open on days or at times when a fund doesn't price its shares. (Note that
prices for securities that trade on foreign exchanges can change significantly
on days when the New York Stock Exchange is closed and you cannot buy or sell
fund shares. Price changes in the securities a fund owns may ultimately affect
the price of fund shares the next time the NAV is calculated.)
OTHER RIGHTS WE RESERVE
You should be aware that we may do any of the following:
o withdraw or suspend the offering of shares at any time
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PROSPECTUS May 1, 2010 Investing in the Funds
o withhold a portion of your distributions and redemption proceeds if we have
been notified by the IRS that you are subject to backup withholding or if
you fail to provide us with the correct taxpayer ID number and certain
certifications, including certification that you are not subject to backup
withholding
o reject a new account application if you don't provide any required or
requested identifying information, or for any other reason
o refuse, cancel, limit or rescind any purchase or exchange order, without
prior notice; freeze any account (meaning you will not be able to purchase
fund shares in your account); suspend account services; and/or
involuntarily redeem your account if we think that the account is being
used for fraudulent or illegal purposes; one or more of these actions will
be taken when, at our sole discretion, they are deemed to be in a fund's
best interests or when a fund is requested or compelled to do so by
governmental authority or by applicable law
o close and liquidate your account if we are unable to verify your identity,
or for other reasons; if we decide to close your account, your fund shares
will be redeemed at the net asset value per share next calculated after we
determine to close your account (less any applicable sales charges or
redemption fees); you may recognize a gain or loss on the redemption of
your fund shares and you may incur a tax liability
o pay you for shares you sell by "redeeming in kind," that is, by giving you
securities (which typically will involve brokerage costs for you to
liquidate) rather than cash, but which will be taxable to the same extent
as a redemption for cash; a fund generally won't make a redemption in kind
unless your requests over a 90-day period total more than $250,000 or 1% of
the value of a fund's net assets, whichever is less
o change, add or withdraw various services, fees and account policies (for
example, we may adjust a fund's investment minimums at any time)
UNDERSTANDING DISTRIBUTIONS AND TAXES
Each fund intends to distribute to its shareholders virtually all of its net
earnings. Each fund can earn money in two ways: by receiving interest,
dividends or other income from investments it holds and by selling investments
for more than it paid for them. (Each fund's earnings are separate from any
gains or losses stemming from your own purchase and sale of shares.) Each fund
may not always pay a dividend or other distribution for a given period.
DWS Communications Fund intends to pay distributions of substantially all of
its income annually. DWS RREEF Real Estate Securities Fund intends to pay
distributions of substantially all of its income quarterly. Each fund intends
to pay distributions from realized capital gains annually, usually in December.
If necessary each fund may make distributions at other times as needed.
Dividends or distributions declared and payable to shareholders of record in
the last quarter of a given calendar year are treated for federal income tax
purposes as if they were received on December 31 of that year, if such
dividends or distributions are actually paid in January of the following year.
For federal income tax purposes, income and capital gains distributions are
generally taxable to shareholders. However, dividends and distributions
received by retirement plans qualifying for tax exemption under federal income
tax laws generally will not be taxable.
YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You can have
them all automatically reinvested in fund shares (at NAV), all deposited
directly to your bank account or all sent to you by check, have one type
reinvested and the other sent to you by check or have them invested in a
different fund. Tell us your preference on your application. If you don't
indicate a preference, your dividends and distributions will all be reinvested
in shares of the fund without a sales charge (if applicable). Distributions are
treated the same for federal income tax purposes whether you receive them in
cash or reinvest them in additional shares. Under the terms of
employer-sponsored qualified plans, and retirement plans, reinvestment (at NAV)
is the only option.
BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL INCOME TAX
CONSEQUENCES FOR YOU (except in employer-sponsored qualified plans, IRAs or
other tax-advantaged accounts). Your sale of shares may result in a capital
gain or loss. The gain or loss will be long-term or short-term depending on how
long you owned the shares that were sold. For federal income tax purposes, an
exchange is treated the same as a sale.
THE FEDERAL INCOME TAX STATUS of a fund's earnings you receive and your own
fund transactions generally depends on their type:
GENERALLY TAXED AT LONG-TERM GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES: INCOME RATES:
DISTRIBUTIONS FROM A FUND
o gains from the sale of securi- o gains from the sale of securi-
ties held (or treated as held) ties held by a fund for one
by a fund for more than one year or less
year o all other taxable income
o qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
o gains from selling fund o gains from selling fund
shares held for more than shares held for one year or
one year less
ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY A FUND MAY BE SUBJECT TO
FOREIGN WITHHOLDING TAXES. In that case, a fund's yield on those securities
would generally be decreased. Shareholders generally will not be entitled to
claim a credit or deduction with respect to foreign taxes paid by a fund. In
addition, any investments in foreign securities or foreign currencies may
increase or accelerate
25
PROSPECTUS May 1, 2010 Investing in the Funds
a fund's recognition of ordinary income and may affect the timing or amount of
the fund's distributions. If you invest in a fund through a taxable account,
your after-tax return could be negatively affected.
Investments in certain debt obligations or other securities may cause a fund to
recognize taxable income in excess of the cash generated by them. Thus, a fund
could be required at times to liquidate other investments in order to satisfy
its distribution requirements.
For taxable years beginning before January 1, 2011, distributions to
individuals and other noncorporate shareholders of investment income designated
by a fund as derived from qualified dividend income are eligible for taxation
for federal income tax purposes at the more favorable long-term capital gain
rates. It is currently unclear whether Congress will extend this provision for
taxable years beginning on or after January 1, 2011. Qualified dividend income
generally includes dividends received by a fund from domestic and some foreign
corporations. It does not include income from investments in debt securities.
In addition, a fund must meet certain holding period and other requirements
with respect to the dividend-paying stocks in its portfolio and the shareholder
must meet certain holding period and other requirements with respect to a
fund's shares for the lower tax rates to apply.
Dividends received by a fund from a REIT may be treated as qualified dividend
income only to the extent the dividends are attributable to qualified dividend
income received by such REIT. Distributions received by a fund from REITs will
not be eligible for the dividends received deduction.
For taxable years beginning before January 1, 2011, the maximum federal income
tax rate imposed on long-term capital gains recognized by individuals and other
noncorporate shareholders has been temporarily reduced to 15%, in general, with
lower rates applying to taxpayers in the 10% and 15% rate brackets. It is
currently unclear whether Congress will extend this provision for taxable years
beginning on or after January 1, 2011. For taxable years beginning on or after
January 1, 2011, the maximum long-term capital gain rate is scheduled to return
to 20%.
Certain types of income received by a fund from REITs, real estate mortgage
investment conduits ("REMICs"), taxable mortgage pools or other investments may
cause the fund to designate some or all of its distributions as "excess
inclusion income." To fund shareholders such excess inclusion income may (1)
constitute taxable income, as unrelated business taxable income ("UBTI") for
those shareholders who would otherwise be exempt from federal income tax, such
as individual retirement accounts, 401(k) accounts, Keogh plans, pension plans
and certain charitable entities; (2) not generally be offset by net operating
losses; (3) not be eligible for reduced US withholding for non-US shareholders,
including shareholders from tax treaty countries; and (4) cause the fund to be
subject to tax if certain "disqualified organizations" are fund shareholders.
YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION EARLY EACH
YEAR. These statements tell you the amount and the federal income tax
classification of any dividends or distributions you received. They also have
certain details on your purchases and sales of shares.
Because the REITs invested in by DWS RREEF Real Estate Securities Fund do not
provide complete information about the taxability of their distributions until
after the calendar year-end, in order to determine how much of the fund's
distribution is taxable to shareholders, the fund may request permission from
the IRS each year for an extension of time to issue Form 1099-DIV.
IF YOU INVEST RIGHT BEFORE A FUND PAYS A DIVIDEND, you'll be getting some of
your investment back as a taxable dividend. You can avoid this by investing
after a fund pays a dividend. In tax-advantaged retirement accounts you
generally do not need to worry about this.
If a fund's distributions exceed its current and accumulated earnings and
profits, the excess will be treated for federal income tax purposes as a
tax-free return of capital to the extent of your basis in your shares and
thereafter as a capital gain. Because a return of capital distribution reduces
the basis of your shares, a return of capital distribution may result in a
higher capital gain or a lower capital loss when you sell your shares.
CORPORATIONS are taxed at the same rates on ordinary income and capital gains
but may be eligible for a dividends-received deduction for a portion of the
income dividends they receive from a fund, provided certain holding period and
other requirements are met.
The above discussion summarizes certain federal income tax consequences for
shareholders who are US persons. If you are a non-US person, please consult
your own tax advisor with respect to the US tax consequences to you of an
investment in a fund. For more information, see "Taxes" in the Statement of
Additional Information.
26
PROSPECTUS May 1, 2010 Investing in the Funds
FINANCIAL HIGHLIGHTS
The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in a
fund would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with each
fund's financial statements, is included in each fund's annual report (see
"Shareholder reports" on the back cover). On July 10, 2006, DWS RREEF Real
Estate Securities Fund acquired all the assets and assumed all the liabilities
of the Predecessor Fund. The information contained in the table for DWS RREEF
Real Estate Securities Fund for periods prior to July 10, 2006 has been derived
from the Predecessor Fund's financial statements.
DWS COMMUNICATIONS FUND - CLASS A
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ---------- ----------- ----------- ----------- -----------
SELECTED PER SHARE DATA
------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.58 $ 23.26 $ 23.38 $ 19.30 $ 16.79
------------------------------------------------ ------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)(a) .23 .31 ( .08) ( .03) ( .03)
------------------------------------------------ ------- -------- -------- -------- --------
Net realized and unrealized gain (loss) 4.82 (13.66) ( .04) 4.11 2.54
------------------------------------------------ ------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 5.05 (13.35) ( .12) 4.08 2.51
------------------------------------------------ ------- -------- -------- -------- --------
Less distributions from:
Net investment income ( .25) ( .33) - - -
------------------------------------------------ ------- -------- -------- -------- --------
Tax return of capital ( .01) - - - -
------------------------------------------------ ------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .26) ( .33) - - -
------------------------------------------------ ------- -------- -------- -------- --------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------------ ------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 14.37 $ 9.58 $ 23.26 $ 23.38 $ 19.30
------------------------------------------------ ------- -------- -------- -------- --------
Total Return (%)(b,c) 52.60 (57.39) ( .51) 21.14 14.95
------------------------------------------------ ------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 124 87 269 329 295
------------------------------------------------ ------- -------- -------- -------- --------
Ratio of expenses before expense reductions (%) 2.05 1.79 1.49 1.63 1.58
------------------------------------------------- ------- -------- -------- -------- --------
Ratio of expenses after expense reductions (%) 1.61 1.46 1.44 1.49 1.43
------------------------------------------------- ------- -------- -------- -------- --------
Ratio of net investment income (loss) (%) 1.89 1.86 ( .32) ( .13) ( .18)
------------------------------------------------- ------- -------- -------- -------- --------
Portfolio turnover rate (%) 148 118 39 27 21
------------------------------------------------- ------- -------- -------- -------- --------
(a) Based on average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been
reduced.
* Amount is less than $.005.
27
PROSPECTUS May 1, 2010 Financial Highlights
DWS COMMUNICATIONS FUND - CLASS B
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ---------- ----------- ----------- ----------- -----------
SELECTED PER SHARE DATA
------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.82 $ 21.33 $ 21.61 $ 17.96 $ 15.75
------------------------------------------------ ------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)(a) .14 .23 ( .23) ( .15) ( .13)
------------------------------------------------ ------- -------- -------- -------- --------
Net realized and unrealized gain (loss) 4.42 (12.50) ( .05) 3.80 2.34
------------------------------------------------ ------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 4.56 (12.27) ( .28) 3.65 2.21
------------------------------------------------ ------- -------- -------- -------- --------
Less distributions from:
Net investment income ( .12) ( .24) - - -
------------------------------------------------ ------- -------- -------- -------- --------
Tax return of capital ( .01) - - - -
------------------------------------------------ ------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .13) ( .24) - - -
------------------------------------------------ ------- -------- -------- -------- --------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------------ ------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 13.25 $ 8.82 $ 21.33 $ 21.61 $ 17.96
------------------------------------------------ ------- -------- -------- -------- --------
Total Return (%)(b,c) 51.48 (57.50) ( 1.30) 20.32 14.03
------------------------------------------------ ------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 1 1 5 10 27
------------------------------------------------ ------- -------- -------- -------- --------
Ratio of expenses before expense reductions (%) 3.20 2.66 2.66 2.47 2.33
------------------------------------------------- ------- -------- -------- -------- --------
Ratio of expenses after expense reductions (%) 2.23 2.03 2.19 2.24 2.18
------------------------------------------------- ------- -------- -------- -------- --------
Ratio of net investment income (loss) (%) 1.23 1.29 ( 1.07) ( .88) ( .93)
------------------------------------------------- ------- -------- -------- -------- --------
Portfolio turnover rate (%) 148 118 39 27 21
------------------------------------------------- ------- -------- -------- -------- --------
(a) Based on average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been
reduced.
* Amount is less than $.005.
28
PROSPECTUS May 1, 2010 Financial Highlights
DWS COMMUNICATIONS FUND - CLASS C
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ---------- ----------- ----------- ----------- -----------
SELECTED PER SHARE DATA
------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.79 $ 21.35 $ 21.63 $ 17.98 $ 15.77
------------------------------------------------ ------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)(a) .12 .21 ( .23) ( .15) ( .14)
------------------------------------------------ ------- -------- -------- -------- --------
Net realized and unrealized gain (loss) 4.42 (12.53) ( .05) 3.80 2.35
------------------------------------------------ ------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 4.54 (12.32) ( .28) 3.65 2.21
------------------------------------------------ ------- -------- -------- -------- --------
Less distributions from:
Net investment income ( .12) ( .24) - - -
------------------------------------------------ ------- -------- -------- -------- --------
Tax return of capital ( .01) - - - -
------------------------------------------------ ------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .13) ( .24) - - -
------------------------------------------------ ------- -------- -------- -------- --------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------------ ------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 13.20 $ 8.79 $ 21.35 $ 21.63 $ 17.98
------------------------------------------------ ------- -------- -------- -------- --------
Total Return (%)(b,c) 51.42 (57.69) ( 1.29) 20.30 14.01
------------------------------------------------ ------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 5 4 11 13 13
------------------------------------------------ ------- -------- -------- -------- --------
Ratio of expenses before expense reductions (%) 3.00 2.70 2.38 2.43 2.33
------------------------------------------------- ------- -------- -------- -------- --------
Ratio of expenses after expense reductions (%) 2.36 2.21 2.19 2.24 2.18
------------------------------------------------- ------- -------- -------- -------- --------
Ratio of net investment income (loss) (%) 1.04 1.11 ( 1.07) ( .88) ( .93)
------------------------------------------------- ------- -------- -------- -------- --------
Portfolio turnover rate (%) 148 118 39 27 21
------------------------------------------------- ------- -------- -------- -------- --------
(a) Based on average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been
reduced.
* Amount is less than $.005.
DWS COMMUNICATIONS FUND - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ---------------- ----------------- ----------- ---------------- ----------------
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.81 $ 23.83 $ 23.88 $ 19.66 $ 17.06
------------------------------------------------ -------- --------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)(a) .26 .35 .00 .02 .01
------------------------------------------------ -------- --------- -------- -------- --------
Net realized and unrealized gain (loss) 4.95 (14.00) ( .05) 4.20 2.59
------------------------------------------------ -------- --------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 5.21 (13.65) ( .05) 4.22 2.60
------------------------------------------------ -------- --------- -------- -------- --------
Less distributions from:
Net investment income ( .32) ( .37) - - -
------------------------------------------------ -------- --------- -------- -------- --------
Tax return of capital ( .01) - - - -
------------------------------------------------ -------- --------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .33) ( .37) - - -
------------------------------------------------ -------- --------- -------- -------- --------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------------ -------- --------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 14.69 $ 9.81 $ 23.83 $ 23.88 $ 19.66
------------------------------------------------ -------- --------- -------- -------- --------
Total Return (%) 52.87 (b) (57.25)(b) ( .21) 21.46 (b) 15.24 (b)
------------------------------------------------ -------- --------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 2 2 5 4 2
------------------------------------------------ -------- --------- -------- -------- --------
Ratio of expenses before expense reductions (%) 1.52 1.33 1.10 1.33 1.33
------------------------------------------------ -------- --------- -------- -------- --------
Ratio of expenses after expense reductions (%) 1.34 1.21 1.10 1.24 1.18
------------------------------------------------ -------- --------- -------- -------- --------
Ratio of net investment income (loss) (%) 2.07 2.11 .02 .12 .07
------------------------------------------------ -------- --------- -------- -------- --------
Portfolio turnover rate (%) 148 118 39 27 21
------------------------------------------------ -------- --------- -------- -------- --------
(a) Based on average shares outstanding during the period.
(b) Total return would have been lower had certain expenses not been
reduced.
* Amount is less than $.005.
29
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS A
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ------------- ----------- ----------- ---------------- -------------
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.09 $ 19.07 $ 26.53 $ 20.83 $ 20.40
------------------------------------------------ ------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income(a) .33 .41 .39 .39 .42
------------------------------------------------ ------- -------- -------- -------- -------
Net realized and unrealized gain (loss) 2.88 ( 7.75) ( 4.61) 7.33 1.96
------------------------------------------------ ------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 3.21 ( 7.34) ( 4.22) 7.72 2.38
------------------------------------------------ ------- -------- -------- -------- -------
Less distributions from:
Net investment income ( .34) ( .46) ( .35) ( .51) ( .65)
------------------------------------------------ ------- -------- -------- -------- -------
Net realized gains - ( .09) ( 2.89) ( 1.51) ( 1.30)
------------------------------------------------ ------- -------- -------- -------- -------
Return of capital - ( .09) - - -
------------------------------------------------ ------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS ( .34) ( .64) ( 3.24) ( 2.02) ( 1.95)
------------------------------------------------ ------- -------- -------- -------- -------
Redemption fee .00* .00* .00* .00* .00*
------------------------------------------------ ------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 13.96 $ 11.09 $ 19.07 $ 26.53 $ 20.83
------------------------------------------------ ------- -------- -------- -------- -------
Total Return (%)(b) 29.98 (39.34) (15.89) 37.73 (c) 11.89
------------------------------------------------ ------- -------- -------- -------- -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 437 384 596 1,205 723
------------------------------------------------ ------- -------- -------- -------- -------
Ratio of expenses before expense reductions (%) 1.04 .94 .97 .91 .80
------------------------------------------------- ------- -------- -------- -------- -------
Ratio of expenses after expense reductions (%) 1.04 .94 .97 .82 .80
------------------------------------------------- ------- -------- -------- -------- -------
Ratio of net investment income (%) 3.13 2.42 1.50 1.62 2.05
------------------------------------------------- ------- -------- -------- -------- -------
Portfolio turnover rate (%) 120(d) 84 81 60 66(d)
------------------------------------------------- ------- -------- -------- -------- -------
(a) Based on average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been
reduced.
(d) Excludes portfolio securities delivered as a result of processing
redemption in-kind transactions.
* Amount is less than $.005.
30
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS B
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ------------- ----------- ----------- ---------------- -------------
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.09 $ 19.04 $ 26.48 $ 20.83 $ 20.40
------------------------------------------------ ------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income(a) .23 .26 .19 .18 .23
------------------------------------------------ ------- -------- -------- -------- -------
Net realized and unrealized gain (loss) 2.96 ( 7.72) ( 4.60) 7.33 1.96
------------------------------------------------ ------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 3.19 ( 7.46) ( 4.41) 7.51 2.19
------------------------------------------------ ------- -------- -------- -------- -------
Less distributions from:
Net investment income ( .23) ( .31) ( .14) ( .35) ( .46)
------------------------------------------------ ------- -------- -------- -------- -------
Net realized gains - ( .09) ( 2.89) ( 1.51) ( 1.30)
------------------------------------------------ ------- -------- -------- -------- -------
Return of capital - ( .09) - - -
------------------------------------------------ ------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS ( .23) ( .49) ( 3.03) ( 1.86) ( 1.76)
------------------------------------------------ ------- -------- -------- -------- -------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------------ ------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 14.05 $ 11.09 $ 19.04 $ 26.48 $ 20.83
------------------------------------------------ ------- -------- -------- -------- -------
Total Return (%)(b) 29.31 (39.71) (16.51) 36.53 (c) 10.84
------------------------------------------------ ------- -------- -------- -------- -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 6 8 20 36 29
------------------------------------------------ ------- -------- -------- -------- -------
Ratio of expenses before expense reductions (%) 2.00 1.82 1.73 1.73 1.72
------------------------------------------------- ------- -------- -------- -------- -------
Ratio of expenses after expense reductions (%) 2.00 1.82 1.73 1.72 1.72
------------------------------------------------- ------- -------- -------- -------- -------
Ratio of net investment income (%) 2.17 1.54 .74 .72 1.13
------------------------------------------------- ------- -------- -------- -------- -------
Portfolio turnover rate (%) 120(d) 84 81 60 66(d)
------------------------------------------------- ------- -------- -------- -------- -------
(a) Based on average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been
reduced.
(d) Excludes portfolio securities delivered as a result of processing
redemption in-kind transactions.
* Amount is less than $.005.
31
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS C
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ------------- ----------- ----------------- ---------------- -------------
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.12 $ 19.10 $ 26.55 $ 20.88 $ 20.44
------------------------------------------------ ------- -------- --------- -------- -------
Income (loss) from investment operations:
Net investment income(a) .24 .27 .20 .20 .26
------------------------------------------------ ------- -------- --------- -------- -------
Net realized and unrealized gain (loss) 2.94 ( 7.75) ( 4.61) 7.35 1.96
------------------------------------------------ ------- -------- --------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 3.18 ( 7.48) ( 4.41) 7.55 2.22
------------------------------------------------ ------- -------- --------- -------- -------
Less distributions from:
Net investment income ( .24) ( .32) ( .15) ( .37) ( .48)
------------------------------------------------ ------- -------- --------- -------- -------
Net realized gains - ( .09) ( 2.89) ( 1.51) ( 1.30)
------------------------------------------------ ------- -------- --------- -------- -------
Return of capital - ( .09) - - -
------------------------------------------------ ------- -------- --------- -------- -------
TOTAL DISTRIBUTIONS ( .24) ( .50) ( 3.04) ( 1.88) ( 1.78)
------------------------------------------------ ------- -------- --------- -------- -------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------------ ------- -------- --------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 14.06 $ 11.12 $ 19.10 $ 26.55 $ 20.88
------------------------------------------------ ------- -------- --------- -------- -------
Total Return (%)(b) 29.26 (39.76) (16.46)(c) 36.67 (c) 11.00
------------------------------------------------ ------- -------- --------- -------- -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ millions) 27 27 60 126 93
------------------------------------------------ ------- -------- --------- -------- -------
Ratio of expenses before expense reductions (%) 1.90 1.78 1.69 1.64 1.61
------------------------------------------------- ------- -------- --------- -------- -------
Ratio of expenses after expense reductions (%) 1.90 1.78 1.69 1.62 1.61
------------------------------------------------- ------- -------- --------- -------- -------
Ratio of net investment income (%) 2.27 1.58 .78 .82 1.24
------------------------------------------------- ------- -------- --------- -------- -------
Portfolio turnover rate (%) 120(d) 84 81 60 66(d)
------------------------------------------------- ------- -------- --------- -------- -------
(a) Based on average shares outstanding during the period.
(b) Total return does not reflect the effect of any sales charges.
(c) Total return would have been lower had certain expenses not been
reduced.
(d) Excludes portfolio securities delivered as a result of processing
redemption in-kind transactions.
* Amount is less than $.005.
32
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF REAL ESTATE SECURITIES FUND - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------------ ------------- ----------- ----------------- ---------------- --------------
SELECTED PER SHARE DATA
------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.09 $ 19.09 $ 26.53 $ 20.81 $ 20.38
------------------------------------------------ ------- -------- --------- -------- --------
Income (loss) from investment operations:
Net investment income(a) .38 .47 .49 .46 .48
------------------------------------------------ ------- -------- --------- -------- --------
Net realized and unrealized gain (loss) 2.86 ( 7.76) ( 4.61) 7.33 1.96
------------------------------------------------ ------- -------- --------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 3.24 ( 7.29) ( 4.12) 7.79 2.44
------------------------------------------------ ------- -------- --------- -------- --------
Less distributions from:
Net investment income ( .38) ( .53) ( .43) ( .56) ( .71)
------------------------------------------------ ------- -------- --------- -------- --------
Net realized gains - ( .09) ( 2.89) ( 1.51) ( 1.30)
------------------------------------------------ ------- -------- --------- -------- --------
Return of capital - ( .09) - - -
------------------------------------------------ ------- -------- --------- -------- --------
TOTAL DISTRIBUTIONS ( .38) ( .71) ( 3.32) ( 2.07) ( 2.01)
------------------------------------------------ ------- -------- --------- -------- --------
Redemption fees .00* .00* .00*() .00*() .00*()
------------------------------------------------ ------- -------- --------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 13.95 $ 11.09 $ 19.09 $ 26.53 $ 20.81
------------------------------------------------ ------- -------- --------- -------- --------
Total Return (%) 30.29 (38.99) (15.50)(b) 38.14 (b) 12.19
------------------------------------------------ ------- -------- --------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DA
------------------------------------------------
Net assets, end of period ($ millions) 440 296 409 720 464
------------------------------------------------ ------- -------- --------- -------- --------
Ratio of expenses before expense reductions (%) .63 .63 .57 .58 .53
------------------------------------------------- ------- -------- --------- -------- --------
Ratio of expenses after expense reductions (%) .63 .63 .56 .54 .53
------------------------------------------------- ------- -------- --------- -------- --------
Ratio of net investment income (%) 3.54 2.73 1.91 1.90 2.32
------------------------------------------------- ------- -------- --------- -------- --------
Portfolio turnover rate (%) 120(c) 84 81 60 66(c)
------------------------------------------------- ------- -------- --------- -------- --------
(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.
* Amount is less than $.005.
33
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS R
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
------------------------------------------ ------------- ----------- ----------- ----------- -------------
SELECTED PER SHARE DATA
------------------------------------------------------------------------------------------------ -
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.11 $ 19.09 $ 26.55 $ 20.83 $ 20.39
------------------------------------------ ------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income(a) .32 .38 .34 .34 .35
------------------------------------------- ------- -------- -------- -------- -------
Net realized and unrealized gain (loss) 2.88 ( 7.76) ( 4.61) 7.34 1.96
------------------------------------------- ------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 3.20 ( 7.38) ( 4.27) 7.68 2.31
------------------------------------------- ------- -------- -------- -------- -------
Less distributions from:
Net investment income ( .31) ( .42) ( .30) ( .45) ( .57)
------------------------------------------- ------- -------- -------- -------- -------
Net realized gains - ( .09) ( 2.89) ( 1.51) ( 1.30)
------------------------------------------- ------- -------- -------- -------- -------
Return of capital - ( .09) - - -
------------------------------------------- ------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS ( .31) ( .60) ( 3.19) ( 1.96) ( 1.87)
------------------------------------------- ------- -------- -------- -------- -------
Redemption fees .00* .00* .00* .00* .00*
------------------------------------------- ------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 14.00 $ 11.11 $ 19.09 $ 26.55 $ 20.83
------------------------------------------- ------- -------- -------- -------- -------
Total Return (%) 29.74 (39.42) (16.00) 37.45 11.51
------------------------------------------- ------- -------- -------- -------- -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------ -------
Net assets, end of period ($ millions) 11 9 16 25 9
------------------------------------------- ------- -------- -------- -------- -------
Ratio of expenses (%) 1.19 1.14 1.14 1.03 1.16
------------------------------------------- ------- -------- -------- -------- -------
Ratio of net investment income (%) 2.98 2.22 1.33 1.41 1.69
------------------------------------------- ------- -------- -------- -------- -------
Portfolio turnover rate (%) 120(b) 84 81 60 66(b)
------------------------------------------- ------- -------- -------- -------- -------
(a) Based on average shares outstanding during the period.
(b) Excludes portfolio securities delivered as a result of processing
redemption in-kind transactions.
* Amount is less than $.005.
34
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS S
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005(A)
------------------------------------------ ------------- ----------- ----------- ----------- -------------
SELECTED PER SHARE DATA
---------------------------------------------------------------------- - - -
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.11 $ 19.11 $ 26.53 $ 20.80 $ 19.81
------------------------------------------ ------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income(b) .36 .44 .44 .41 .29
------------------------------------------- ------- -------- -------- -------- -------
Net realized and unrealized gain (loss) 2.90 ( 7.77) ( 4.60) 7.35 2.45
------------------------------------------- ------- -------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS 3.26 ( 7.33) ( 4.16) 7.76 2.74
------------------------------------------- ------- -------- -------- -------- -------
Less distributions from:
Net investment income ( .36) ( .49) ( .37) ( .52) ( .45)
------------------------------------------- ------- -------- -------- -------- -------
Net realized gains - ( .09) ( 2.89) ( 1.51) ( 1.30)
------------------------------------------- ------- -------- -------- -------- -------
Return of capital - ( .09) - - -
------------------------------------------- ------- -------- -------- -------- -------
TOTAL DISTRIBUTIONS ( .36) ( .67) ( 3.26) ( 2.03) ( 1.75)
------------------------------------------- ------- -------- -------- -------- -------
Redemption fees*** .00 .00 .00 .00 .00
------------------------------------------- ------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 14.01 $ 11.11 $ 19.11 $ 26.53 $ 20.80
------------------------------------------- ------- -------- -------- -------- -------
Total Return (%) 30.34 (39.34) (15.63) 37.98 13.84**
------------------------------------------- ------- -------- -------- -------- -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------- -------- -------- -------
Net assets, end of period ($ millions) 47 174 288 19 2
------------------------------------------- ------- -------- -------- -------- -------
Ratio of expenses (%) .80 .79 .83 .73 .76*
------------------------------------------- ------- -------- -------- -------- -------
Ratio of net investment income (%) 3.37 2.57 1.64 1.71 2.00*
------------------------------------------- ------- -------- -------- -------- -------
Portfolio turnover rate (%) 120(c) 84 81 60 66(c)
------------------------------------------- ------- -------- -------- -------- -------
(a) For the period from May 2, 2005 (commencement of operations of Class
S shares) to December 31, 2005.
(b) Based on average shares outstanding during the period.
(c) Excludes portfolio securities delivered as a result of processing
redemption in-kind transactions.
* Annualized
** Not annualized
*** Amount is less than $.005.
35
PROSPECTUS May 1, 2010 Financial Highlights
APPENDIX
HYPOTHETICAL EXPENSE SUMMARY
Using the annual fund operating expense ratios presented in the fee tables in
the fund prospectus, the Hypothetical Expense Summary shows the estimated fees
and expenses, in actual dollars, that would be charged on a hypothetical
investment of $10,000 in the fund held for the next 10 years and the impact of
such fees and expenses on fund returns for each year and cumulatively, assuming
a 5% return for each year. The historical rate of return for the fund may be
higher or lower than 5% and, for money market funds, is typically less than 5%.
The tables also assume that all dividends and distributions are reinvested and
that Class B shares convert to Class A shares after six years. The annual fund
expense ratios shown are net of any contractual fee waivers or expense
reimbursements, if any, for the period of the contractual commitment. The
tables reflect the maximum initial sales charge, if any, but do not reflect any
contingent deferred sales charge or redemption fees, if any, which may be
payable upon redemption. If contingent deferred sales charges or redemption
fees were shown, the "Hypothetical Year-End Balance After Fees and Expenses"
amounts shown would be lower and the "Annual Fees and Expenses" amounts shown
would be higher. Also, please note that if you are investing through a third
party provider, that provider may have fees and expenses separate from those of
the fund that are not reflected here. Mutual fund fees and expenses fluctuate
over time and actual expenses may be higher or lower than those shown.
The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the fund's prospectus to
consider the investment objectives, risks, expenses and charges of the fund
prior to investing.
DWS COMMUNICATIONS FUND - CLASS A
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
5.75% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 2.05% -2.97% $ 9,703.04 $ 771.06
--- ----- ---- ------ ----------- ----------
2 10.25% 2.05% -0.11% $ 9,989.28 $ 201.85
--- ----- ---- ------ ----------- ----------
3 15.76% 2.05% 2.84% $ 10,283.96 $ 207.80
--- ----- ---- ------ ----------- ----------
4 21.55% 2.05% 5.87% $ 10,587.34 $ 213.93
--- ----- ---- ------ ----------- ----------
5 27.63% 2.05% 9.00% $ 10,899.66 $ 220.24
--- ----- ---- ------ ----------- ----------
6 34.01% 2.05% 12.21% $ 11,221.20 $ 226.74
--- ----- ---- ------ ----------- ----------
7 40.71% 2.05% 15.52% $ 11,552.23 $ 233.43
--- ----- ---- ------ ----------- ----------
8 47.75% 2.05% 18.93% $ 11,893.02 $ 240.31
--- ----- ---- ------ ----------- ----------
9 55.13% 2.05% 22.44% $ 12,243.86 $ 247.40
--- ----- ---- ------ ----------- ----------
10 62.89% 2.05% 26.05% $ 12,605.06 $ 254.70
--- ----- ---- ------ ----------- ----------
TOTAL $ 2,817.46
--- ----------
36
PROSPECTUS May 1, 2010 Appendix
DWS COMMUNICATIONS FUND - CLASS B
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL
FEES AND EXPENSE FEES AND FEES AND FEES AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 3.25% 1.75% $ 10,175.00 $ 327.84
--- ----- ---- ----- ----------- ----------
2 10.25% 3.25% 3.53% $ 10,353.06 $ 333.58
--- ----- ---- ----- ----------- ----------
3 15.76% 3.25% 5.34% $ 10,534.24 $ 339.42
--- ----- ---- ----- ----------- ----------
4 21.55% 3.25% 7.19% $ 10,718.59 $ 345.36
--- ----- ---- ----- ----------- ----------
5 27.63% 3.25% 9.06% $ 10,906.17 $ 351.40
--- ----- ---- ----- ----------- ----------
6 34.01% 3.25% 10.97% $ 11,097.02 $ 357.55
--- ----- ---- ----- ----------- ----------
7 40.71% 2.05% 14.24% $ 11,424.39 $ 230.84
--- ----- ---- ----- ----------- ----------
8 47.75% 2.05% 17.61% $ 11,761.41 $ 237.65
--- ----- ---- ----- ----------- ----------
9 55.13% 2.05% 21.08% $ 12,108.37 $ 244.67
--- ----- ---- ----- ----------- ----------
10 62.89% 2.05% 24.66% $ 12,465.56 $ 251.88
--- ----- ---- ----- ----------- ----------
TOTAL $ 3,020.19
--- ----------
DWS COMMUNICATIONS FUND - CLASS C
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- ------------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE ANNUAL
FEES AND EXPENSE FEES AND AFTER FEES AND FEES AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- ---------------- ------------
1 5.00% 3.00% 2.00% $ 10,200.00 $ 303.00
--- ----- ---- ----- ----------- ----------
2 10.25% 3.00% 4.04% $ 10,404.00 $ 309.06
--- ----- ---- ----- ----------- ----------
3 15.76% 3.00% 6.12% $ 10,612.08 $ 315.24
--- ----- ---- ----- ----------- ----------
4 21.55% 3.00% 8.24% $ 10,824.32 $ 321.55
--- ----- ---- ----- ----------- ----------
5 27.63% 3.00% 10.41% $ 11,040.81 $ 327.98
--- ----- ---- ----- ----------- ----------
6 34.01% 3.00% 12.62% $ 11,261.62 $ 334.54
--- ----- ---- ----- ----------- ----------
7 40.71% 3.00% 14.87% $ 11,486.86 $ 341.23
--- ----- ---- ----- ----------- ----------
8 47.75% 3.00% 17.17% $ 11,716.59 $ 348.05
--- ----- ---- ----- ----------- ----------
9 55.13% 3.00% 19.51% $ 11,950.93 $ 355.01
--- ----- ---- ----- ----------- ----------
10 62.89% 3.00% 21.90% $ 12,189.94 $ 362.11
--- ----- ---- ----- ----------- ----------
TOTAL $ 3,317.77
--- ----------
37
PROSPECTUS May 1, 2010 Appendix
DWS COMMUNICATIONS FUND - CLASS INSTITUTIONAL
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.52% 3.48% $ 10,348.00 $ 154.64
--- ----- ---- ----- ----------- ----------
2 10.25% 1.52% 7.08% $ 10,708.11 $ 160.31
--- ----- ---- ----- ----------- ----------
3 15.76% 1.52% 10.81% $ 11,080.75 $ 165.60
--- ----- ---- ----- ----------- ----------
4 21.55% 1.52% 14.66% $ 11,466.36 $ 171.36
--- ----- ---- ----- ----------- ----------
5 27.63% 1.52% 18.65% $ 11,865.39 $ 177.32
--- ----- ---- ----- ----------- ----------
6 34.01% 1.52% 22.78% $ 12,278.31 $ 183.49
--- ----- ---- ----- ----------- ----------
7 40.71% 1.52% 27.06% $ 12,705.59 $ 189.88
--- ----- ---- ----- ----------- ----------
8 47.75% 1.52% 31.48% $ 13,147.75 $ 196.49
--- ----- ---- ----- ----------- ----------
9 55.13% 1.52% 36.05% $ 13,605.29 $ 203.32
--- ----- ---- ----- ----------- ----------
10 62.89% 1.52% 40.79% $ 14,078.75 $ 210.40
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,812.53
--- ----------
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS A
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
5.75% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.04% -2.02% $ 9,798.23 $ 674.96
--- ----- ---- ------ ----------- ----------
2 10.25% 1.04% 1.86% $ 10,186.24 $ 103.92
--- ----- ---- ------ ----------- ----------
3 15.76% 1.04% 5.90% $ 10,589.62 $ 108.03
--- ----- ---- ------ ----------- ----------
4 21.55% 1.04% 10.09% $ 11,008.96 $ 112.31
--- ----- ---- ------ ----------- ----------
5 27.63% 1.04% 14.45% $ 11,444.92 $ 116.76
--- ----- ---- ------ ----------- ----------
6 34.01% 1.04% 18.98% $ 11,898.14 $ 121.38
--- ----- ---- ------ ----------- ----------
7 40.71% 1.04% 23.69% $ 12,859.13 $ 126.19
--- ----- ---- ------ ----------- ----------
8 47.75% 1.04% 28.59% $ 13,368.35 $ 131.19
--- ----- ---- ------ ----------- ----------
9 55.13% 1.04% 33.68% $ 13,484.53 $ 136.38
--- ----- ---- ------ ----------- ----------
10 62.89% 1.04% 38.98% $ 13,897.74 $ 141.78
--- ----- ---- ------ ----------- ----------
TOTAL $ 1,772.90
--- ----------
38
PROSPECTUS May 1, 2010 Appendix
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS B
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL
FEES AND EXPENSE FEES AND FEES AND FEES AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 2.00% 3.00% $ 10,300.00 $ 203.00
--- ----- ---- ----- ----------- ----------
2 10.25% 2.00% 6.09% $ 10,609.00 $ 209.09
--- ----- ---- ----- ----------- ----------
3 15.76% 2.00% 9.27% $ 10,927.27 $ 215.36
--- ----- ---- ----- ----------- ----------
4 21.55% 2.00% 12.55% $ 11,255.09 $ 221.82
--- ----- ---- ----- ----------- ----------
5 27.63% 2.00% 15.93% $ 11,592.74 $ 228.48
--- ----- ---- ----- ----------- ----------
6 34.01% 2.00% 19.41% $ 11,940.52 $ 235.33
--- ----- ---- ----- ----------- ----------
7 40.71% 1.04% 24.13% $ 12,413.37 $ 126.64
--- ----- ---- ----- ----------- ----------
8 47.75% 1.04% 29.05% $ 12,904.94 $ 131.66
--- ----- ---- ----- ----------- ----------
9 55.13% 1.04% 34.16% $ 13,415.97 $ 136.87
--- ----- ---- ----- ----------- ----------
10 62.89% 1.04% 39.47% $ 13,947.25 $ 142.29
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,850.54
--- ----------
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS C
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.90% 3.10% $ 10,310.00 $ 192.95
--- ----- ---- ----- ----------- ----------
2 10.25% 1.90% 6.30% $ 10,629.61 $ 198.93
--- ----- ---- ----- ----------- ----------
3 15.76% 1.90% 9.59% $ 10,959.13 $ 205.09
--- ----- ---- ----- ----------- ----------
4 21.55% 1.90% 12.99% $ 11,298.86 $ 211.45
--- ----- ---- ----- ----------- ----------
5 27.63% 1.90% 16.49% $ 11,649.13 $ 218.01
--- ----- ---- ----- ----------- ----------
6 34.01% 1.90% 20.10% $ 12,010.25 $ 224.76
--- ----- ---- ----- ----------- ----------
7 40.71% 1.90% 23.83% $ 12,382.57 $ 231.73
--- ----- ---- ----- ----------- ----------
8 47.75% 1.90% 27.66% $ 12,766.43 $ 238.92
--- ----- ---- ----- ----------- ----------
9 55.13% 1.90% 31.62% $ 13,162.18 $ 246.32
--- ----- ---- ----- ----------- ----------
10 62.89% 1.90% 35.70% $ 13,570.21 $ 253.96
--- ----- ---- ----- ----------- ----------
TOTAL $ 2,222.12
--- ----------
39
PROSPECTUS May 1, 2010 Appendix
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS R
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL
FEES AND EXPENSE FEES AND FEES AND FEES AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.34% 3.66% $ 10,366.00 $ 136.45
--- ----- ---- ----- ----------- ----------
2 10.25% 1.34% 7.45% $ 10,745.40 $ 141.45
--- ----- ---- ----- ----------- ----------
3 15.76% 1.34% 11.9% $ 11,138.68 $ 146.92
--- ----- ---- ----- ----------- ----------
4 21.55% 1.34% 15.46% $ 11,546.35 $ 151.99
--- ----- ---- ----- ----------- ----------
5 27.63% 1.34% 19.69% $ 11,968.95 $ 157.55
--- ----- ---- ----- ----------- ----------
6 34.01% 1.34% 24.07% $ 12,407.01 $ 163.32
--- ----- ---- ----- ----------- ----------
7 40.71% 1.34% 28.61% $ 12,861.11 $ 169.30
--- ----- ---- ----- ----------- ----------
8 47.75% 1.34% 33.32% $ 13,331.83 $ 175.49
--- ----- ---- ----- ----------- ----------
9 55.13% 1.34% 38.20% $ 13,819.77 $ 181.92
--- ----- ---- ----- ----------- ----------
10 62.89% 1.34% 43.26% $ 14,325.57 $ 188.57
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,612.66
--- ----------
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS INSTITUTIONAL
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 0.63% 4.37% $ 10,437.00 $ 64.38
--- ----- ---- ----- ----------- --------
2 10.25% 0.63% 8.93% $ 10,893.10 $ 67.19
--- ----- ---- ----- ----------- --------
3 15.76% 0.63% 13.69% $ 11,369.13 $ 70.13
--- ----- ---- ----- ----------- --------
4 21.55% 0.63% 18.66% $ 11,865.96 $ 73.19
--- ----- ---- ----- ----------- --------
5 27.63% 0.63% 23.84% $ 12,384.50 $ 76.39
--- ----- ---- ----- ----------- --------
6 34.01% 0.63% 29.26% $ 12,925.70 $ 79.73
--- ----- ---- ----- ----------- --------
7 40.71% 0.63% 34.91% $ 13,490.55 $ 83.21
--- ----- ---- ----- ----------- --------
8 47.75% 0.63% 40.80% $ 14,080.09 $ 86.85
--- ----- ---- ----- ----------- --------
9 55.13% 0.63% 46.95% $ 14,695.39 $ 90.64
--- ----- ---- ----- ----------- --------
10 62.89% 0.63% 53.38% $ 15,337.58 $ 94.60
--- ----- ---- ----- ----------- --------
TOTAL $ 786.31
--- --------
40
PROSPECTUS May 1, 2010 Appendix
DWS RREEF REAL ESTATE SECURITIES FUND - CLASS S
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 0.80% 4.20% $ 10,420.00 $ 81.68
--- ----- ---- ----- ----------- --------
2 10.25% 0.80% 8.58% $ 10,857.64 $ 85.11
--- ----- ---- ----- ----------- --------
3 15.76% 0.80% 13.14% $ 11,313.66 $ 88.69
--- ----- ---- ----- ----------- --------
4 21.55% 0.80% 17.89% $ 11,788.83 $ 92.41
--- ----- ---- ----- ----------- --------
5 27.63% 0.80% 22.84% $ 12,283.97 $ 96.29
--- ----- ---- ----- ----------- --------
6 34.01% 0.80% 28.00% $ 12,799.89 $ 100.34
--- ----- ---- ----- ----------- --------
7 40.71% 0.80% 33.37% $ 13,337.49 $ 104.55
--- ----- ---- ----- ----------- --------
8 47.75% 0.80% 38.98% $ 13,897.66 $ 108.94
--- ----- ---- ----- ----------- --------
9 55.13% 0.80% 44.81% $ 14,481.36 $ 113.52
--- ----- ---- ----- ----------- --------
10 62.89% 0.80% 50.90% $ 15,089.58 $ 118.28
--- ----- ---- ----- ----------- --------
TOTAL $ 989.81
--- --------
ADDITIONAL INDEX INFORMATION
DWS COMMUNICATIONS FUND
MSCI WORLD INDEX is an unmanaged capitalization-weighted measure of stock
markets around the world, including North America, Europe, Australia and Asia.
Returns reflect reinvestment of dividends net of withholding taxes.
MSCI WORLD TELECOM SERVICES INDEX is an unmanaged index that tracks telecom
securities from around the world. Returns reflect reinvestment of dividends net
of withholding taxes.
DWS RREEF REAL ESTATE SECURITIES FUND
STANDARD & POOR'S 500 INDEX (S&P 500) 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.
MSCI US REIT INDEX (MSCI US REIT) is an unmanaged free float-adjusted market
capitalization weighted index that is comprised of equity REITs that are
included in the MSCI US Investable Market 2500 Index, with the exception of
specialty equity REITs that do not generate a majority of their revenue and
income from real estate rental and leasing operations.
41
PROSPECTUS May 1, 2010 Appendix
TO GET MORE INFORMATION
SHAREHOLDER REPORTS. These include commentary from a fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. They also have detailed performance figures, a list of everything
a fund owns, and its financial statements. Shareholders get these reports
automatically.
STATEMENT OF ADDITIONAL INFORMATION (SAI). This tells you more about a fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
For a free copy of any of these documents or to request other information about
a fund, contact DWS Investments at the phone number or address listed below.
SAIs and shareholder reports are also available through the DWS Investments Web
site at www.dws-investments.com. These documents and other information about
each fund are available from the EDGAR Database on the SEC's Internet site at
www.sec.gov. If you like, you may obtain copies of this information, after
paying a copying fee, by e-mailing a request to publicinfo@sec.gov or by
writing the SEC at the address listed below.
You can also review and copy these documents and other information about each
fund, including each fund's SAI, 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 or (202) 551-8090.
In order to reduce the amount of mail you receive and to help reduce expenses,
we generally send a single copy of any shareholder report and prospectus to
each household. If you do not want the mailing of these documents to be
combined with those for other members of your household, please contact your
financial advisor or call the number provided.
CONTACT INFORMATION
DWS INVESTMENTS PO Box 219151
Kansas City, MO
64121-9151
www.dws-investments.com
Class A, B, C or R: (800) 621-1048
Institutional Class: (800) 730-1313
Class S: (800) 728-3337
SEC 100 F Street, N.E.
Washington, D.C. 20549-1520
WWW.SEC.GOV
(800) SEC-0330
DISTRIBUTOR DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
SEC FILE NUMBER DWS Communications Fund, Inc.
DWS Communications Fund
811-03883
DWS Advisor Funds
DWS RREEF Real Estate Securities
Fund
811-04760
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
(05/01/10) DSECF3-1
[GRAPHIC APPEARS HERE]
PROSPECTUS
MAY 1, 2010
DWS RREEF Global Real Estate Securities Fund
CLASS/TICKER A RRGAX C RRGCX INST RRGIX S RRGTX
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
TABLE OF CONTENTS
DWS RREEF GLOBAL REAL ESTATE
SECURITIES FUND
Investment Objective........................... 1
Fees and Expenses of the Fund.................. 1
Principal Investment Strategy.................. 2
Main Risks..................................... 2
Past Performance............................... 3
Management..................................... 4
Purchase and Sale of Fund Shares............... 4
Tax Information................................ 4
Payments to Broker-Dealers and
Other Financial Intermediaries................. 4
FUND DETAILS
Other Policies and Risks....................... 5
Who Manages and Oversees the Fund.............. 6
Management..................................... 7
INVESTING IN THE FUND
Choosing a Share Class......................... 8
Buying, Exchanging and Selling Shares.......... 11
How to Buy Shares.............................. 11
How to Exchange Shares......................... 12
How to Sell Shares............................. 13
Financial Intermediary Support Payments........ 13
Policies You Should Know About................. 14
Policies About Transactions.................... 14
How the Fund Calculates Share Price............ 19
Other Rights We Reserve........................ 19
Understanding Distributions and Taxes.......... 19
FINANCIAL HIGHLIGHTS........................... 22
APPENDIX....................................... 26
Hypothetical Expense Summary................... 26
Additional Index Information................... 28
-------------------------------------------------------------------------------
YOUR INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY,
ENTITY OR PERSON.
-------------------------------------------------------------------------------
[DWS INVESTMENTS LOGO]
Deutsche Bank Group
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND
INVESTMENT OBJECTIVE
The fund's investment objective is to seek total return through a combination
of current income and long-term capital appreciation.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares. You may qualify
for sales charge discounts if you and your immediate family invest, or agree to
invest in the future, at least $50,000 in DWS funds. More information about
these and other discounts is available from your financial professional and in
Choosing a Share Class (p. 8) and Purchase and Redemption of Shares in the
fund's Statement of Additional Information (SAI) (p. II-10).
SHAREHOLDER FEES (paid directly from your investment)
A C INST S
------------ --------- --------- ---------
Maximum sales charge (load) on purchases,
as % of offering price 5.75 None None None
------------------------------------------- ---- -- -- --
Maximum contingent deferred sales charge
(load), as % of redemption proceeds None(1) 1.00 None None
------------------------------------------- -------- ---- -- --
Redemption/exchange fee on shares owned
less than 15 days, as % of redemption pro-
ceeds 2.00 2.00 2.00 2.00
------------------------------------------- -------- ---- ---- ----
ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a % of the
value of your investment)
A C INST S
--------- --------- ---------- ----------
Management fee 1.00 1.00 1.00 1.00
------------------------------------------- ---- ---- ---- ----
Distribution/service
(12b-1) fees 0.24 1.00 None None
------------------------------------------- ---- ---- ----- -----
Other expenses (includes an administrative
fee) 0.51 0.56 0.24 0.83
------------------------------------------- ---- ---- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.75 2.56 1.24 1.83
------------------------------------------- ---- ---- ----- -----
Less expense waiver/reimbursement 0.09 0.15 0.00 0.42
------------------------------------------- ---- ---- ----- -----
NET ANNUAL FUND OPERATING EXPENSES 1.66 2.41 1.24 1.41
------------------------------------------- ---- ---- ----- -----
(1) Investments of $1 million or more may be eligible to buy Class A shares
without a sales charge (load), but may be subject to a contingent
deferred sales charge of 1.00% if redeemed within 12 months of purchase
and 0.50% if redeemed within the following six months.
The Advisor has contractually agreed through April 30, 2011, to waive and/or
reimburse fund expenses to the extent necessary to maintain the fund's total
annual operating expenses at a ratio no higher than 1.66%, 2.41% and 1.41% for
Class A, Class C and Class S shares, respectively. The agreement may only be
terminated with the consent of the fund's Board and does not extend to
extraordinary expenses, taxes, brokerage and interest expense.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
(including one year of capped expenses for Class A, Class C and Class S shares)
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
YEARS A C INST S
------- -------- -------- -------- --------
1 $ 734 $ 344 $ 126 $ 144
-- ----- ----- ----- -----
3 1,086 782 393 535
-- ----- ----- ----- -----
5 1,461 1,347 681 951
-- ----- ----- ----- -----
10 2,512 2,884 1,500 2,114
-- ----- ----- ----- -----
You would pay the following expenses if you did not redeem your shares:
YEARS A C INST S
------- -------- -------- -------- --------
1 $ 734 $ 244 $ 126 $ 144
-- ----- ----- ----- -----
3 1,086 782 393 535
-- ----- ----- ----- -----
5 1,461 1,347 681 951
-- ----- ----- ----- -----
10 2,512 2,884 1,500 2,114
-- ----- ----- ----- -----
1
PROSPECTUS May 1, 2010 DWS RREEF Global Real Estate Securities Fund
PORTFOLIO TURNOVER
The fund pays transaction costs when it buys and sells securities (or "turns
over" its portfolio). A higher portfolio turnover may indicate higher
transaction costs and may mean higher taxes if you are investing in a taxable
account. These costs are not reflected in annual fund operating expenses or in
the expense example, but are reflected in fund performance.
Portfolio turnover rate for fiscal year 2009: 114%.
PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal circumstances, the fund will invest at least 80%
of its net assets, plus the amount of any borrowing for investment purposes
(calculated at the time of any investment), in the equity securities of real
estate investment trusts (REITs) and real estate operating companies listed on
recognized stock exchanges around the world. A security is eligible for
investment if (i) the issuer of the security has a market capitalization of at
least $50 million and, in the opinion of portfolio management, at least 50% of
its revenues or 50% of the market value of its assets at the time of purchase
are attributed to the ownership, construction, management or sale of real
estate; and (ii) it is listed on a recognized public foreign or domestic stock
exchange or traded over the counter. The fund may also invest in unlisted
securities that are expected to be listed on a recognized public stock exchange
or traded over the counter within six months from the time of investment.
The fund's equity investments are mainly common stocks, but may also include
other types of equities, such as preferred or convertible stocks. Currently,
the fund does not intend to borrow for investment purposes.
The fund may also invest a portion of its assets in other types of securities.
These securities may include short-term securities, bonds, notes, securities of
companies not principally engaged in the real estate industry, non-leveraged
stock index futures contracts and other similar securities. Stock index futures
contracts, a type of derivative security, can help the fund's cash assets
remain liquid while performing more like stocks. The fund has a policy
governing stock index futures and other derivatives, which prohibits leverage
of the fund's assets by investing in a derivative security. In addition, while
the fund does not currently plan to hedge foreign currency risk, the fund may
engage in foreign currency transactions, including foreign currency forward
contracts, options, swaps and other similar transactions, in connection with
its investments in securities of foreign companies.
MANAGEMENT PROCESS. The fund seeks to take advantage of the extensive expertise
of its investment advisor's and its affiliates' dedicated, in-house direct real
estate investment teams located in the United States, Europe, Asia and
Australia.
In choosing securities, portfolio management uses a combination of two
analytical disciplines:
TOP-DOWN RESEARCH. Portfolio management analyzes market-wide investment
conditions to arrive at the fund's weighting across regional markets (i.e., the
portfolio weighting across investments in the Americas, Europe, Asia and
Australia), and, within these regions, its strategy across investment sectors,
such as office, industrial, retail, hospitality and residential apartment real
estate sectors. The research includes analysis of various factors, including
real estate market dynamics (such as supply/demand conditions), the economic
environment (such as interest rates, inflation and economic growth), expected
capital flow dynamics and exchange rate conditions.
BOTTOM-UP RESEARCH. Portfolio management analyzes characteristics and
investment prospects of a particular security relative to others in its local
market to actively manage the fund's exposure to individual securities within
each region. Disciplined valuation analysis drives this decision-making
process, guiding portfolio management to invest in securities they believe can
provide superior returns over the long-term, and to sell those that they
believe no longer represent the strongest prospects. The fund's security
selection strategy focuses on identifying securities that have the potential
for price appreciation and pay attractive, reliable dividends. It is expected
that the majority of the fund's returns will be generated by security-specific
investment decisions, which are the responsibility of portfolio managers
located in the respective geographical regions.
The Global Property Asset Allocation Committee of the investment advisor and
its affiliates, which is comprised of the portfolio managers from each region
and chaired by the lead portfolio manager for global real estate security
investments, determines the allocation of the fund's investments across
geographic regions.
--------------------------------------------------------------------------------
SECURITIES LENDING. The fund may lend securities (up to one-third of total
assets) to approved institutions.
--------------------------------------------------------------------------------
MAIN RISKS
There are several risk factors that could hurt the fund's performance, cause
you to lose money or cause the fund's performance to trail that of other
investments.
STOCK MARKET RISK. When stock prices fall, you should expect the value of your
investment to fall as well. Stock prices can be hurt by poor management on the
part of the stock's issuer, shrinking product demand and other business risks.
These may affect single companies as well as groups of companies. In addition,
movements in financial markets may adversely affect a stock's price, regardless
of how well the company performs.
FOREIGN INVESTMENT RISK. To the extent the fund invests in companies based
outside the US, it faces the risks inherent in foreign investing. Adverse
political, economic or social developments could undermine the value of the
2
PROSPECTUS May 1, 2010 DWS RREEF Global Real Estate Securities Fund
fund's investments or prevent the fund from realizing their full value.
Financial reporting standards for companies based in foreign markets differ
from those in the US. Additionally, foreign securities markets generally are
smaller and less liquid than US markets. To the extent that the fund invests in
non-US dollar denominated foreign securities, changes in currency exchange
rates may affect the US dollar value of foreign securities or the income or
gain received on these securities. Foreign governments may restrict investment
by foreigners, limit withdrawal of trading profit or currency from the country,
restrict currency exchange or seize foreign investments. The investments of the
fund may also be subject to foreign withholding taxes. Foreign transactions and
custody of assets may involve delays in payment, delivery or recovery of money
or investments. Foreign investment risks are greater in emerging markets than
in developed markets. Emerging market investments are often considered
speculative. Emerging market countries typically have economic and political
systems that are less developed, and can be expected to be less stable than
developed markets. For example, the economies of such countries can be subject
to rapid and unpredictable rates of inflation or deflation.
CONCENTRATION RISK - REAL ESTATE SECURITIES. Any fund that concentrates in a
particular segment of the market will generally be more volatile than a fund
that invests more broadly. Any market price movements, regulatory or
technological changes, or economic conditions affecting real estate securities,
including REITs, will have a significant impact on the fund's performance. In
particular, real estate companies can be affected by the risks associated with
direct ownership of real estate, such as general or local economic conditions,
increases in property taxes and operating expenses, liability or losses owing
to environmental problems, falling rents (whether owing to poor demand,
increased competition, overbuilding, or limitations on rents), zoning changes,
rising interest rates, and losses from casualty or condemnation. In addition,
many real estate companies, including REITs, utilize leverage (and some may be
highly leveraged), which increases investment risk. Further, REITs are
dependent upon management skills and may not be diversified.
SECURITY SELECTION RISK. The securities in the fund's portfolio may decline in
value. Portfolio management could be wrong in its analysis of industries,
companies, economic trends, the relative attractiveness of different securities
or other matters.
DERIVATIVES RISK. Risks associated with derivatives include the risk that the
derivative is not well correlated with the security, index or currency to which
it relates; the risk that derivatives may result in losses or missed
opportunities; the risk that the fund will be unable to sell the derivative
because of an illiquid secondary market; the risk that a counterparty is
unwilling or unable to meet its obligation; and the risk that the derivative
transaction could expose the fund to the effects of leverage, which could
increase the fund's exposure to the market and magnify potential losses. There
is no guarantee that derivatives, to the extent employed, will have the
intended effect, and their use could cause lower returns or even losses to the
fund. The use of derivatives by the fund to hedge risk may reduce the
opportunity for gain by offsetting the positive effect of favorable price
movements.
PRICING RISK. If market conditions make it difficult to value some investments,
the fund may value these investments using more subjective methods, such as
fair value pricing. In such cases, the value determined for an investment could
be different than the value realized upon such investment's sale. As a result,
you could pay more than the market value when buying fund shares or receive
less than the market value when selling fund shares.
SECURITIES LENDING RISK. Any decline in the value of a portfolio security that
occurs while the security is out on loan is borne by the fund, and will
adversely affect performance. Also, there may be delays in recovery of
securities loaned or even a loss of rights in the collateral should the
borrower of the securities fail financially while holding the security.
More information about fund risks, including additional risk factors not
discussed above, is included in Fund Details and the fund's SAI.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk; so
can comparing fund performance to overall market performance (as measured by an
appropriate market index). Past performance may not indicate future results.
All performance figures below assume that dividends were reinvested. For more
recent performance figures, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
CALENDAR YEAR TOTAL RETURNS (%) (Class A)
These year-by-year returns do not include sales charges, and would be lower if
they did. Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
-7.84 -48.64 36.71
2007 2008 2009
Best Quarter: 35.70%, Q2 2009 Worst Quarter: -32.67%, Q4 2008
Year-to-Date as of 3/31/10: 2.98%
AVERAGE ANNUAL TOTAL RETURNS
(For periods ended 12/31/2009 expressed as a %)
These returns include sales charges, if any. Indexes have no sales charges and
cannot be invested in directly. After-tax returns (which are shown only for
Class A and would
3
PROSPECTUS May 1, 2010 DWS RREEF Global Real Estate Securities Fund
be different for other classes) reflect the historical highest individual
federal income tax rates, but do not reflect any state or local taxes. Your
actual after-tax returns may be different. After-tax returns are not relevant
to shares held in an IRA, 401(k) or other tax-advantaged investment plan.
CLASS 1 SINCE
INCEPTION YEAR INCEPTION
----------- ---------- ----------
CLASS A before tax 7/5/06 28.85 -7.62
------------------------- ------ ----- ------
After tax on
distributions 24.96 -9.22
After tax on distribu-
tions, with sale 18.85 -7.11
------------------------- ------ ----- ------
CLASS C before tax 7/5/06 35.68 -6.87
------------------------- ------ ----- ------
INST CLASS before tax 7/5/06 37.07 -5.74
------------------------- ------ ----- ------
CLASS S before tax 7/5/06 37.13 -5.81
------------------------- ------ ----- ------
THE FTSE EPRA/NAREIT
DEVELOPED INDEX 38.26 -4.76
------------------------- ------ ----- ------
Index comparison begins on June 30, 2006.
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
SUBADVISOR:
RREEF America L.L.C.
SUB-SUBADVISORS:
RREEF Global Advisors Limited, Deutsche Asset Management (Hong Kong) Limited
and Deutsche Investments Australia Limited.
PORTFOLIO MANAGER(S)
JOHN F. ROBERTSON, CFA, MANAGING DIRECTOR. Lead Portfolio Manager of the fund.
Joined the fund in 2006.
DANIEL EKINS, MANAGING DIRECTOR. Portfolio Manager of the fund. Joined the fund
in 2006.
JOHN HAMMOND, MANAGING DIRECTOR. Portfolio Manager of the fund. Joined the fund
in 2006.
WILLIAM LEUNG, DIRECTOR. Portfolio Manager of the fund. Joined the fund in
2006.
JOHN W. VOJTICEK, MANAGING DIRECTOR. Portfolio Manager of the fund. Joined the
fund in 2006.
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT ($)
AUTOMATIC
UGMAS/ INVESTMENT
NON-IRA IRAS UTMAS PLANS
------------ -------------- -------- ------------------
A C 1,000 500 1,000 500
------ ----- --- ----- ---
INST 1,000,000 N/A N/A N/A
------ --------- ---- ----- ----
S 2,500 1,000 1,000 1,000
------ --------- ----- ----- -----
For participants in certain fee-based and wrap programs offered through certain
financial intermediaries approved by the Advisor, there is no minimum initial
investment for Class A, C and S shares and no minimum additional investment for
Class A and Class S shares. Institutional Class shares also have no additional
investment minimum. The minimum additional investment for all other instances
is $50. The maximum Automatic Investment Plan investment is $250,000.
TO PLACE ORDERS
MAIL First Investment DWS Investments, PO Box 219356
Kansas City, MO 64121-9356
Additional Investments DWS Investments, PO Box 219154
Kansas City, MO 64121-9154
Exchanges and DWS Investments, PO Box 219557
Redemptions Kansas City, MO 64121-9557
EXPEDITED MAIL DWS Investments, 210 West 10th Street
Kansas City, MO 64105-1614
WEB SITE www.dws-investments.com
TELEPHONE Class A or C shares: (800) 621-1048
Class S shares: (800) 728-3337
M - F 9 a.m. - 6 p.m. ET
Institutional Class shares: (800) 730-1313
M - F 8:30 a.m. - 6 p.m. ET
TDD LINE (800) 728-3006, M - F 9 a.m. - 6 p.m. ET
You can buy or sell shares of the fund on any business day at our web site, by
mail, or by telephone. The fund is generally open on days when the New York
Stock Exchange is open for regular trading.
Institutional Class shares are generally available only to qualified
institutions.
TAX INFORMATION
The fund's distributions (dividend and capital gains distributions are expected
to be paid annually) are generally taxable to you as ordinary income or capital
gains, except when your investment is in an IRA, 401(k), or other tax-deferred
investment plan.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
4
PROSPECTUS May 1, 2010 DWS RREEF Global Real Estate Securities Fund
FUND DETAILS
OTHER POLICIES AND RISKS
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other matters to know about:
o Although major changes tend to be infrequent, the fund's Board could change
the fund's investment objective without seeking shareholder approval. In
addition, the Board will provide shareholders with at least 60 days' notice
prior to making any changes to the fund's 80% investment policy as
described herein.
o When in the Advisor's opinion it is advisable to adopt a temporary defensive
position because of unusual and adverse or other market conditions, up to
100% of the fund's assets may be held in cash or invested in money market
securities or other short-term investments. Short-term investments consist
of (1) foreign and domestic obligations of sovereign governments and their
agencies and instrumentalities, authorities and political subdivisions; (2)
other short-term investment-grade rated debt securities or, if unrated,
determined to be of comparable quality in the opinion of the Advisor; (3)
commercial paper; (4) bank obligations, including negotiable certificates
of deposit, time deposits and bankers' acceptances; and (5) repurchase
agreements. Short-term investments may also include shares of money market
mutual funds. This could prevent losses, but, while engaged in a temporary
defensive position, the fund will not be pursuing its investment objective.
However, portfolio management may choose not to use these strategies for
various reasons, even in volatile market conditions.
o The fund may trade actively. This could raise transaction costs (thus
lowering return) and could mean increased taxable distributions to
shareholders and distributions that will be taxable to shareholders at
higher federal income tax rates.
o Certain DWS fund-of-funds are permitted to invest in the fund. As a result,
the fund may have large inflows or outflows of cash from time to time. This
could have adverse effects on the fund's performance if the fund were
required to sell securities or invest cash at times when it otherwise would
not do so. This activity could also accelerate the realization of capital
gains and increase the fund's transaction costs.
Additional risks listed below are in alphabetical order.
COUNTERPARTY RISK. A financial institution or other counterparty with whom the
fund does business (such as trading or securities lending), or that
underwrites, distributes or guarantees any investments or contracts that the
fund owns or is otherwise exposed to, may decline in financial health and
become unable to honor its commitments. This could cause losses for the fund or
could delay the return or delivery of collateral or other assets to the fund.
LIQUIDITY RISK. In certain situations, it may be difficult or impossible to
sell an investment in an orderly fashion at an acceptable price. This risk can
be ongoing for any security that does not trade actively or in large volumes,
for any security that trades primarily on smaller markets, and for investments
that typically trade only among a limited number of large investors (such as
certain types of derivatives or restricted securities). In unusual market
conditions, even normally liquid securities may be affected by a degree of
liquidity risk. This may affect only certain securities or an overall
securities market.
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to
request a copy of the Statement of Additional Information (the back cover tells
you how to do this).
Keep in mind that there is no assurance that the fund will achieve its
investment objective.
A complete list of the fund's portfolio holdings as of the month-end is posted
on www.dws-investments.com on or about the 15th day of the following month.
More frequent posting of portfolio holdings information may be made from time
to time on www.dws-investments.com. The posted portfolio holdings information
is available by fund and generally remains accessible at least until the date
on which the fund files its Form N-CSR or N-Q with the Securities and Exchange
Commission for the period that includes the date as of which the posted
information is current. The fund's Statement of Additional Information includes
a description of the fund's policies and procedures with respect to the
disclosure of the fund's portfolio holdings.
5
PROSPECTUS May 1, 2010 Fund Details
WHO MANAGES AND OVERSEES THE FUND
THE INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), with
headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor
for the fund. Under the oversight of the Board, the Advisor or a subadvisor
makes investment decisions, buys and sells securities for the fund and conducts
research that leads to these purchase and sale decisions. The Advisor provides
a full range of global investment advisory services to institutional and retail
clients.
DWS Investments is part of the Asset Management division of Deutsche Bank AG
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.
MANAGEMENT FEE. The Advisor receives a management fee from the fund. Below is
the actual rate paid by the fund for the most recent fiscal year, as a
percentage of the fund's average daily net assets.
FUND NAME FEE PAID
----------------------- ------------
DWS RREEF Global Real
Estate Securities Fund 0.93%*
------------------------ ----
* Reflecting the effect of expense limitations and/or fee waivers then in
effect.
Through September 30, 2010, the Advisor has contractually agreed to waive
and/or reimburse fund expenses to the extent necessary to maintain the fund's
total annual operating expenses at 1.41% for Institutional Class shares. The
agreement may only be terminated with the consent of the fund's Board and does
not extend to extraordinary expenses, taxes, brokerage and interest, or certain
other expenses.
Through September 30, 2010, the Advisor has contractually agreed to waive a
portion of its management fee in the amount of 0.20% of the Fund's average
daily net assets.
The Advisor has voluntarily agreed to waive and/or reimburse fund expenses to
the extent necessary to maintain the fund's total annual operating expenses at
1.50%, 2.25%, 1.35% and 1.25% for Class A, Class C, Class S and Institutional
Class shares, respectively. The Advisor, at its discretion, may revise or
discontinue this arrangement at any time and it does not extend to
extraordinary expenses, taxes, brokerage and interest expense.
A discussion regarding the basis for the Board's approval of the fund's
investment management agreement, subadvisory agreement and sub-subadvisory
agreements is contained in the most recent shareholder report for the annual
period ended December 31 (see "Shareholder reports" on the back cover).
Under a separate administrative services agreement between the fund and the
Advisor, the fund pays the Advisor a fee of 0.10% for providing most of the
fund's administrative services.
MULTI-MANAGER STRUCTURE. The Advisor, subject to the approval of the Board, has
ultimate responsibility to recommend the hiring, termination and replacement of
subadvisors. The fund and the Advisor have received an order from the SEC that
allows the fund and the Advisor to utilize a multi-manager structure in
managing the fund's assets. Pursuant to the SEC order, the Advisor, with the
approval of the fund's Board, is permitted to select subadvisors that are not
affiliates of the Advisor ("non-affiliated subadvisors") to manage all or a
portion of the fund's assets without obtaining shareholder approval. The
Advisor also has the discretion to terminate any subadvisor and allocate and
reallocate the fund's assets among any non-affiliated subadvisors. The SEC
order also permits the Advisor, subject to the approval of the Board, to
materially amend an existing subadvisory agreement with a non-affiliated
subadvisor without shareholder approval. The fund and the Advisor are subject
to the conditions imposed by the SEC order, including the condition that within
90 days of hiring of a new non-affiliated subadvisor, the fund will provide
shareholders with an information statement containing information about the new
non-affiliated subadvisor. The fund cannot rely on the SEC order until
shareholders have approved the operation of the fund in the manner described in
this paragraph.
The fund and the Advisor have also filed an exemptive application with the SEC
requesting an order that would extend the relief granted with respect to
non-affiliated subadvisors to certain subadvisors that are affiliates of the
Advisor ("affiliated subadvisors"). If such relief is granted by the SEC, the
Advisor, with the approval of the fund's Board, would be able to hire
non-affiliated and/or affiliated subadvisors to manage all or a portion of the
fund's assets without obtaining shareholder approval. The Advisor would also
have the discretion to terminate any subadvisor and allocate and reallocate the
fund's assets among any other subadvisors (including terminating a
non-affiliated subadvisor and replacing them with an affiliated subadvisor).
The Advisor, subject to the approval of the Board, would also be able to
materially amend an existing
6
PROSPECTUS May 1, 2010 Fund Details
subadvisory agreement with any such subadvisor without shareholder approval.
There can be no assurance that such relief will be granted by the SEC. The fund
and the Advisor will be subject to any new conditions imposed by the SEC. The
fund would not be able to rely on such relief with respect to the hiring and
replacement of affiliated subadvisors until shareholders have approved the
operation of the fund in the manner described in this paragraph.
SUBADVISOR FOR THE FUND
RREEF America L.L.C. ("RREEF"), an indirect, wholly owned subsidiary of
Deutsche Bank AG, is the subadvisor for the fund. RREEF, a registered
investment advisor, is located at 875 N. Michigan Avenue, Chicago, Illinois
60611. DIMA pays a fee to RREEF pursuant to an investment subadvisory agreement
between DIMA and RREEF.
RREEF makes the investment decisions, buys and sells securities for the fund
and conducts research that leads to these purchase and sale decisions.
RREEF has provided real estate investment management services to institutional
investors since 1975 across a diversified portfolio of industrial properties,
office buildings, residential apartments and shopping centers. RREEF has also
been an investment advisor of real estate securities since 1993.
THE SUB-SUBADVISORS
Pursuant to investment subadvisory agreements between RREEF and each of RREEF
Global Advisers Limited, Deutsche Asset Management (Hong Kong) Limited and
Deutsche Investments Australia Limited (the "sub-subadvisors"), these entities
act as sub-subadvisors to the fund. The sub-subadvisors, which are indirect,
wholly owned subsidiaries of Deutsche Bank AG, act under the supervision of the
Board, DIMA and RREEF and manage the fund's investments in specific foreign
markets. Through the Global Property Asset Allocation Committee, RREEF
allocates, and reallocates as it deems appropriate, the fund's assets among the
sub-subadvisors. RREEF pays a fee to each sub-subadvisor pursuant to the
investment subadvisory agreement between RREEF and each sub-subadvisor.
RREEF Global Advisers Limited, Winchester House, 1 Great Winchester Street,
London, United Kingdom, EC2N 2DB, will evaluate stock selections for the
European portion of the fund's assets. Deutsche Asset Management (Hong Kong)
Limited, 48/F Cheung Kong Center, 2 Queen's Road Central, Hong Kong, China, and
Deutsche Investments Australia Limited, Level 16, Deutsche Bank Place, Cnr
Hunter & Phillip Streets, Sydney, Australia, NSW, 2000, will evaluate stock
selections for the Asian and Australian portions of the fund's assets,
respectively.
MANAGEMENT
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND
JOHN F. ROBERTSON, CFA, MANAGING DIRECTOR. Lead Portfolio Manager of the fund.
Joined the fund in 2006.
o Joined RREEF in 1997, Deutsche Asset Management in 2002; previously was an
Assistant Vice President of Lincoln Investment Management responsible for
REIT research.
o Global Head of RREEF Real Estate Securities with over 18 years of investment
industry experience.
o BA, Wabash College; MBA, Indiana University.
DANIEL EKINS, MANAGING DIRECTOR. Portfolio Manager of the fund. Joined the fund
in 2006.
o Joined RREEF in 1997, Deutsche Asset Management in 2002.
o Over 23 years of investment industry experience.
o BS, University of South Australia.
JOHN HAMMOND, MANAGING DIRECTOR. Portfolio Manager of the fund. Joined the fund
in 2006.
o Joined RREEF and Deutsche Asset Management in 2004; previously was Director
at Schroder Property Investment Management and Director at Henderson Global
Investors.
o Over 17 years of investment industry experience.
o BSc, University of Reading, UK.
WILLIAM LEUNG, DIRECTOR. Portfolio Manager of the fund. Joined the fund in
2006.
o Joined Deutsche Asset Management in 2000; previously was an equity research
analyst focusing on Hong Kong and China at Merrill Lynch and UBS Warburg.
o Over 12 years of investment industry experience.
o MBA, Hong Kong University of Science & Technology.
JOHN W. VOJTICEK, MANAGING DIRECTOR. Portfolio Manager of the fund. Joined the
fund in 2006.
o Joined RREEF and Deutsche Asset Management in 2004; previously worked for
Principal at KG Redding and Associates, March 2004-September 2004 and
Managing Director of RREEF from 1996-March 2004 and Deutsche Asset
Management from 2002-March 2004.
o Over 13 years of investment industry experience.
o BS, University of Southern California.
The fund's Statement of Additional Information provides additional information
about a portfolio manager's investments in the fund, a description of the
portfolio management compensation structure and information regarding other
accounts managed.
7
PROSPECTUS May 1, 2010 Fund Details
INVESTING IN THE FUND
This prospectus offers the share classes noted on the front cover. Each class
has its own fees and expenses, offering you a choice of cost structures:
o CLASS A AND C SHARES are intended for investors seeking the advice and
assistance of a financial advisor, who will typically receive compensation
for those services.
o INSTITUTIONAL CLASS SHARES AND CLASS S SHARES are only available to
particular investors or through certain programs, as described below.
The following pages tell you how to invest in the fund and what to expect as a
shareholder. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.
If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.
You can find out more about the topics covered here by speaking with your
financial advisor or a representative of your workplace retirement plan or
other investment provider.
CHOOSING A SHARE CLASS
Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you.
We describe each share class in detail on the following pages. But first, you
may want to look at the following table, which gives you a brief description
and comparison of the main features of each class. You should consult with your
financial advisor to determine which class of shares is appropriate for you.
CLASSES AND FEATURES POINTS TO HELP YOU COMPARE
CLASS A
o Sales charge of up to 5.75% o Some investors may be able to
charged when you buy shares reduce or eliminate their sales
charge; see "Class A shares"
o In most cases, no charge
when you sell shares o Total annual expenses are
lower than those for Class C
o Up to 0.25% annual share-
holder servicing fee o Distributions are generally
higher than Class C
CLASS C
o No sales charge when you o Unlike Class A shares, Class C
buy shares shares do not have a sales
charge when buying shares,
o Deferred sales charge of but have higher annual
1.00%, charged when you sell expenses than those for Class
shares you bought within the A shares and a one year
last year deferred sales charge
o 0.75% annual distribution
fee o Distributions are generally
and up to 0.25% annual share- lower than Class A
holder servicing fee
o Maximum investment of
$500,000
INSTITUTIONAL CLASS
o No sales charge when you o Only available to certain institu-
buyshares and no deferred sales tional investors; typically
charge when you sell shares $1,000,000 minimum initial
investment
o Distributions are generally
higher than Class A and C, and
may be higher than Class S,
depending on relative expenses
CLASS S
o No sales charge when you o Limited availability, see "Eligibil-
buy shares and no deferred sales ity Requirements" under
charge when you sell shares "Class S Shares"
Your financial advisor will typically be paid a fee when you buy shares and may
receive different levels of compensation depending upon which class of shares
you buy. The fund may pay financial advisors or other intermediaries
compensation for the services they provide to their clients. This compensation
may vary depending on the share class and fund you buy. Your financial advisor
may also receive compensation from the Advisor and/or its affiliates. Please
see "Financial intermediary support payments" for more information.
CLASS A SHARES
Class A shares may make sense for long-term investors, especially those who are
eligible for a reduced or eliminated sales charge.
8
PROSPECTUS May 1, 2010 Investing in the Fund
Class A shares have a 12b-1 plan, under which a shareholder servicing fee of up
to 0.25% is deducted from class assets each year. Because the shareholder
servicing fee is continuous in nature, it may, over time, increase the cost of
your investment and may cost you more than paying other types of sales charges.
Class A shares have an up-front sales charge that varies with the amount you
invest:
FRONT-END SALES FRONT-END SALES
CHARGE AS % CHARGE AS % OF YOUR
YOUR INVESTMENT OF OFFERING PRICE(1,2) NET INVESTMENT(2)
-------------------- ------------------------ --------------------
Under $50,000 5.75% 6.10%
-------------------- ----- -----
$ 50,000-$99,999 4.50 4.71
----------------- ----- -----
$100,000-$249,999 3.50 3.63
----------------- ----- -----
$250,000-$499,999 2.60 2.67
----------------- ----- -----
$500,000-$999,999 2.00 2.04
----------------- ----- -----
$1 million or more see below see below
-------------------- ------------------------ --------------------
(1) The "offering price", the price you pay to buy shares, includes the sales
charge which will be deducted directly from your investment.
(2) Because of rounding in the calculation of the offering price, the actual
front-end sales charge paid by an investor may be higher or lower than
the percentages noted.
YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:
o you indicate your intent in writing to invest at least $50,000 in Class A
shares (including Class A shares in other retail DWS funds) over the next
24 months (Letter of Intent)
o the amount of Class A shares you already own (including Class A shares in
other retail DWS funds) plus the amount you're investing now in Class A
shares is at least $50,000 (Cumulative Discount)
o you are investing a total of $50,000 or more in Class A shares of several
retail DWS funds on the same day (Combined Purchases)
The point of these three features is to let you count investments made at other
times or in certain other funds for purposes of calculating your present sales
charge. Any time you can use the privileges to "move" your investment into a
lower sales charge category, it's generally beneficial for you to do so.
For purposes of determining whether you are eligible for a reduced Class A
sales charge, you and your immediate family (your spouse or life partner and
your children or stepchildren age 21 or younger) may aggregate your investments
in the DWS family of funds. This includes, for example, investments held in a
retirement account, an employee benefit plan or at a financial advisor other
than the one handling your current purchase. These combined investments will be
valued at their current offering price to determine whether your current
investment qualifies for a reduced sales charge.
To receive a reduction in your Class A initial sales charge, you must let your
financial advisor or Shareholder Services know at the time you purchase shares
that you qualify for such a reduction. You may be asked by your financial
advisor or Shareholder Services to provide account statements or other
information regarding related accounts of you or your immediate family in order
to verify your eligibility for a reduced sales charge.
For more information about sales charge discounts, please visit
www.dws-investments.com (click on the link entitled "Fund Sales Charge and
Breakpoint Schedule"), consult with your financial advisor or refer to the
section entitled "Purchase or Redemption of Shares" in the fund's Statement of
Additional Information.
IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES WITHOUT A SALES
CHARGE. For example, the sales charge will be waived if you are reinvesting
dividends or distributions or if you are exchanging an investment in Class A
shares of another fund in the DWS family of funds for an investment in Class A
shares of the fund. In addition, a sales charge waiver may apply to
transactions by certain retirement plans and certain other entities or persons
(e.g., affiliated persons of Deutsche Asset Management or the DWS funds) and
with respect to certain types of investments (e.g., an investment advisory or
agency commission program under which you pay a fee to an investment advisor or
other firm for portfolio management or brokerage services).
Details regarding the types of investment programs and categories of investors
eligible for a sales charge waiver are provided in the fund's Statement of
Additional Information.
There are a number of additional provisions that apply in order to be eligible
for a sales charge waiver. The fund may waive the sales charge for investors in
other situations as well. Your financial advisor or Shareholder Services can
answer your questions and help you determine if you are eligible.
IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or through one of
the sales charge reduction features described above, you may be eligible to buy
Class A shares without a sales charge ("Large Order NAV Purchase Privilege").
However, you may be charged a contingent deferred sales charge (CDSC) on any
shares you sell (see the "Shareholder Fees" table for the CDSC applicable for
these shares). This CDSC is waived under certain circumstances (see "Policies
You Should Know About"). Your financial advisor or Shareholder Services can
answer your questions and help you determine if you're eligible.
CLASS C SHARES
Class C shares may appeal to investors who aren't certain of their investment
time horizon.
With Class C shares, you pay no up-front sales charge to the fund. Class C
shares have a 12b-1 plan, under which a distribution fee of 0.75% and a
shareholder servicing fee of up to 0.25% are deducted from class assets each
year. Because of these fees, the annual expenses for Class C
9
PROSPECTUS May 1, 2010 Investing in the Fund
shares are higher than those for Class A shares (and the performance of Class C
shares is correspondingly lower than that of Class A shares).
Class C shares have a CDSC, but only on shares you sell within one year of
buying them:
YEAR AFTER YOU BOUGHT SHARES CDSC ON SHARES YOU SELL
----------------------------- ------------------------
First year 1.00%
------------------------------ ----
Second year and later None
------------------------------ ----
This CDSC is waived under certain circumstances (see "Policies You Should Know
About"). Your financial advisor or Shareholder Services can answer your
questions and help you determine if you're eligible.
While Class C shares do not have an up-front sales charge, their higher annual
expenses mean that, over the years, you could end up paying more than the
equivalent of the maximum allowable up-front sales charge.
Orders to purchase Class C shares of $500,000 or more will be declined with the
exception of orders received from financial representatives acting for clients
whose shares are held in an omnibus account and certain employer-sponsored
employee benefit plans.
INSTITUTIONAL CLASS SHARES
You may buy Institutional Class shares through your securities dealer or
through any financial institution that is authorized to act as a shareholder
servicing agent ("financial advisor"). Contact them for details on how to place
and pay for your order.
ELIGIBILITY REQUIREMENTS. You may buy Institutional Class shares if you are any
of the following:
o An eligible institution (e.g., a financial institution, corporation, trust,
estate or educational, religious or charitable institution).
o An employee benefit plan with assets of at least $50 million.
o A registered investment advisor or financial planner purchasing on behalf of
clients and charging an asset-based or hourly fee.
o A client of the private banking division of Deutsche Bank AG.
o A current or former director or trustee of the Deutsche or DWS mutual funds.
o An employee, the employee's spouse or life partner and children or
stepchildren age 21 or younger of Deutsche Bank or its affiliates or a
subadvisor to any fund in the DWS family of funds or a broker-dealer
authorized to sell shares in the funds.
INVESTMENT MINIMUM
The minimum initial investment is waived for:
o Shareholders with existing accounts prior to August 13, 2004 who met the
previous minimum investment eligibility requirement.
o Investment advisory affiliates of Deutsche Bank Securities, Inc., DWS funds
or Deutsche funds purchasing shares for the accounts of their investment
advisory clients.
o Employee benefit plans with assets of at least $50 million.
o Clients of the private banking division of Deutsche Bank AG.
o Institutional clients and qualified purchasers that are clients of a
division of Deutsche Bank AG.
o A current or former director or trustee of the Deutsche or DWS funds.
o An employee, the employee's spouse or life partner and children or
stepchildren age 21 or younger of Deutsche Bank or its affiliates or a
subadvisor to any fund in the DWS family of funds or a broker-dealer
authorized to sell shares of the funds.
o Registered investment advisors who trade through platforms approved by the
Advisor and whose client assets in the aggregate meet or, in the Advisor's
judgment, will meet within a reasonable period of time, the $1,000,000
minimum investment.
o Employee benefit plan platforms approved by the Advisor that invest in the
fund through an omnibus account, and that meet or, in the Advisor's
judgment, will meet within a reasonable period of time, the $1,000,000
minimum investment.
The fund reserves the right to modify the above eligibility requirements and
investment minimum at any time. In addition, the fund, in its discretion, may
waive the minimum initial investment for specific employee benefit plans (or
family of plans) whose aggregate investment in Institutional Class shares of
the fund equals or exceeds the minimum initial investment amount but where a
particular account or program may not on its own meet such minimum amount.
CLASS S SHARES
Class S shares are generally only available to new investors through fee-based
programs of investment dealers that have special agreements with the fund's
distributor, through certain group retirement plans and through certain
registered investment advisors. These dealers and advisors typically charge
ongoing fees for services they provide.
ELIGIBILITY REQUIREMENTS. Class S shares of a fund are offered at net asset
value without a sales charge to certain eligible investors as described below.
The following investors may purchase Class S shares of DWS funds either (i)
directly from DWS Investments Distributors, Inc. ("DIDI"), the fund's principal
underwriter; or (ii) through an intermediary relationship with a financial
services firm established with respect to the DWS funds as of December 31,
2004.
o Existing shareholders of Class S shares of any DWS fund as of December 31,
2004, and household members residing at the same address.
10
PROSPECTUS May 1, 2010 Investing in the Fund
o Shareholders of Class S of any DWS fund who became Class S shareholders in
connection with the consolidation of Class AARP and Class S on July 17,
2006 and household members residing at the same address.
o Shareholders who have owned Class S shares continuously since December 31,
2004 and household members residing at the same address may open new
accounts for Class S shares of any DWS fund.
o Any participant who has owned Class S shares of any DWS fund through an
employee sponsored retirement, employee stock, bonus, pension or profit
sharing plan continuously since December 31, 2004 may open a new individual
account for Class S shares of any DWS fund.
o Any participant who owns Class S shares of any DWS fund through a
retirement, employee stock, bonus, pension or profit sharing plan may
complete a direct rollover to an IRA account that will hold Class S shares.
This applies to individuals who begin their retirement plan investments
with a DWS fund at any time, including after December 31, 2004.
o Officers, fund Board Members, and full-time employees and their family
members, of the Advisor and its affiliates.
o Class S shares are available to any accounts managed by the Advisor, any
advisory products offered by the Advisor or DIDI and to DWS Allocation
Series or other fund of funds managed by the Advisor or its affiliates.
o Shareholders of Class S of DWS Emerging Markets Equity Fund who became
shareholders of the fund in connection with the fund's acquisition of
Scudder New Asia Fund, Inc. on April 17, 2006.
o Shareholders of Class S of any DWS fund who became Class S shareholders in
connection with the consolidation of Class M and Class S on August 18, 2006
and household members residing at the same address.
o Shareholders of Class S of any DWS fund who became Class S shareholders in
connection with the renaming or conversion of Investment Class to Class S
on October 23, 2006.
The following additional investors may purchase Class S shares of DWS funds.
o Broker-dealers, banks and registered investment advisors ("RIAs") may
purchase Class S shares in connection with a comprehensive or "wrap" fee
program or other fee based program.
o Any group retirement, employee stock, bonus, pension or profit-sharing
plans.
o Persons who purchase shares as part of an investment only placement in a 529
College Savings Plan (i.e., when the DWS fund is one of various investment
options in a 529 College Savings Plan sponsored by another provider).
o Persons who purchase shares through a Health Savings Account or a Voluntary
Employees' Benefit Association ("VEBA") Trust.
DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Class S shares.
BUYING, EXCHANGING AND SELLING SHARES
The following information applies to Class A, C, Institutional and S shares.
TO CONTACT DWS INVESTMENTS
BY PHONE
CLASS NUMBER
------- ---------------
A C (800) 621-1048
------- ---------------
INST (800) 730-1313
------- ---------------
S (800) 728-3337
------- ---------------
BY MAIL
TYPE ADDRESS
----------------- ------------------------------------------------
EXPEDITED MAIL
All Requests DWS Investments
----------------- Attn: (see department names under Regular Mail)
210 West 10th Street
Kansas City, MO 64121-1614
------------------------------------------------
REGULAR MAIL
New Accounts DWS Investments
Attn: New Applications
P.O. Box 219356
Kansas City, MO 64121-9356
Additional DWS Investments
Investments Attn: Purchases
P.O. Box 219154
Kansas City, MO 64121-9154
Exchanges and DWS Investments
Redemptions Attn: Transaction Processing
P.O. Box 219557
Kansas City, MO 64121-9557
HOW TO BUY SHARES
Please note that your account cannot be opened until we receive a completed
account application.
MINIMUM INITIAL INVESTMENT ($)
AUTOMATIC
UGMAS/ INVESTMENT
NON-IRA IRAS UTMAS PLANS
------------ -------------- -------- ------------------
A C 1,000 500 1,000 500
------ ----- --- ----- ---
INST 1,000,000 N/A N/A N/A
------ --------- ---- ----- ----
S 2,500 1,000 1,000 1,000
------ --------- ----- ----- -----
For participants in certain fee-based and wrap programs offered through certain
financial intermediaries approved by the Advisor, there is no minimum initial
investment for Class A, C and S shares and no minimum additional investment for
Class A and Class S shares. Institutional Class shares also have no additional
investment minimum. The minimum additional investment for all other instances
is $50. The maximum Automatic Investment Plan investment is $250,000.
11
PROSPECTUS May 1, 2010 Investing in the Fund
THROUGH A FINANCIAL ADVISOR
Contact your financial advisor to obtain a new account application or for
instructions about how to set up a new account. Your advisor can also assist
with making additional investments into an existing account.
BY MAIL OR EXPEDITED MAIL
To establish an account, simply complete the appropriate application and mail
it to the address provided on the form. With your application, include your
check made payable to "DWS Investments" for the required initial minimum
investment for the share class you have selected.
Once your account is established, to make additional investments, send a check
made payable to "DWS Investments" and an investment slip to the appropriate
address. If you do not have an investment slip, include a letter with your
name, account number, the full fund name and share class, and your investment
instructions. If your check fails to clear, the fund has the right to cancel
your order, hold you liable or charge you or your account for any losses or
fees the fund or its agents have incurred.
BY AUTOMATIC INVESTMENT PLAN
If you wish to take advantage of the lower initial investment minimums by
establishing an Automatic Investment Plan, make sure to complete that section
on the new account application and attach a voided check for the bank account
from which the funds will be drawn. Investments are made automatically from the
shareholder's account at a bank, savings and loan or credit union into the
shareholder's fund account. Termination by a shareholder will become effective
within thirty days after DWS Investments has received the request. The fund may
immediately terminate a shareholder's Automatic Investment Plan in the event
that any item is unpaid by the shareholder's financial institution.
OTHER WAYS TO BUY SHARES
The following privileges must be established on your account before an
investment request is made. This can either be done by completing the
applicable section(s) on the new account application or by contacting a
customer service representative for instructions and any required paperwork.
BY PHONE USING QUICKBUY (FOR ADDITIONAL INVESTMENTS ONLY). Call DWS Investments
using the appropriate telephone number for your share class. You can use our
automated system to place your QuickBuy purchase using the Automated Clearing
House system (ACH), or you can choose to be transferred to a customer service
representative to complete your request. Transactions take two to three days to
be completed and there is a $50 minimum and a $250,000 maximum.
ON THE INTERNET (FOR ADDITIONAL INVESTMENTS ONLY). Register at
www.dws-investments.com to set up on-line access to your account(s). Or, log in
to the website if you have previously registered. Follow the instructions on
the website to request a purchase with money from the bank account you have
established on your DWS account(s).
BY WIRE (FOR ADDITIONAL INSTITUTIONAL CLASS INVESTMENTS ONLY). You may buy
shares by wire only if your account is authorized to do so. Please note that
you or your financial advisor must call us in advance of a wire transfer
purchase. After you inform us of the amount of your purchase, you will receive
a trade confirmation number. Instruct your bank to send payment by wire using
the wire instructions noted below. All wires must be received by 4:00 p.m.
Eastern time the next business day following your purchase. If your wire is not
received by 4:00 p.m. Eastern time on the next business day after the fund
receives your request to purchase shares, your transaction will be canceled at
your expense and risk.
WIRE DETAILS
Bank name State Street Bank Boston
--------------- --------------------------------
Routing Number 011000028
---------------- ---------
Attention DWS Investments
---------------- --------------------------------
DDA Number 9903-5552
---------------- ---------
FBO (Account name) (Account number)
---------------- -------------------------------
Credit (Fund name, Fund number and, if
----------------
applicable, class name)
--------------------------------
Refer to your account statement for the account name and number. Wire transfers
normally take two or more hours to complete. Wire transfers may be restricted
on holidays and at certain other times.
HOW TO EXCHANGE SHARES
REQUIREMENTS AND LIMITS
CLASS EXCHANGING INTO ANOTHER FUND ($)
------- -----------------------------------------------
A C 1,000 minimum into new non-IRA accounts per
------- fund
500 minimum into new IRA accounts per fund
50 minimum into all existing accounts per fund
-----------------------------------------------
INST 1,000,000 minimum into new accounts per fund
------- 50 minimum into all existing accounts per fund
-----------------------------------------------
S 2,500 minimum into new non-IRA accounts per
------- fund
1,000 minimum into new IRA and UTMA/UGMA
accounts per fund
50 minimum into all existing accounts per fund
-----------------------------------------------
Exchanges are allowed between like share classes only.
In addition to what is detailed below, your financial advisor can assist you
with exchanging shares. Please contact your financial advisor using the method
that is most convenient for you.
BY PHONE
Call DWS Investments using the appropriate telephone number for your share
class. You may use our automated system to place your exchange, or you may
choose to be
12
PROSPECTUS May 1, 2010 Investing in the Fund
transferred to a customer service representative to complete your request. For
accounts with $5,000 or more, you may also establish an Automatic Exchange Plan
of a minimum of $50 to another DWS fund on a regular basis. A representative
can assist you with establishing this privilege.
ON THE INTERNET
Register at www.dws-investments.com to set up on-line access to your
account(s). Or, log in to the website if you have previously registered. Follow
the instructions on the website to request an exchange to another DWS fund.
BY MAIL OR EXPEDITED MAIL
Write a letter that includes the following information: the name(s) of all
owners and address as they appear on your account, the fund name, share class,
and account number from which you want to exchange, the dollar amount or number
of shares you wish to exchange, and the name of the fund into which you want to
exchange. Also include a daytime telephone number if we have any questions. All
owners should sign the letter and it should be mailed to the appropriate
address for exchanges and redemptions.
HOW TO SELL SHARES
REQUIREMENTS AND LIMITS
SELLING SHARES ($)
--------------------------------------------
A C Check redemption:
------
Up to 100,000. More than 100,000 see
"Signature Guarantee"
QuickSell to your bank: Minimum 50, maximum
250,000
Wire redemption to your bank: Minimum 1,000
--------------------------------------------
INST Same as Classes A and C
------ --------------------------------------------
S Same as Classes A and C
------ --------------------------------------------
In addition to what is detailed below, your financial advisor can assist you
with selling shares. Please contact your financial advisor using the method
that is most convenient for you.
BY PHONE
Call DWS Investments using the appropriate telephone number for your share
class. You may use our automated system or you may choose to be transferred to
a customer service representative to complete your request. You may request a
check for the redemption amount sent to the address on the account.
OTHER WAYS TO SELL SHARES
The following privileges must be established on your account before a
redemption request is made. This can either be done by completing the
applicable section(s) on the new account application when you establish your
account or by contacting a customer service representative for instructions and
any required paperwork to add them to an existing account. Depending on the
method you choose to request these redemptions, different transaction maximums
may apply.
BY PHONE USING QUICKSELL. Call DWS Investments using the appropriate phone
number for your share class. You may request a QuickSell redemption (see table
for applicable minimum and maximum amounts). The proceeds are sent via the
Automated Clearing House system (ACH) to your bank. Transactions generally take
two to three days to be completed. For accounts with $5,000 or more, you may
also establish an Automatic Withdrawal Plan of a minimum of $50 to be sent on a
regular basis as you direct.
ON THE INTERNET. Register at www.dws-investments.com to set up on-line access
to your account(s). Or, log in to the website if you have previously
registered. Follow the instructions on the website to request a redemption from
your account using the desired method from your available options.
BY MAIL OR EXPEDITED MAIL. Write a letter that includes the following
information: the name(s) of all owners and address as they appear on your
account, the fund name, share class, and account number from which you want to
sell shares, the dollar amount or number of shares you wish to sell, and a
daytime telephone number if we have questions. All owners should sign the
letter and it should be mailed to the appropriate address.
Some redemptions can only be ordered in writing with a signature guarantee. For
more information, please contact DWS Investments using the appropriate
telephone number for your share class.
BY WIRE. You may sell shares by wire only if your account is authorized to do
so. You will be paid for redeemed shares by wire transfer of funds to your
financial advisor or bank upon receipt of a duly authorized redemption request
as promptly as feasible. For your protection, you may not change the
destination bank account over the phone. To sell by wire, call DWS Investments
using the appropriate telephone number for your share class. After you inform
DWS Investments of the amount of your redemption, you will receive a trade
confirmation number. We must receive your order by 4:00 p.m. Eastern time to
wire to your account the next business day.
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to the fund, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of fund shares or the retention and/or servicing of fund
investors and fund shares ("revenue sharing"). Such revenue sharing payments
are in addition to any distribution or
13
PROSPECTUS May 1, 2010 Investing in the Fund
service fees payable under any Rule 12b-1 or service plan of the fund, any
record keeping/sub-transfer agency/
networking fees payable by the fund (generally through the Distributor or an
affiliate) and/or the Distributor to certain financial advisors for performing
such services and any sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table
or elsewhere in this prospectus or the Statement of Additional Information as
payable to all financial advisors. For example, the Advisor, the Distributor
and/or their affiliates may compensate financial advisors for providing the
fund with "shelf space" or access to a third party platform or fund offering
list or other marketing programs, including, without limitation, inclusion of
the fund on preferred or recommended sales lists, mutual fund "supermarket"
platforms and other formal sales programs; granting the Distributor access to
the financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and obtaining other forms of
marketing support.
The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of the fund attributable to the financial
advisor, the particular fund or fund type or other measures as agreed to by the
Advisor, the Distributor and/or their affiliates and the financial advisors or
any combination thereof. The amount of these revenue sharing payments is
determined at the discretion of the Advisor, the Distributor and/or their
affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
0.01% up to 0.26% of assets of the fund serviced and maintained by the
financial advisor, 0.05% to 0.25% of sales of the fund attributable to the
financial advisor, a flat fee of $4,000 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of the fund or of any particular share class of the fund. You
should review your financial advisor's compensation disclosure and/or talk to
your financial advisor to obtain more information on how this compensation may
have influenced your financial advisor's recommendation of the fund. Additional
information regarding these revenue sharing payments is included in the fund's
Statement of Additional Information, which is available to you on request at no
charge (see the back cover of this prospectus for more information on how to
request a copy of the Statement of Additional Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. or ExpertPlan Inc. on the DWS Investments branded retirement plan
platform (the "Platform") with the level of revenue sharing payments being
based upon sales of both the DWS funds and the non-DWS funds by the financial
advisor on the Platform or current assets of both the DWS funds and the non-DWS
funds serviced and maintained by the financial advisor on the Platform.
It is likely that broker-dealers that execute portfolio transactions for the
fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.
POLICIES YOU SHOULD KNOW ABOUT
Along with the information on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on
distributions and taxes, applies to all investors, including those investing
through a financial advisor.
If you are investing through a financial advisor or through a retirement plan,
check the materials you received from them about how to buy and sell shares
because particular financial advisors or other intermediaries may adopt
policies, procedures or limitations that are separate from those described in
this prospectus. Please note that a financial advisor may charge fees separate
from those charged by the fund and may be compensated by the fund.
POLICIES ABOUT TRANSACTIONS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange is open. The
fund calculates its share price for each class every business day, as of the
close of regular trading on the New York Stock Exchange (typically 4:00 p.m.
Eastern time, but sometimes earlier, as in the case of scheduled half-day
trading or unscheduled suspensions of trading). You can place an order to buy
or sell shares at any time.
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PROSPECTUS May 1, 2010 Investing in the Fund
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, we will ask for your name, address, date of birth and
other information that will allow us to identify you. Some or all of this
information will be used to verify the identity of all persons opening an
account.
We might request additional information about you (which may include certain
documents, such as articles of incorporation for companies) to help us verify
your identity and, in some cases, more information and/or documents may be
required to conduct the verification. The information and documents will be
used solely to verify your identity.
We will attempt to collect any missing required and requested information by
contacting you or your financial advisor. If we are unable to obtain this
information within the time frames established by the fund, then we may reject
your application and order.
The fund will not invest your purchase until all required and requested
identification information has been provided and your application has been
submitted in "good order." After we receive all the information, your
application is deemed to be in good order and we accept your purchase, you will
receive the net asset value per share next calculated, less any applicable
sales charge.
If we are unable to verify your identity within time frames established by the
fund, after a reasonable effort to do so, you will receive written
notification.
With certain limited exceptions, only US residents may invest in the fund.
Because orders placed through a financial advisor must be forwarded to the
transfer agent before they can be processed, you'll need to allow extra time.
Your financial advisor should be able to tell you approximately when your order
will be processed. It is the responsibility of your financial advisor to
forward your order to the transfer agent in a timely manner.
SUB-MINIMUM BALANCES FOR CLASS A AND C. The fund may close your account and
send you the proceeds if your balance falls below $1,000 ($500 for accounts
with an Automatic Investment Plan funded with $50 or more per month in
subsequent investments), or below $250 for retirement accounts. We will give
you 60 days' notice (90 days for retirement accounts) so you can either
increase your balance or close your account (these policies don't apply to
investors with $100,000 or more in DWS fund shares, investors in certain
fee-based and wrap programs offered through certain financial intermediaries
approved by the Advisor, or group retirement plans and certain other accounts
having lower minimum share balance requirements).
SUB-MINIMUM BALANCES FOR INSTITUTIONAL CLASS. The fund may redeem your shares
and close your account on 60 days' notice if it fails to meet the minimum
account balance requirement of $1,000,000 for any reason.
SUB-MINIMUM BALANCES FOR CLASS S. The fund may close your account and send you
the proceeds if your balance falls below $2,500 ($1,000 with an Automatic
Investment Plan funded with $50 or more per month in subsequent investments);
or below $250 for retirement accounts. We will give you 60 days' notice (90
days for retirement accounts) so you can either increase your balance or close
your account (these policies don't apply to investors with $100,000 or more in
DWS fund shares, investors in certain fee-based and wrap programs offered
through certain financial intermediaries approved by the Advisor, or group
retirement plans and certain other accounts having lower minimum share balance
requirements).
An account maintenance fee of $6.25 per quarter (for a $25 annual fee) will be
assessed on accounts whose balances fail to meet the minimum initial investment
requirement for a period of 90 days prior to the assessment date. The quarterly
assessment will occur on or about the 15th of the last month in each calendar
quarter. Please note that the fee will be assessed on accounts that fall below
the minimum for any reason, including due to market value fluctuations,
redemptions or exchanges. The account maintenance fee does not apply to: (i)
accounts with an automatic investment plan; (ii) accounts held in an omnibus
account through a financial services firm; (iii) accounts maintained on behalf
of participants in certain fee based and wrap programs offered through certain
financial intermediaries approved by the Advisor; (iv) participant level
accounts in group retirement plans held on the records of a retirement plan
record keeper; and (v) accounts held by shareholders who maintain $100,000 or
more in aggregate assets in DWS fund shares.
MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive trading of fund
shares may present risks to long-term shareholders, including potential
dilution in the value of fund shares, interference with the efficient
management of the fund's portfolio (including losses on the sale of
investments), taxable gains to remaining shareholders and increased brokerage
and administrative costs. These risks may be more pronounced if the fund
invests in certain securities, such as those that trade in foreign markets, are
illiquid or do not otherwise have "readily available market quotations."
Certain investors may seek to employ short-term trading strategies aimed at
exploiting variations in portfolio valuation that arise from the nature of the
securities held by the fund (e.g., "time zone arbitrage"). The fund discourages
short-term and excessive trading and has adopted policies and procedures that
are intended to detect and deter short-term and excessive trading.
Pursuant to its policies, the fund will impose a 2% redemption fee on fund
shares held for less than a specified holding period (subject to certain
exceptions discussed
15
PROSPECTUS May 1, 2010 Investing in the Fund
below under "Redemption fees"). The fund also reserves the right to reject or
cancel a purchase or exchange order for any reason without prior notice. For
example, the fund may in its discretion reject or cancel a purchase or an
exchange order even if the transaction is not subject to the specific roundtrip
transaction limitation described below if the Advisor believes that there
appears to be a pattern of short-term or excessive trading activity by a
shareholder or deems any other trading activity harmful or disruptive to the
fund. The fund, through its Advisor and transfer agent, will measure short-term
and excessive trading by the number of roundtrip transactions within a
shareholder's account during a rolling 12-month period. A "roundtrip"
transaction is defined as any combination of purchase and redemption activity
(including exchanges) of the same fund's shares. The fund may take other
trading activity into account if the fund believes such activity is of an
amount or frequency that may be harmful to long-term shareholders or disruptive
to portfolio management.
Shareholders are limited to four roundtrip transactions in the same DWS fund
(excluding money market funds) over a rolling 12-month period. Shareholders
with four or more roundtrip transactions in the same DWS fund within a rolling
12-month period generally will be blocked from making additional purchases of,
or exchanges into, that DWS fund. The fund has sole discretion whether to
remove a block from a shareholder's account. The rights of a shareholder to
redeem shares of a DWS fund are not affected by the four roundtrip transaction
limitation, but all redemptions remain subject to the fund's redemption fee
policy (see "Redemption fees" described below).
The fund may make exceptions to the roundtrip transaction policy for certain
types of transactions if, in the opinion of the Advisor, the transactions do
not represent short-term or excessive trading or are not abusive or harmful to
the fund, such as, but not limited to, systematic transactions, required
minimum retirement distributions, transactions initiated by the fund or
administrator and transactions by certain qualified funds-of-funds.
In certain circumstances where shareholders hold shares of the fund through a
financial intermediary, the fund may rely upon the financial intermediary's
policy to deter short-term or excessive trading if the Advisor believes that
the financial intermediary's policy is reasonably designed to detect and deter
transactions that are not in the best interests of the fund. A financial
intermediary's policy relating to short-term or excessive trading may be more
or less restrictive than the DWS funds' policy, may permit certain transactions
not permitted by the DWS funds' policies, or prohibit transactions not subject
to the DWS funds' policies.
The Advisor may also accept undertakings from a financial intermediary to
enforce short-term or excessive trading policies on behalf of the fund that
provide a substantially similar level of protection for the fund against such
transactions. For example, certain financial intermediaries may have
contractual, legal or operational restrictions that prevent them from blocking
an account. In such instances, the financial intermediary may use alternate
techniques that the Advisor considers to be a reasonable substitute for such a
block.
In addition, if the fund invests some portion of its assets in foreign
securities, it has adopted certain fair valuation practices intended to protect
the fund from "time zone arbitrage" with respect to its foreign securities
holdings and other trading practices that seek to exploit variations in
portfolio valuation that arise from the nature of the securities held by the
fund. (See "How the fund calculates share price.")
There is no assurance that these policies and procedures will be effective in
limiting short-term and excessive trading in all cases. For example, the
Advisor may not be able to effectively monitor, detect or limit short-term or
excessive trading by underlying shareholders that occurs through omnibus
accounts maintained by broker-dealers or other financial intermediaries. The
Advisor reviews trading activity at the omnibus level to detect short-term or
excessive trading. If the Advisor has reason to suspect that short-term or
excessive trading is occurring at the omnibus level, the Advisor will contact
the financial intermediary to request underlying shareholder level activity.
Depending on the amount of fund shares held in such omnibus accounts (which may
represent most of the fund's shares) short-term and/or excessive trading of
fund shares could adversely affect long-term shareholders in the fund. If
short-term or excessive trading is identified, the Advisor will take
appropriate action.
The fund's market timing policies and procedures may be modified or terminated
at any time.
REDEMPTION FEES. The fund imposes a redemption fee of 2% of the total
redemption amount (calculated at net asset value, without regard to the effect
of any contingent deferred sales charge; any contingent deferred sales charge
is also assessed on the total redemption amount without regard to the
assessment of the 2% redemption fee) on all fund shares redeemed or exchanged
within 15 days of buying them (either by purchase or exchange). The redemption
fee is paid directly to the fund and is designed to encourage long-term
investment and to offset transaction and other costs associated with short-term
or excessive trading. For purposes of determining whether the redemption fee
applies, shares held the longest time will be treated as being redeemed first
and shares held the shortest time will be treated as being redeemed last.
The redemption fee is applicable to fund shares purchased either directly or
through a financial intermediary, such as a broker-dealer. Transactions through
financial intermediaries typically are placed with the fund on an omnibus basis
and include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against
one another
16
PROSPECTUS May 1, 2010 Investing in the Fund
and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to the fund. For this reason, the fund has undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the fund. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the
fund's. Subject to approval by the Advisor or the fund's Board, intermediaries
who transact business on an omnibus basis may implement the redemption fees
according to their own operational guidelines (which may be different than the
fund's policies) and remit the fees to the fund.
The redemption fee will not be charged in connection with the following
exchange or redemption transactions: (i) transactions on behalf of participants
in certain research wrap programs; (ii) transactions on behalf of a shareholder
to return any excess IRA contributions to the shareholder; (iii) transactions
on behalf of a shareholder to effect a required minimum distribution on an IRA;
(iv) transactions on behalf of any mutual fund advised by the Advisor and its
affiliates (e.g., "funds of funds") or, in the case of a master/
feeder relationship, redemptions by the feeder fund from the master portfolio;
(v) transactions on behalf of certain unaffiliated mutual funds operating as
funds of funds; (vi) transactions following death or disability of any
registered shareholder, beneficial owner or grantor of a living trust with
respect to shares purchased before death or disability; (vii) transactions
involving hardship of any registered shareholder; (viii) systematic
transactions with pre-defined trade dates for purchases, exchanges or
redemptions, such as automatic account rebalancing, or loan origination and
repayments; (ix) transactions involving shares purchased through the
reinvestment of dividends or other distributions; (x) transactions involving
shares transferred from another account in the same fund or converted from
another class of the same fund (the redemption fee period will carry over to
the acquired shares); (xi) transactions initiated by the fund or administrator
(e.g., redemptions for not meeting account minimums, to pay account fees funded
by share redemptions, or in the event of the liquidation or merger of the
fund); or (xii) transactions in cases when there are legal or contractual
limitations or restrictions on the imposition of the redemption fee (as
determined by the fund or its agents in their sole discretion). It is the
policy of the DWS funds to permit approved fund platform providers to execute
transactions in shares of the funds without the imposition of a redemption fee
if such providers have implemented alternative measures that are determined by
the Advisor to provide controls on short-term and excessive trading that are
comparable to the DWS funds' policies.
THE AUTOMATED INFORMATION LINE is available 24 hours a day by calling the
appropriate telephone number for your share class. You can use our automated
phone service to get information on DWS funds generally and on accounts held
directly at DWS Investments. You can also use this service to request share
transactions.
TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are automatically
entitled to telephone redemption and exchange privileges, but you may elect not
to have them when you open your account or by calling the appropriate phone
number on the back cover.
Since many transactions may be initiated by telephone or electronically, it's
important to understand that as long as we take reasonable steps to ensure that
an order to purchase or redeem shares is genuine, such as recording calls or
requesting personal security information, we are not responsible for any losses
that may occur as a result. For transactions conducted over the Internet, we
recommend the use of a secure Internet browser. In addition, you should verify
the accuracy of your confirmation statements immediately after you receive
them.
THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you currently have
shares in certificated form, you must include the share certificates properly
endorsed or accompanied by a duly executed stock power when exchanging or
redeeming shares. You may not exchange or redeem shares in certificate form by
telephone or via the Internet.
WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we don't
charge a fee to send or receive wires, it's possible that your bank may do so.
Wire transactions are generally completed within 24 hours. The fund can only
send wires of $1,000 or more and accept wires of $50 or more.
THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check drawn on a US
bank, a bank or Federal Funds wire transfer or an electronic bank transfer. The
fund does not accept third party checks. A third party check is a check made
payable to one or more parties and offered as payment to one or more other
parties (e.g., a check made payable to you that you offer as payment to someone
else). Checks should normally be payable to DWS Investments and drawn by you or
a financial institution on your behalf with your name or account number
included with the check. If you pay for shares by check and the check fails to
clear, we have the right to cancel your order, hold you liable or charge you or
your account for any losses or fees the fund or its agents have incurred.
SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth of shares
or send proceeds to a third party or to a new address, you'll usually need to
place your order in writing and include a signature guarantee. However, if you
want money transferred electronically to a bank account that is already on file
with us, you don't need a signature guarantee. Also, generally you don't need a
signature guarantee for an exchange, although we may require one in certain
other circumstances.
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PROSPECTUS May 1, 2010 Investing in the Fund
A signature guarantee is simply a certification of your signature - a valuable
safeguard against fraud. You can get a signature guarantee from an eligible
guarantor institution, including commercial banks, savings and loans, trust
companies, credit unions, member firms of a national stock exchange or any
member or participant of an approved signature guarantor program. We require
stamps from members of a medallion signature guarantee program. A notarized
document cannot be accepted in lieu of a signature guarantee.
SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION ACCOUNTS may
require additional documentation. Please call DWS Investments (see phone
numbers on the back cover) or contact your financial advisor for more
information.
WHEN YOU SELL SHARES THAT HAVE A CDSC, the CDSC is based on the original
purchase cost or current market value of the shares sold, whichever is less. In
processing orders to sell shares, the shares with the lowest CDSC are sold
first. For each investment you make, the date you first bought shares is the
date we use to calculate a CDSC on that particular investment. A CDSC is not
imposed when you exchange from one fund into another. When you sell shares of
the fund that you exchanged into, however, a CDSC may be imposed which may
differ from the schedule for the fund you exchanged out of. Your shares will
retain their original cost and purchase date.
There are certain cases in which you may be exempt from a CDSC. These include:
o The death or disability of an account owner (including a joint owner). This
waiver applies only under certain conditions. Please contact your financial
advisor or Shareholder Services to determine if the conditions exist
o Withdrawals made through an automatic withdrawal plan up to a maximum of 12%
per year of the net asset value of the account
o Withdrawals related to certain retirement or benefit plans
o Redemptions for certain loan advances, hardship provisions or returns of
excess contributions from retirement plans
o For Class A shares purchased through the Large Order NAV Purchase Privilege,
redemption of shares whose dealer of record at the time of the investment
notifies the Distributor that the dealer waives the applicable commission
o For Class C shares, redemption of shares purchased through a
dealer-sponsored asset allocation program maintained on an omnibus
record-keeping system, provided the dealer of record has waived the advance
of the first year distribution and service fees applicable to such shares
and has agreed to receive such fees quarterly
In each of these cases, there are a number of additional provisions that apply
in order to be eligible for a CDSC waiver. Your financial advisor or
Shareholder Services can answer your questions and help you determine if you
are eligible.
IF YOU SELL SHARES IN A DWS FUND FOR WHICH YOU PAID A SALES CHARGE AND THEN
DECIDE TO INVEST WITH DWS INVESTMENTS AGAIN WITHIN SIX MONTHS, you may be able
to take advantage of the "reinstatement feature." With this feature, you can
put your money back into the same class of a DWS fund at its current net asset
value and, for purposes of a sales charge, it will be treated as if it had
never left DWS Investments. You'll be reimbursed (in the form of fund shares)
for any CDSC you paid when you sold shares in a DWS fund. Future CDSC
calculations will be based on your original investment date, rather than your
reinstatement date.
You can only use the reinstatement feature once for any given group of shares.
To take advantage of this feature, contact Shareholder Services or your
financial advisor.
CLASS A TO CLASS S IN THE SAME FUND EXCHANGE PRIVILEGE. Investors who have
invested in Class A shares through a comprehensive or "wrap" fee program, or
other fee-based program sponsored by a broker-dealer, bank or registered
investment adviser, may become eligible to invest in Class S shares. Subject to
the discretion of the Distributor, such shareholders may exchange their Class A
shares for Class S shares of equal aggregate value of the same fund. No sales
charges or other charges will apply to any such exchanges. Investors should
contact their selling and/or servicing agents to learn more about the details
of this exchange feature.
MONEY FROM SHARES YOU SELL is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are circumstances when it could be longer,
including, but not limited to, when you are selling shares you bought recently
by check or ACH (the funds will be placed under a 10 calendar day hold to
ensure good funds) or when unusual circumstances prompt the SEC to allow
further delays. Certain expedited redemption processes (e.g., redemption
proceeds by wire) may also be delayed or unavailable when you are selling
shares recently purchased or in the event of the closing of the Federal Reserve
wire payment system. The fund reserves the right to suspend or postpone
redemptions as permitted pursuant to Section 22(e) of the 1940 Act. Generally,
those circumstances are when 1) the New York Stock Exchange is closed other
than customary weekend or holiday closings; 2) the SEC determines that trading
on the New York Stock Exchange is restricted; 3) the SEC determines that an
emergency exists which makes the disposal of securities owned by the fund or
the fair determination of the value of the fund's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also
18
PROSPECTUS May 1, 2010 Investing in the Fund
be delayed in the event of a non-routine closure of the Federal Reserve wire
payment system. For additional rights reserved by the fund, please see "Other
rights we reserve."
HOW THE FUND CALCULATES SHARE PRICE
To calculate net asset value, or NAV, each share class uses the following
equation:
TOTAL TOTAL TOTAL NUMBER OF
- / = NAV
( )
ASSETS LIABILITIES SHARES OUTSTANDING
The price at which you buy shares is based on the NAV per share calculated
after the order is received and accepted by the transfer agent, although for
Class A shares it will be adjusted to allow for any applicable sales charge
(see "Choosing a Share Class"). The price at which you sell shares is also
based on the NAV per share calculated after the order is received and accepted
by the transfer agent, although a CDSC may be taken out of the proceeds (see
"Choosing a Share Class").
THE FUND CHARGES A REDEMPTION FEE EQUAL TO 2% of the value of shares redeemed
or exchanged within 15 days of purchase. Please see "Policies about
transactions - Redemption fees" for further information.
WE TYPICALLY VALUE SECURITIES USING INFORMATION FURNISHED BY AN INDEPENDENT
PRICING SERVICE OR MARKET QUOTATIONS, WHERE APPROPRIATE. However, we may use
methods approved by the Board, such as a fair valuation model, which are
intended to reflect fair value when pricing service information or market
quotations are not readily available or when a security's value or a meaningful
portion of the value of the fund's portfolio is believed to have been
materially affected by a significant event, such as a natural disaster, an
economic event like a bankruptcy filing, or a substantial fluctuation in
domestic or foreign markets that has occurred between the close of the exchange
or market on which the security is principally traded (for example, a foreign
exchange or market) and the close of the New York Stock Exchange. In such a
case, the fund's value for a security is likely to be different from the last
quoted market price or pricing service information. In addition, due to the
subjective and variable nature of fair value pricing, it is possible that the
value determined for a particular asset may be materially different from the
value realized upon such asset's sale. It is -expected that the greater the
percentage of fund assets that is -invested in non-US securities, the more
extensive will be the -fund's use of fair value pricing. This is intended to
reduce the fund's exposure to "time zone arbitrage" and other harmful -trading
practices. (See "Market -timing policies and procedures.")
TO THE EXTENT THAT THE FUND INVESTS IN SECURITIES THAT ARE TRADED PRIMARILY IN
FOREIGN MARKETS, the value of its holdings could change at a time when you
aren't able to buy or sell fund shares. This is because some foreign markets
are open on days or at times when the fund doesn't price its shares. (Note that
prices for securities that trade on foreign exchanges can change significantly
on days when the New York Stock Exchange is closed and you cannot buy or sell
fund shares. Price changes in the securities the fund owns may ultimately
affect the price of fund shares the next time the NAV is calculated.)
OTHER RIGHTS WE RESERVE
You should be aware that we may do any of the following:
o withdraw or suspend the offering of shares at any time
o withhold a portion of your distributions and redemption proceeds if we have
been notified by the IRS that you are subject to backup withholding or if
you fail to provide us with the correct taxpayer ID number and certain
certifications, including certification that you are not subject to backup
withholding
o reject a new account application if you don't provide any required or
requested identifying information, or for any other reason
o refuse, cancel, limit or rescind any purchase or exchange order, without
prior notice; freeze any account (meaning you will not be able to purchase
fund shares in your account); suspend account services; and/or
involuntarily redeem your account if we think that the account is being
used for fraudulent or illegal purposes; one or more of these actions will
be taken when, at our sole discretion, they are deemed to be in the fund's
best interests or when the fund is requested or compelled to do so by
governmental authority or by applicable law
o close and liquidate your account if we are unable to verify your identity,
or for other reasons; if we decide to close your account, your fund shares
will be redeemed at the net asset value per share next calculated after we
determine to close your account (less any applicable sales charges or
redemption fees); you may recognize a gain or loss on the redemption of
your fund shares and you may incur a tax liability
o pay you for shares you sell by "redeeming in kind," that is, by giving you
securities (which typically will involve brokerage costs for you to
liquidate) rather than cash, but which will be taxable to the same extent
as a redemption for cash; the fund generally won't make a redemption in
kind unless your requests over a 90-day period total more than $250,000 or
1% of the value of the fund's net assets, whichever is less
o change, add or withdraw various services, fees and account policies (for
example, we may adjust the fund's investment minimums at any time)
UNDERSTANDING DISTRIBUTIONS AND TAXES
The fund intends to distribute to its shareholders virtually all of its net
earnings. The fund can earn money in two ways: by receiving interest, dividends
or other income from investments it holds and by selling investments for
19
PROSPECTUS May 1, 2010 Investing in the Fund
more than it paid for them. (The fund's earnings are separate from any gains or
losses stemming from your own purchase and sale of shares.) The fund may not
always pay a dividend or other distribution for a given period.
THE FUND INTENDS TO PAY DIVIDENDS AND DISTRIBUTIONS to its shareholders in
November or December and, if necessary, may do so at other times as well.
Dividends or distributions declared and payable to shareholders of record in
the last quarter of a given calendar year are treated for federal income tax
purposes as if they were received on December 31 of that year, if such
dividends or distributions are actually paid in January of the following year.
For federal income tax purposes, income and capital gains distributions are
generally taxable to shareholders. However, dividends and distributions
received by retirement plans qualifying for tax exemption under federal income
tax laws generally will not be taxable.
YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You can have
them all automatically reinvested in fund shares (at NAV), all deposited
directly to your bank account or all sent to you by check, have one type
reinvested and the other sent to you by check or have them invested in a
different fund. Tell us your preference on your application. If you don't
indicate a preference, your dividends and distributions will all be reinvested
in shares of the fund without a sales charge (if applicable). Distributions are
treated the same for federal income tax purposes whether you receive them in
cash or reinvest them in additional shares. Under the terms of
employer-sponsored qualified plans, and retirement plans, reinvestment (at NAV)
is the only option.
BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL INCOME TAX
CONSEQUENCES FOR YOU (except in employer-sponsored qualified plans, IRAs or
other tax-advantaged accounts). Your sale of shares may result in a capital
gain or loss. The gain or loss will be long-term or short-term depending on how
long you owned the shares that were sold. For federal income tax purposes, an
exchange is treated the same as a sale.
THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and your own
fund transactions generally depends on their type:
GENERALLY TAXED AT LONG-TERM GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES: INCOME RATES:
DISTRIBUTIONS FROM THE FUND
o gains from the sale of o gains from the sale of securi-
securi-
ties held (or treated as held) ties held by the fund for one
by the fund for more than year or less
one year o all other taxable income
o qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
o gains from selling fund o gains from selling fund
shares held for more than shares held for one year or
one year less
ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE SUBJECT TO
FOREIGN WITHHOLDING TAXES. In that case, the fund's yield on those securities
would generally be decreased. The fund may elect to pass through to its
shareholders a credit or deduction for foreign taxes it has paid if at the end
of its fiscal year more than 50% of the value of the fund's total assets
consists of stocks or securities of foreign corporations. In addition, any
investments in foreign securities or foreign currencies may increase or
accelerate the fund's recognition of ordinary income and may affect the timing
or amount of the fund's distributions. If you invest in the fund through a
taxable account, your after-tax return could be negatively affected.
Investments in certain debt obligations or other securities may cause the fund
to recognize taxable income in excess of the cash generated by them. Thus, the
fund could be required at times to liquidate other investments in order to
satisfy its distribution requirements.
For taxable years beginning before January 1, 2011, distributions to
individuals and other noncorporate shareholders of investment income designated
by the fund as derived from qualified dividend income are eligible for taxation
for federal income tax purposes at the more favorable long-term capital gain
rates. It is currently unclear whether Congress will extend this provision for
taxable years beginning on or after January 1, 2011. Qualified dividend income
generally includes dividends received by the fund from domestic and some
foreign corporations. It does not include income from investments in debt
securities. In addition, the fund must meet certain holding period and other
requirements with respect to the dividend-paying stocks in its portfolio and
the shareholder must meet certain holding period and other requirements with
respect to the fund's shares for the lower tax rates to apply.
Dividends received by the fund from a REIT may be treated as qualified dividend
income only to the extent the dividends are attributable to qualified dividend
income received by such REIT. Distributions received by the fund from REITs
will not be eligible for the dividends received deduction.
20
PROSPECTUS May 1, 2010 Investing in the Fund
For taxable years beginning before January 1, 2011, the maximum federal income
tax rate imposed on long-term capital gains recognized by individuals and other
noncorporate shareholders has been temporarily reduced to 15%, in general, with
lower rates applying to taxpayers in the 10% and 15% rate brackets. It is
currently unclear whether Congress will extend this provision for taxable years
beginning on or after January 1, 2011. For taxable years beginning on or after
January 1, 2011, the maximum long-term capital gain rate is scheduled to return
to 20%.
Certain types of income received by a fund from REITs, real estate mortgage
investment conduits ("REMICs"), taxable mortgage pools or other investments may
cause the fund to designate some or all of its distributions as "excess
inclusion income." To fund shareholders such excess inclusion income may (1)
constitute taxable income, as unrelated business taxable income ("UBTI") for
those shareholders who would otherwise be exempt from federal income tax, such
as individual retirement accounts, 401(k) accounts, Keogh plans, pension plans
and certain charitable entities; (2) not generally be offset by net operating
losses; (3) not be eligible for reduced US withholding for non-US shareholders,
including shareholders from tax treaty countries; and (4) cause the fund to be
subject to tax if certain "disqualified organizations" are fund shareholders.
YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION EARLY EACH
YEAR. These statements tell you the amount and the federal income tax
classification of any dividends or distributions you received. They also have
certain details on your purchases and sales of shares.
Because the REITs invested in by the fund do not provide complete information
about the taxability of their distributions until after the calendar year-end,
in order to determine how much of the fund's distribution is taxable to
shareholders, the fund may request permission from the Internal Revenue Service
each year for an extension of time to issue Form 1099-DIV.
IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be getting some of
your investment back as a taxable dividend. You can avoid this by investing
after the fund pays a dividend. In tax-advantaged retirement accounts you
generally do not need to worry about this.
If the fund's distributions exceed its current and accumulated earnings and
profits, the excess will be treated for federal income tax purposes as a
tax-free return of capital to the extent of your basis in your shares and
thereafter as a capital gain. Because a return of capital distribution reduces
the basis of your shares, a return of capital distribution may result in a
higher capital gain or a lower capital loss when you sell your shares.
CORPORATIONS are taxed at the same rates on ordinary income and capital gains
but may be eligible for a dividends-received deduction for a portion of the
income dividends they receive from the fund, provided certain holding period
and other requirements are met.
The above discussion summarizes certain federal income tax consequences for
shareholders who are US persons. If you are a non-US person, please consult
your own tax advisor with respect to the US tax consequences to you of an
investment in the fund. For more information, see "Taxes" in the Statement of
Additional Information.
21
PROSPECTUS May 1, 2010 Investing in the Fund
FINANCIAL HIGHLIGHTS
The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in
the fund would have earned (or lost), assuming all dividends and distributions
were reinvested. This information has been audited by PricewaterhouseCoopers
LLP, independent registered public accounting firm, whose report, along with
the fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - CLASS A
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006(A)
------------------------------------------------ ------------- ---------------- -------------- --------------
SELECTED PER SHARE DATA
--------------------------------------------------------------- - - -
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.38 $ 10.50 $ 12.22 $ 10.00
------------------------------------------------ ------- -------- -------- --------
Income (loss) from investment operations:
Net investment income(b) .13 .16 .13 .08
------------------------------------------------ ------- -------- -------- --------
Net realized and unrealized gain (loss) 1.84 ( 5.27) ( 1.05) 2.34
------------------------------------------------ ------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 1.97 ( 5.11) ( .92) 2.42
------------------------------------------------ ------- -------- -------- --------
Less distributions from:
Net investment income ( .62) ( .00)*** ( .63) ( .15)
------------------------------------------------ ------- -------- -------- --------
Net realized gains - - ( .17) ( .05)
------------------------------------------------ ------- -------- -------- --------
Return of capital - ( .01) - -
------------------------------------------------ ------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .62) ( .01) ( .80) ( .20)
------------------------------------------------ ------- -------- -------- --------
Redemption fee .00*** .00*** .00*** .00***
------------------------------------------------ ------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 6.73 $ 5.38 $ 10.50 $ 12.22
------------------------------------------------ ------- -------- -------- --------
Total Return (%)(c,d) 36.71 (48.64) ( 7.84) 24.26**
------------------------------------------------ ------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------- -------- -------- --------
Net assets, end of period ($ millions) 371 226 424 288
------------------------------------------------ ------- -------- -------- --------
Ratio of expenses before expense reductions (%) 1.75 1.73 1.71 1.97*
------------------------------------------------- ------- -------- -------- --------
Ratio of expenses after expense reductions (%) 1.44 1.50 1.51 1.51*
------------------------------------------------- ------- -------- -------- --------
Ratio of net investment income (%) 2.22 1.92 1.14 1.39*
------------------------------------------------- ------- -------- -------- --------
Portfolio turnover rate (%) 114 77 71 28**
------------------------------------------------- ------- -------- -------- --------
(a) For the period from July 5, 2006 (commencement of operations) to
December 31, 2006.
(b) Based on average shares outstanding during the period.
(c) Total return does not reflect the effect of any sales charges.
(d) Total return would have been lower had certain expenses not been
reduced.
* Annualized
** Not annualized
*** Amount is less than $.005.
22
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - CLASS C
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006(A)
------------------------------------------------ ------------- -------------- -------------- --------------
SELECTED PER SHARE DATA
--------------------------------------------------------------- - - -
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.40 $ 10.62 $ 12.23 $ 10.00
------------------------------------------------ ------- -------- -------- --------
Income (loss) from investment operations:
Net investment income(b) .10 .09 .03 .02
------------------------------------------------ ------- -------- -------- --------
Net realized and unrealized gain (loss) 1.81 ( 5.31) ( 1.06) 2.35
------------------------------------------------ ------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 1.91 ( 5.22) ( 1.03) 2.37
------------------------------------------------ ------- -------- -------- --------
Less distributions from:
Net investment income ( .56) - ( .41) ( .09)
------------------------------------------------ ------- -------- -------- --------
Net realized gains - - ( .17) ( .05)
------------------------------------------------ ------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .56) - ( .58) ( .14)
------------------------------------------------ ------- -------- -------- --------
Redemption fee .00*** .00*** .00*** .00***
------------------------------------------------ ------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 6.75 $ 5.40 $ 10.62 $ 12.23
------------------------------------------------ ------- -------- -------- --------
Total Return (%)(c,d) 35.68 (49.15) ( 8.67) 23.75**
------------------------------------------------ ------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------- -------- -------- --------
Net assets, end of period ($ millions) 25 30 90 27
------------------------------------------------ ------- -------- -------- --------
Ratio of expenses before expense reductions (%) 2.56 2.49 2.42 2.51*
------------------------------------------------- ------- -------- -------- --------
Ratio of expenses after expense reductions (%) 2.21 2.26 2.40 2.45*
------------------------------------------------- ------- -------- -------- --------
Ratio of net investment income (%) 1.45 1.16 .25 .45*
------------------------------------------------- ------- -------- -------- --------
Portfolio turnover rate (%) 114 77 71 28**
------------------------------------------------- ------- -------- -------- --------
(a) For the period from July 5, 2006 (commencement of operations) to
December 31, 2006.
(b) Based on average shares outstanding during the period.
(c) Total return does not reflect the effect of any sales charges.
(d) Total return would have been lower had certain expenses not been
reduced.
* Annualized
** Not annualized
*** Amount is less than $.005.
23
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006(A)
------------------------------------------------ ------------- -------------- -------------- --------------
SELECTED PER SHARE DATA
--------------------------------------------------------------- - - -
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.38 $ 10.49 $ 12.23 $ 10.00
------------------------------------------------ ------- -------- -------- --------
Income (loss) from investment operations:
Net investment income(b) .15 .18 .17 .09
------------------------------------------------ ------- -------- -------- --------
Net realized and unrealized gain (loss) 1.83 ( 5.25) ( 1.07) 2.35
------------------------------------------------ ------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 1.98 ( 5.07) ( .90) 2.44
------------------------------------------------ ------- -------- -------- --------
Less distributions from:
Net investment income ( .64) ( .03) ( .67) ( .16)
------------------------------------------------ ------- -------- -------- --------
Net realized gains - - ( .17) ( .05)
------------------------------------------------ ------- -------- -------- --------
Return of capital - ( .01) - -
------------------------------------------------ ------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .64) ( .04) ( .84) ( .21)
------------------------------------------------ ------- -------- -------- --------
Redemption fee .00*** .00*** .00*** .00***
------------------------------------------------ ------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 6.72 $ 5.38 $ 10.49 $ 12.23
------------------------------------------------ ------- -------- -------- --------
Total Return (%)(c) 37.07 (48.34) ( 7.64) 24.35**
------------------------------------------------ ------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------- -------- -------- --------
Net assets, end of period ($ millions) 206 158 180 5
------------------------------------------------ ------- -------- -------- --------
Ratio of expenses before expense reductions (%) 1.24 1.27 1.30 1.46*
------------------------------------------------- ------- -------- -------- --------
Ratio of expenses after expense reductions (%) 1.17 1.26 1.29 1.36*
------------------------------------------------- ------- -------- -------- --------
Ratio of net investment income (%) 2.49 2.16 1.35 1.54*
------------------------------------------------- ------- -------- -------- --------
Portfolio turnover rate (%) 114 77 71 28**
------------------------------------------------- ------- -------- -------- --------
(a) For the period from July 5, 2006 (commencement of operations) to
December 31, 2006.
(b) Based on average shares outstanding during the period.
(c) Total return would have been lower had certain expenses not been
reduced.
* Annualized
** Not annualized
*** Amount is less than $.005.
24
PROSPECTUS May 1, 2010 Financial Highlights
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - CLASS S
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006(A)
------------------------------------------------ ------------- -------------- -------------- --------------
SELECTED PER SHARE DATA
--------------------------------------------------------------- - - -
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.37 $ 10.50 $ 12.23 $ 10.00
------------------------------------------------ ------- -------- -------- --------
Income (loss) from investment operations:
Net investment income(b) .14 .18 .16 .08
------------------------------------------------ ------- -------- -------- --------
Net realized and unrealized gain (loss) 1.84 ( 5.27) ( 1.06) 2.36
------------------------------------------------ ------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 1.98 ( 5.09) ( .90) 2.44
------------------------------------------------ ------- -------- -------- --------
Less distributions from:
Net investment income ( .64) ( .03) ( .66) ( .16)
------------------------------------------------ ------- -------- -------- --------
Net realized gains - - ( .17) ( .05)
------------------------------------------------ ------- -------- -------- --------
Return of capital - ( .01) - -
------------------------------------------------ ------- -------- -------- --------
TOTAL DISTRIBUTIONS ( .64) ( .04) ( .83) ( .21)
------------------------------------------------ ------- -------- -------- --------
Redemption fee .00*** .00*** .00*** .00***
------------------------------------------------ ------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 6.71 $ 5.37 $ 10.50 $ 12.23
------------------------------------------------ ------- -------- -------- --------
Total Return (%)(c) 37.13 (48.48) ( 7.72) 24.41**
------------------------------------------------ ------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------- -------- -------- --------
Net assets, end of period ($ millions) 96 77 123 20
------------------------------------------------ ------- -------- -------- --------
Ratio of expenses before expense reductions (%) 1.83 1.87 1.70 1.50*
------------------------------------------------- ------- -------- -------- --------
Ratio of expenses after expense reductions (%) 1.29 1.26 1.35 1.41*
------------------------------------------------- ------- -------- -------- --------
Ratio of net investment income (%) 2.37 2.16 1.29 1.49*
------------------------------------------------- ------- -------- -------- --------
Portfolio turnover rate (%) 114 77 71 28**
------------------------------------------------- ------- -------- -------- --------
(a) For the period from July 5, 2006 (commencement of operations) to
December 31, 2006.
(b) Based on average shares outstanding during the period.
(c) Total return would have been lower had certain expenses not been
reduced.
* Annualized
** Not annualized
*** Amount is less than $.005.
25
PROSPECTUS May 1, 2010 Financial Highlights
APPENDIX
HYPOTHETICAL EXPENSE SUMMARY
Using the annual fund operating expense ratios presented in the fee tables in
the fund prospectus, the Hypothetical Expense Summary shows the estimated fees
and expenses, in actual dollars, that would be charged on a hypothetical
investment of $10,000 in the fund held for the next 10 years and the impact of
such fees and expenses on fund returns for each year and cumulatively, assuming
a 5% return for each year. The historical rate of return for the fund may be
higher or lower than 5% and, for money market funds, is typically less than 5%.
The tables also assume that all dividends and distributions are reinvested. The
annual fund expense ratios shown are net of any contractual fee waivers or
expense reimbursements, if any, for the period of the contractual commitment.
The tables reflect the maximum initial sales charge, if any, but do not reflect
any contingent deferred sales charge or redemption fees, if any, which may be
payable upon redemption. If contingent deferred sales charges or redemption
fees were shown, the "Hypothetical Year-End Balance After Fees and Expenses"
amounts shown would be lower and the "Annual Fees and Expenses" amounts shown
would be higher. Also, please note that if you are investing through a third
party provider, that provider may have fees and expenses separate from those of
the fund that are not reflected here. Mutual fund fees and expenses fluctuate
over time and actual expenses may be higher or lower than those shown.
The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the fund's prospectus to
consider the investment objectives, risks, expenses and charges of the fund
prior to investing.
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - CLASS A
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
5.75% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.66% -2.60% $ 9.739.80 $ 734.07
--- ----- ---- ------ ----------- ----------
2 10.25% 1.75% 0.56% $ 10,056.34 $ 173.22
--- ----- ---- ------ ----------- ----------
3 15.76% 1.75% 3.83% $ 10,383.17 $ 178.85
--- ----- ---- ------ ----------- ----------
4 21.55% 1.75% 7.21% $ 10,720.62 $ 184.66
--- ----- ---- ------ ----------- ----------
5 27.63% 1.75% 10.69% $ 11,069.04 $ 190.66
--- ----- ---- ------ ----------- ----------
6 34.01% 1.75% 14.29% $ 11,428.79 $ 196.86
--- ----- ---- ------ ----------- ----------
7 40.71% 1.75% 18.00% $ 11,800.22 $ 203.25
--- ----- ---- ------ ----------- ----------
8 47.75% 1.75% 21.84% $ 12,183.73 $ 209.86
--- ----- ---- ------ ----------- ----------
9 55.13% 1.75% 25.80% $ 12,579.70 $ 216.68
--- ----- ---- ------ ----------- ----------
10 62.89% 1.75% 29.89% $ 12,988.54 $ 223.72
--- ----- ---- ------ ----------- ----------
TOTAL $ 2,511.83
--- ----------
26
PROSPECTUS May 1, 2010 Appendix
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - CLASS C
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 2.41% 2.59% $ 10,259.00 $ 244.12
--- ----- ---- ----- ----------- ----------
2 10.25% 2.56% 5.09% $ 10,509.32 $ 265.83
--- ----- ---- ----- ----------- ----------
3 15.76% 2.56% 7.66% $ 10,765.75 $ 272.32
--- ----- ---- ----- ----------- ----------
4 21.55% 2.56% 10.28% $ 11,028.43 $ 278.97
--- ----- ---- ----- ----------- ----------
5 27.63% 2.56% 12.98% $ 11,297.52 $ 285.77
--- ----- ---- ----- ----------- ----------
6 34.01% 2.56% 15.73% $ 11,573.18 $ 292.75
--- ----- ---- ----- ----------- ----------
7 40.71% 2.56% 18.56% $ 11,855.57 $ 299.89
--- ----- ---- ----- ----------- ----------
8 47.75% 2.56% 21.45% $ 12,144.85 $ 307.21
--- ----- ---- ----- ----------- ----------
9 55.13% 2.56% 24.41% $ 12,441.18 $ 314.70
--- ----- ---- ----- ----------- ----------
10 62.89% 2.56% 27.45% $ 12,744.75 $ 322.38
--- ----- ---- ----- ----------- ----------
TOTAL $ 2,883.94
--- ----------
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - INSTITUTIONAL CLASS
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.24% 3.76% $ 10,376.00 $ 126.33
--- ----- ---- ----- ----------- ----------
2 10.25% 1.24% 7.66% $ 10,766.14 $ 131.08
--- ----- ---- ----- ----------- ----------
3 15.76% 1.24% 11.71% $ 11,170.94 $ 136.01
--- ----- ---- ----- ----------- ----------
4 21.55% 1.24% 15.91% $ 11,590.97 $ 141.12
--- ----- ---- ----- ----------- ----------
5 27.63% 1.24% 20.27% $ 12,026.79 $ 146.43
--- ----- ---- ----- ----------- ----------
6 34.01% 1.24% 24.79% $ 12,479.00 $ 151.94
--- ----- ---- ----- ----------- ----------
7 40.71% 1.24% 29.48% $ 12,948.21 $ 157.65
--- ----- ---- ----- ----------- ----------
8 47.75% 1.24% 34.35% $ 13,435.06 $ 163.58
--- ----- ---- ----- ----------- ----------
9 55.13% 1.24% 39.40% $ 13,940.22 $ 169.73
--- ----- ---- ----- ----------- ----------
10 62.89% 1.24% 44.64% $ 14,464.37 $ 176.11
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,499.98
--- ----------
27
PROSPECTUS May 1, 2010 Appendix
DWS RREEF GLOBAL REAL ESTATE SECURITIES FUND - CLASS S
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 1.41% 3.59% $ 10,359.00 $ 143.53
--- ----- ---- ----- ----------- ----------
2 10.25% 1.83% 6.87% $ 10,687.38 $ 192.57
--- ----- ---- ----- ----------- ----------
3 15.76% 1.83% 10.26% $ 11,026.17 $ 198.68
--- ----- ---- ----- ----------- ----------
4 21.55% 1.83% 13.76% $ 11,375.70 $ 204.98
--- ----- ---- ----- ----------- ----------
5 27.63% 1.83% 17.36% $ 11,736.31 $ 211.47
--- ----- ---- ----- ----------- ----------
6 34.01% 1.83% 21.08% $ 12,108.35 $ 218.18
--- ----- ---- ----- ----------- ----------
7 40.71% 1.83% 24.92% $ 12,492.19 $ 225.09
--- ----- ---- ----- ----------- ----------
8 47.75% 1.83% 28.88% $ 12,888.19 $ 232.23
--- ----- ---- ----- ----------- ----------
9 55.13% 1.83% 32.97% $ 13,296.74 $ 239.59
--- ----- ---- ----- ----------- ----------
10 62.89% 1.83% 37.18% $ 13,718.25 $ 247.19
--- ----- ---- ----- ----------- ----------
TOTAL $ 2,113.51
--- ----------
ADDITIONAL INDEX INFORMATION
The FTSE EPRA/NAREIT DEVELOPED INDEX is an unmanaged, market-weighted index
designed to represent general trends in eligible real estate equities
worldwide. Relevant real estate activities are defined as the ownership,
trading and development of income-producing real estate. The Index is designed
to reflect the stock performance of companies engaged in specific aspects of
major world real estate markets/regions. The Index is calculated using closing
market prices and translates into US dollars using Reuters closing price.
28
PROSPECTUS May 1, 2010 Appendix
TO GET MORE INFORMATION
SHAREHOLDER REPORTS. These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.
STATEMENT OF ADDITIONAL INFORMATION (SAI). This tells you more about the fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
For a free copy of any of these documents or to request other information about
the fund, contact DWS Investments at the phone number or address listed below.
SAIs and shareholder reports are also available through the DWS Investments Web
site at www.dws-investments.com. These documents and other information about
the fund are available from the EDGAR Database on the SEC's Internet site at
www.sec.gov. If you like, you may obtain copies of this information, after
paying a copying fee, by e-mailing a request to publicinfo@sec.gov or by
writing the SEC at the address listed below.
You can also review and copy these documents and other information about the
fund, including the fund's SAI, 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 or (202) 551-8090.
In order to reduce the amount of mail you receive and to help reduce expenses,
we generally send a single copy of any shareholder report and prospectus to
each household. If you do not want the mailing of these documents to be
combined with those for other members of your household, please contact your
financial advisor or call the number provided.
CONTACT INFORMATION
DWS INVESTMENTS PO Box 219151
Kansas City, MO
64121-9151
www.dws-investments.com
Class A or C: (800) 621-1048
Institutional Class: (800) 730-1313
Class S: (800) 728-3337
SEC 100 F Street, N.E.
Washington, D.C. 20549-1520
WWW.SEC.GOV
(800) SEC-0330
DISTRIBUTOR DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
SEC FILE NUMBER DWS Advisor Funds
DWS RREEF Global Real Estate Securi-
ties Fund
811-04760
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
(05/01/10) DRGRESF-1
[GRAPHIC APPEARS HERE]
PROSPECTUS
MAY 1, 2010
Tax Free Money Fund Investment
CLASS/TICKER INSTITUTIONAL SHARES BTTXX
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
[GRAPHIC APPEARS HERE]
TABLE OF CONTENTS
TAX FREE MONEY FUND INVESTMENT
Investment Objective........................... 1
Fees and Expenses of the Fund.................. 1
Principal Investment Strategy.................. 1
Main Risks..................................... 2
Past Performance............................... 3
Management..................................... 3
Purchase and Sale of Fund Shares............... 3
Tax Information................................ 3
Payments to Broker-Dealers and
Other Financial Intermediaries................. 3
FUND DETAILS
Other Policies................................. 4
Who Manages and Oversees the Fund.............. 4
Management..................................... 5
INVESTING IN THE FUND
Buying and Selling Shares...................... 6
How to Buy and Sell Shares..................... 6
Financial Intermediary Support Payments........ 7
Policies You Should Know About................. 8
Policies About Transactions.................... 8
How the Fund Calculates Share Price............ 10
Other Rights We Reserve........................ 11
Understanding Distributions and Taxes.......... 11
FINANCIAL HIGHLIGHTS........................... 13
APPENDIX....................................... 14
Hypothetical Expense Summary................... 14
-------------------------------------------------------------------------------
YOUR INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY, ENTITY OR PERSON.
-------------------------------------------------------------------------------
[Deutsche Asset Management LOGO]
A Member of the Deutsche Bank Group
TAX FREE MONEY FUND INVESTMENT
INVESTMENT OBJECTIVE
The fund seeks a high level of current income exempt from federal income taxes
consistent with liquidity and the preservation of capital by investing in high
quality, short-term, tax-exempt money market instruments.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares.
SHAREHOLDER FEES
(paid directly from your investment) None
-------------------------------------- -----
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a % of the value of your investment)
Management fee 0.15
------------------------------------------------ ----
Distribution/service
(12b-1) fees None
------------------------------------------------ -----
Other expenses (includes an administrative fee) 1.54
------------------------------------------------ -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.69
------------------------------------------------ -----
Less fee waiver/reimbursement 1.39
------------------------------------------------ -----
NET ANNUAL FUND OPERATING EXPENSES 0.30
------------------------------------------------ -----
The Advisor has contractually agreed through April 30, 2011 to maintain the
fund's total annual operating expenses, excluding extraordinary expenses,
taxes, brokerage and interest expense at a ratio no higher than 0.30%. The
agreement may only be terminated with the consent of the fund's Board.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
(including one year of capped expenses in each period) remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ---------
$31 $396 $787 $1,881
--- ---- ---- ------
PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal conditions, the fund invests at least 80% of its
assets in investments the income from which is excluded from federal income
taxes. Normally, the fund will not invest in municipal obligations that pay
interest that is subject to the federal alternative minimum tax.
The fund is managed in accordance with Rule 2a-7 under the Investment Company
Act of 1940, as amended. Fund securities are denominated in US dollars and have
remaining maturities of 397 days (about 13 months) or less at the time of
purchase. The fund may also invest in securities that have features that have
the effect of reducing their maturities to 397 days or less at the time of
purchase. The fund maintains a dollar-weighted average maturity of 90 days or
less.
Although the fund seeks to maintain a stable $1.00 share price, you could lose
money by investing in the fund. All money market instruments can change in
value when interest rates or an issuer's creditworthiness change.
The fund primarily invests in the following types of investments:
o Municipal trust receipts ("MTRs"), also called municipal asset-backed
securities, synthetic short-term derivatives, floating rate trust
certificates, or municipal securities trust receipts. MTRs are trusts that
hold municipal securities and that offer purchasers (such as the fund) a
conditional right to sell their interest in the underlying securities to a
financial institution at par value plus accrued interest. The fund may
invest up to 50% of its net assets in MTRs, as well as an additional 10% of
net assets on a temporary basis to manage inflows into the fund.
o General obligation notes and bonds, which an issuer backs with its full
faith and credit (taxing power).
1
PROSPECTUS May 1, 2010 Tax Free Money Fund Investment
o Revenue notes and bonds, which are payable from specific revenue sources.
These are often tied to the public works projects the bonds are financing,
but are not generally backed by the issuer's taxing power.
o Tax-exempt commercial paper, which is tax-exempt debt of borrowers that
typically matures in 270 days or less.
o Short-term municipal notes, such as tax anticipation notes, that are issued
in anticipation of the receipt of tax revenues.
o Municipal obligations backed by letters of credit (a document issued by a
bank guaranteeing the issuer's payments for a stated amount), general bank
guarantees or municipal bond insurance.
o Floating rate bonds, whose interest rates vary with changes in specified
market rates or indices. The fund may invest in high quality floating rate
bonds with maturities of one year or more if it has the right to sell them
back at their face value prior to maturity. The fund may also invest in
bonds that have features that reduce their maturities on their purchase
date.
o Tax-exempt private activity bonds, which are revenue bonds that finance
non-governmental activities, such as private industry construction and
which meet certain tax law requirements.
MANAGEMENT PROCESS. The fund buys short-term municipal obligations that at the
time of purchase:
o have received one of the two highest short-term ratings from two nationally
recognized statistical rating organizations (NRSROs) or one NRSRO if that
NRSRO is the only NRSRO that rates such obligations;
o are unrated, but are deemed by the Advisor to be of comparable quality to
one of the two highest short-term ratings; or
o have no short-term rating, but are rated in one of the top three highest
long-term rating categories by a NRSRO or are deemed by the Advisor to be
of comparable quality.
Working in consultation with portfolio management, a credit team screens
potential securities and develops a list of those that the fund may buy.
Portfolio management, looking for attractive yield and weighing considerations
such as credit quality, economic outlooks and possible interest rate movements,
then decides which securities on this list to buy. Portfolio management may
adjust the fund's exposure to interest rate risk, typically seeking to take
advantage of possible rises in interest rates and to preserve yield when
interest rates appear likely to fall.
MAIN RISKS
There are several risk factors that could reduce the yield you get from the
fund, cause the fund's performance to trail that of other investments, or cause
you to lose money.
MONEY MARKET FUND RISK. An investment in the fund is not insured or guaranteed
by the FDIC or any other government agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, this share price isn't
guaranteed, and if it falls below $1.00 you would lose money. The Advisor is
not obligated to take any action to maintain the $1.00 share price. The share
price could fall below $1.00 as a result of the actions of one or more large
investors in the fund. The credit quality of the fund's holdings can change
rapidly in certain markets, and the default of a single holding could cause the
fund's share price to fall below $1.00, as could periods of high redemption
pressures and/or illiquid markets. The actions of a few large investors in one
class of shares of the fund may have a significant adverse effect on the share
prices of all classes of shares of the fund.
INTEREST RATE RISK. Rising interest rates could cause the value of the fund's
investments - and therefore its share price as well - to decline. Conversely,
any decline in interest rates is likely to cause the fund's yield to decline,
and during periods of unusually low interest rates, the fund's yield may
approach zero. Over time, the total return of a money market fund may not keep
pace with inflation, which would result in a net loss of purchasing power for
long-term investors.
CREDIT RISK. The fund's performance could be hurt if a money market instrument
declines in credit quality or goes into default, or if an issuer does not make
timely payments of interest or principal. For money market instruments that
rely on third-party guarantors to support their credit quality, the same risks
may apply if the financial condition of the guarantor deteriorates or the
guarantor ceases insuring money market instruments. Because guarantors may
insure many types of debt obligations, including subprime mortgage bonds and
other high-risk bonds, their financial condition could deteriorate as a result
of events that have little or no connection to securities owned by the fund.
Some securities issued by US government agencies or instrumentalities are
backed by the full faith and credit of the US government. Others are supported
only by the credit of that agency or instrumentality. For this latter group, if
there is a potential or actual loss of principal and interest of these
securities, the US government might provide financial support, but has no
obligation to do so.
SECURITY SELECTION RISK. Although short-term securities are relatively stable
investments, it is possible that the securities in which the fund invests will
not perform as expected. This could cause the fund's returns to lag behind
those of similar money market mutual funds and could result in a decline in
share price.
MUNICIPAL TRUST RECEIPTS RISK. The fund's investment in MTRs is subject to
similar risks as other investments in debt obligations, including interest rate
risk, credit risk and security selection risk. Additionally, investments in
MTRs raise certain tax issues that may not be presented by direct investments
in municipal bonds. There is some risk that certain issues could be resolved in
a manner that could adversely impact the performance of the fund.
2
PROSPECTUS May 1, 2010 Tax Free Money Fund Investment
TAX RISK. Any distributions to shareholders that represent income from taxable
securities will generally be taxable as ordinary income at both the state and
federal levels, while other distributions, such as capital gains, are taxable
to the same extent they would be for any mutual fund. New federal or state
governmental action could adversely affect the tax-exempt status of securities
held by the fund, resulting in higher tax liability for shareholders and
potentially hurting fund performance as well.
COUNTERPARTY RISK. A financial institution or other counterparty with whom the
fund does business (such as trading or securities lending), or that
underwrites, distributes or guarantees any investments or contracts that the
fund owns or is otherwise exposed to, may decline in financial health and
become unable to honor its commitments. This could cause losses for the fund or
could delay the return or delivery of collateral or other assets to the fund.
PREPAYMENT AND EXTENSION RISK. When interest rates fall, issuers of high
interest debt obligations may pay off the debts earlier than expected
(prepayment risk), and the fund may have to reinvest the proceeds at lower
yields. When interest rates rise, issuers of lower interest debt obligations
may pay off the debts later than expected (extension risk), thus keeping the
fund's assets tied up in lower interest debt obligations. Prepayments could
also create capital gains tax liability in some instances. Any unexpected
behavior in interest rates could increase the volatility of the fund's yield
and could hurt fund performance.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk. Past
performance may not indicate future results. All performance figures below
assume that dividends were reinvested. The 7-DAY YIELD, which is often referred
to as the "current yield," is the income generated by the fund over a seven-day
period. This amount is then annualized, which means that we assume the fund
generates the same income every week for a year. For more recent performance
figures and the current yield, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
CALENDAR YEAR TOTAL RETURNS (%) (Institutional Shares)
Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
Best Quarter: 0.13%, Q2 2009 Worst Quarter: 0.00%, Q1 2009
Year-to-Date as of 3/31/10: 0.02%
AVERAGE ANNUAL TOTAL RETURNS
(for periods ended 12/31/2009 expressed as a %)
1
YEAR SINCE INCEPTION
--------- ----------------
0.24 0.26
---- ----
Commencement of operations began on 11/11/08
Total returns would have been lower if operating expenses hadn't been reduced.
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $100,000 and there is no minimum additional
investment. However, your financial advisor may get its own minimum
investments.
TO PLACE ORDERS
MAIL First Investment Deutsche Asset Management c/o
DWS Investments, PO Box 219356
Kansas City, MO 64121-9356
Additional Investments Deutsche Asset Management c/o
DWS Investments, PO Box 219154
Kansas City, MO 64121-9154
Exchanges and Deutsche Asset Management c/o
Redemptions DWS Investments, PO Box 219557
Kansas City, MO 64121-9557
EXPEDITED MAIL Deutsche Asset Management c/o
DWS Investments, 210 West 10th Street
Kansas City, MO 64105-1614
TAX INFORMATION
The fund's distributions (distributions are declared daily and paid monthly)
are generally exempt from regular federal income tax. The fund may include
capital gains and losses in its monthly dividend. Net capital gains may also be
paid annually. A portion of the fund's dividends may be subject to federal
income tax, including the federal alternative minimum tax.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
3
PROSPECTUS May 1, 2010 Tax Free Money Fund Investment
FUND DETAILS
OTHER POLICIES
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other matters to know about:
o Although major changes tend to be infrequent, the fund's Board could change
the fund's investment objective without seeking shareholder approval.
However, the fund's policy of investing at least 80% of its assets in
investments the income from which is excluded from federal income taxes
cannot be changed without shareholder approval.
o For temporary defensive purposes or when acceptable short-term municipal
securities are not available, more than 20% of the fund's assets may be
held in cash or invested in short-term taxable instruments, including
obligations of the US Government, its agencies or instrumentalities, other
short-term high quality rated debt securities or, if unrated, determined to
be of comparable quality in the opinion of the Advisor, commercial paper,
bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances, and repurchase agreements. Short-term
investments may also include shares of money market mutual funds.
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to
request a copy of the Statement of Additional Information (the back cover tells
you how to do this).
Keep in mind that there is no assurance that the fund will achieve its
objective.
A complete list of the fund's portfolio holdings is posted twice each month on
www.dws-investments.com (the Web site does not form a part of this prospectus).
Portfolio holdings as of the 15th day of each month are posted to the Web site
on or after month-end and portfolio holdings as of each month-end are posted to
the Web site on or after the 14th day of the following month. More frequent
posting of portfolio holdings information may be made from time to time on
www.dws-investments.com. The posted portfolio holdings information is available
by fund and generally remains accessible at least until the date on which the
fund files its Form N-CSR or N-Q with the Securities and Exchange Commission
for the period that includes the date as of which the posted information is
current. The fund also may post on the Web site, on the same or a more frequent
basis, various depictions of portfolio characteristics such as the allocation
of the portfolio across various security types, market sectors and sub-sectors
and maturities and risk characteristics of the portfolio. The fund's Statement
of Additional Information includes a description of the fund's policies and
procedures with respect to the disclosure of the fund's portfolio holdings.
WHO MANAGES AND OVERSEES THE FUND
THE INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), with
headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor
for the fund. Under the oversight of the Board, the Advisor makes investment
decisions, buys and sells securities for the fund and conducts research that
leads to these purchase and sale decisions. The Advisor provides a full range
of global investment advisory services to institutional and retail clients.
DWS Investments is part of the Asset Management division of Deutsche Bank AG
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.
4
PROSPECTUS May 1, 2010 Fund Details
MANAGEMENT FEE. The Advisor receives a management fee from the fund. Below is
the actual rate paid by the fund for the most recent fiscal year, as a
percentage of the fund's average daily net assets.
FUND NAME FEE PAID
---------------------------- ---------
Tax Free Money Fund Invest-
ment 0.15%
---------------------------- ----
A discussion regarding the basis for the Board's approval of the fund's
investment management agreement is contained in the shareholder report for the
annual period ended December 31 (see "Shareholder reports" on the back cover).
Under a separate administrative services agreement between the fund and the
Advisor, the fund pays the Advisor a fee of 0.10% for providing most of the
fund's administrative services.
MULTI-MANAGER STRUCTURE. The Advisor, subject to the approval of the Board, has
ultimate responsibility to recommend the hiring, termination and replacement of
subadvisors. The fund and the Advisor have received an order from the SEC that
allows the fund and the Advisor to utilize a multi-manager structure in
managing the fund's assets. Pursuant to the SEC order, the Advisor, with the
approval of the fund's Board, is permitted to select subadvisors that are not
affiliates of the Advisor ("non-affiliated subadvisors") to manage all or a
portion of the fund's assets without obtaining shareholder approval. The
Advisor also has the discretion to terminate any subadvisor and allocate and
reallocate the fund's assets among any non-affiliated subadvisors. The SEC
order also permits the Advisor, subject to the approval of the Board, to
materially amend an existing subadvisory agreement with a non-affiliated
subadvisor without shareholder approval. The fund and the Advisor are subject
to the conditions imposed by the SEC order, including the condition that within
90 days of hiring of a new non-affiliated subadvisor, the fund will provide
shareholders with an information statement containing information about the new
non-affiliated subadvisor.
The fund and the Advisor have also filed an exemptive application with the SEC
requesting an order that would extend the relief granted with respect to
non-affiliated subadvisors to certain subadvisors that are affiliates of the
Advisor ("affiliated subadvisors"). If such relief is granted by the SEC, the
Advisor, with the approval of the fund's Board, would be able to hire
non-affiliated and/or affiliated subadvisors to manage all or a portion of the
fund's assets without obtaining shareholder approval. The Advisor would also
have the discretion to terminate any subadvisor and allocate and reallocate the
fund's assets among any other subadvisors (including terminating a
non-affiliated subadvisor and replacing them with an affiliated subadvisor).
The Advisor, subject to the approval of the Board, would also be able to
materially amend an existing subadvisory agreement with any such subadvisor
without shareholder approval. There can be no assurance that such relief will
be granted by the SEC. The fund and the Advisor will be subject to any new
conditions imposed by the SEC.
TRANSFER AGENT. DWS Investments Service Company ("DISC"), also an affiliate of
DIMA, serves as the fund's transfer agent. DISC, or your financial advisor,
performs the functions necessary to establish and maintain your account.
Besides setting up the account and processing your purchase and sale orders,
these functions include:
o keeping accurate, up-to-date records for your individual account;
o implementing any changes you wish to make in your account information;
o processing your requests for cash dividends and distributions from the fund;
and
o answering your questions on the fund's investment performance or
administration.
DISC delegates certain of these functions to a third party.
Financial advisors include brokers or any bank, dealer or any other financial
institutions that have sub-shareholder servicing agreements with DISC.
Financial advisors may charge additional fees to investors only for those
services not otherwise included in the DISC servicing agreement, such as cash
management or special trust or retirement investment reporting.
MANAGEMENT
A group of investment professionals is responsible for the day-to-day
management of the fund. These investment professionals have a broad range of
experience managing money market funds.
5
PROSPECTUS May 1, 2010 Fund Details
INVESTING IN THE FUND
BUYING AND SELLING SHARES
TO CONTACT DEUTSCHE ASSET MANAGEMENT
BY PHONE
CLASS NUMBER
------- ---------------
INST (800) 730-1313
------- ---------------
BY MAIL
TYPE ADDRESS
----------------- ------------------------------------------------
EXPEDITED MAIL
All Requests Deutsche Asset Management
----------------- c/o DWS Investments
Attn: (see department names under Regular Mail)
210 West 10th Street
Kansas City, MO 64121-1614
------------------------------------------------
REGULAR MAIL
New Accounts Deutsche Asset Management
c/o DWS Investments
Attn: New Applications
P.O. Box 219356
Kansas City, MO 64121-9356
Additional Deutsche Asset Management
Investments c/o DWS Investments
Attn: Purchases
P.O. Box 219154
Kansas City, MO 64121-9154
Exchanges and Deutsche Asset Management
Redemptions c/o DWS Investments
Attn: Transaction Processing
P.O. Box 219557
Kansas City, MO 64121-9557
HOW TO BUY AND SELL SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $100,000, and there is no minimum additional
investment.
Shares of the fund may be offered to directors and trustees of any mutual fund
advised or administered by DIMA or its affiliates, employees of Deutsche Bank
AG, their spouses and minor children, or institutional clients and qualified
purchasers that are clients of a division of Deutsche Bank AG without regard to
the minimum investment required. The fund reserves the right to modify the
above eligibility requirements and investment minimum at any time.
HOW TO OPEN YOUR ACCOUNT
Mail: Complete and sign the account application
------------ that accompanies this prospectus. (You may
obtain additional applications by calling the
Service Center.) Mail the completed applica-
tion along with a check payable to the fund
you have selected to the Service Center. Be
sure to include the fund number. The appli-
cable addresses are shown above.
----------------------------------------------
Wire: Call the Service Center to set up a wire
------------ account.
----------------------------------------------
Fund Name: Please use the complete fund name.
------------ ----------------------------------------------
Please note that your account cannot become activated until we receive a
completed account application.
If this is your first investment through a tax-sheltered retirement plan, such
as an IRA, you will need a special application form. This form is available
from your financial advisor, or by calling the Service Center at (800)
730-1313.
BUYING AND SELLING SHARES BY MAIL
BUYING: Send your check, payable to the fund you have selected, to the Service
Center. Be sure to include the fund number and your account number on your
check. If you are investing in more than one fund, make your check payable to
"Deutsche Asset Management" and include your account number, the names and
numbers of the fund you have selected, and the dollar amount or percentage you
would like invested in each fund. Mailing addresses are shown above.
SELLING: Send a signed letter to the Service Center with your name, your fund
number and account number, the fund's name, and either the number of shares you
wish to sell or the dollar amount you wish to receive. In certain
circumstances, a signature guarantee may be required to sell shares of the fund
by mail. For information about a signature guarantee, see "Signature
Guarantee." Unless exchanging into another Deutsche Asset Management fund or
DWS fund, you must submit a written authorization to sell shares in a
retirement account.
6
PROSPECTUS May 1, 2010 Investing in the Fund
For more information on how to buy or sell shares by mail, refer to "Policies
about transactions - Transaction Processing."
BUYING AND SELLING SHARES BY WIRE
BUYING: You may buy shares by wire only if your account is authorized to do so.
Instruct your bank to send payment by wire using the wire instructions below.
Bank Name: State Street Bank Boston
------------- --------------------------------------------
Routing No: 011000028
------------- ---------
Attn: DWS Investments
------------- --------------------------------------------
DDA No: 99028102
------------- ---------
FBO: (Account name) (Account number)
------------- -------------------------------------------
Credit: (Fund name, Fund number and, if applicable,
-------------
class name) (Refer to the start of "The
Fund's Main Investment Strategy" above for
the fund number.)
--------------------------------------------
Refer to your account statement for the account name and number. Wire transfers
normally take two or more hours to complete. Wire transfers may be restricted
on bank holidays and at certain other times.
SELLING: You may sell shares by wire only if your account is authorized to do
so. You will be paid for redeemed shares by wire transfer of funds to your
financial advisor or bank upon receipt of a duly authorized redemption request
as promptly as feasible. For your protection, you may not change the
destination bank account over the phone.
For more information on how to buy or sell shares by wire, refer to "Policies
about transactions - Transaction Processing."
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to the fund, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of fund shares or the retention and/or servicing of fund
investors and fund shares ("revenue sharing"). Such revenue sharing payments
are in addition to any distribution or service fees payable under any Rule
12b-1 or service plan of the fund, any record keeping/sub-transfer agency/
networking fees payable by the fund (generally through the Distributor or an
affiliate) and/or the Distributor to certain financial advisors for performing
such services and any sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table
or elsewhere in this prospectus or the Statement of Additional Information as
payable to all financial advisors. For example, the Advisor, the Distributor
and/or their affiliates may compensate financial advisors for providing the
fund with "shelf space" or access to a third party platform or fund offering
list or other marketing programs, including, without limitation, inclusion of
the fund on preferred or recommended sales lists, mutual fund "supermarket"
platforms and other formal sales programs; granting the Distributor access to
the financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and obtaining other forms of
marketing support.
The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of the fund attributable to the financial
advisor, the particular fund or fund type or other measures as agreed to by the
Advisor, the Distributor and/or their affiliates and the financial advisors or
any combination thereof. The amount of these revenue sharing payments is
determined at the discretion of the Advisor, the Distributor and/or their
affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
0.01% up to 0.26% of assets of the fund serviced and maintained by the
financial advisor, 0.05% to 0.25% of sales of the fund attributable to the
financial advisor, a flat fee of $4,000 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of the fund or of any particular share class of the fund. You
should review your financial advisor's compensation disclosure and/or talk to
your financial advisor to obtain more information on how this compensation may
have influenced your financial advisor's recommendation of the fund. Additional
information regarding these revenue sharing payments is included in the fund's
Statement of Additional Information, which is available to you on request at no
charge (see the back cover of this prospectus for more information on how to
request a copy of the Statement of Additional Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. or ExpertPlan Inc. on the DWS Investments branded retirement plan
platform (the "Platform") with the level of revenue sharing payments
7
PROSPECTUS May 1, 2010 Investing in the Fund
being based upon sales of both the DWS funds and the non-DWS funds by the
financial advisor on the Platform or current assets of both the DWS funds and
the non-DWS funds serviced and maintained by the financial advisor on the
Platform.
It is likely that broker-dealers that execute portfolio transactions for the
fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.
POLICIES YOU SHOULD KNOW ABOUT
Along with the information on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on
distributions and taxes, applies to all investors, including those investing
through a financial advisor.
If you are investing through a financial advisor or through a retirement plan,
check the materials you received from them about how to buy and sell shares
because particular financial advisors or other intermediaries may adopt
policies, procedures or limitations that are separate from those described in
this prospectus. Please note that a financial advisor may charge fees separate
from those charged by the fund and may be compensated by the fund.
Keep in mind that the information in this prospectus applies only to the shares
offered herein. Other share classes are described in a separate prospectus and
have different fees, requirements and services.
POLICIES ABOUT TRANSACTIONS
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, we will ask for your name, address, date of birth and
other information that will allow us to identify you. Some or all of this
information will be used to verify the identity of all persons opening an
account.
We might request additional information about you (which may include certain
documents, such as articles of incorporation for companies) to help us verify
your identity and, in some cases, more information and/or documents may be
required to conduct the verification. The information and documents will be
used solely to verify your identity.
We will attempt to collect any missing required and requested information by
contacting you or your financial advisor. If we are unable to obtain this
information within the time frames established by the fund, then we may reject
your application and order.
The fund will not invest your purchase until all required and requested
identification information has been provided and your application has been
submitted in "good order." After we receive all the information, your
application is deemed to be in good order and we accept your purchase, you will
receive the net asset value per share next calculated.
If we are unable to verify your identity within time frames established by the
fund, after a reasonable effort to do so, you will receive written
notification.
With certain limited exceptions, only US residents may invest in the fund.
Because orders placed through a financial advisor must be forwarded to the
transfer agent before they can be processed, you'll need to allow extra time.
Your financial advisor should be able to tell you approximately when your order
will be processed. It is the responsibility of your financial advisor to
forward your order to the transfer agent in a timely manner.
TELEPHONE TRANSACTIONS. You are automatically entitled to telephone transaction
privileges but you may elect not to have them when you open your account or by
contacting Service Center at (800) 730-1313 at a later date.
TRANSACTION PROCESSING. Orders for the purchase of shares by wire transfer will
normally be effective at the share price next computed after receipt of the
wire transfer of the amount to be invested. If a wire transfer purchase order
is received in good order before 12:00 p.m. Eastern time, it will normally
receive the dividend for that day.
Shareholders known to the fund may notify the Service Center in advance of
their wire transfer purchase by calling the Service Center prior to the 12:00
p.m. Eastern time cut-off time and providing the amount of the order. The
investor will receive a confirmation number for the trade. If the fund receives
the wire transfer before the close of the Federal Funds wire system, the trade
will be entitled to that day's dividend. If the fund does not receive the wire
transfer by the close of the Federal Funds wire system, the trade may not
receive the dividend for that day and, depending upon the circumstances, the
trade may receive the dividend for the following business day or may be
canceled or rejected and, in any case, the investor may be charged for any
losses or fees that result, which may be paid by deductions from their account
or otherwise. The fund's Distributor may refuse to allow any investor to trade
with the fund in this manner and may require that the wire transfer of purchase
proceeds be received before the trade is considered in good order.
8
PROSPECTUS May 1, 2010 Investing in the Fund
Investments by check will be effective on the business day following receipt
and will earn dividends the following business day. If you pay for shares by
check and the check fails to clear, we have the right to cancel your order,
hold you liable or charge you or your account for any losses or fees the fund
or its agents have incurred.
Orders processed through dealers or other financial services firms via
Fund/SERV will be effected at the share price calculated on the trade day
(normally the date the order is received). Purchases processed via Fund/SERV
will begin earning dividends on the day the fund receives the payment
(typically the next business day). For redemptions processed via Fund/SERV, you
generally will receive dividends accrued up to, but not including, the business
day that payment for your shares is made.
When selling shares, shareholders generally receive dividends up to, but not
including, the business day following the day on which the shares were sold. To
sell shares, you must state whether you would like to receive the proceeds by
wire or check.
In order to receive proceeds by wire, contact the Service Center before 12:00
p.m. Eastern time. After you inform the Service Center of the amount of your
redemption, you will receive a trade confirmation number. If the fund receives
a sell request before 12:00 p.m. Eastern time and the request calls for
proceeds to be sent out by wire, the proceeds will normally be wired on the
same day. However, the shares sold will not earn that day's dividend.
As noted below, proceeds of a redemption may be delayed. The ability to receive
"same day" wire redemption proceeds can be affected by a variety of
circumstances including the time that the request is made, the level of
redemption requests and purchase orders and general market conditions. A
request for a same day wire that is received earlier in the day will be given
priority over a request received later in the day in the event that it is
necessary to limit the amount of same day wire redemptions.
SUB-MINIMUM BALANCES. The fund may close your account and send you the proceeds
if your balance falls below $50,000; we will give you 60 days' notice so you
can either increase your balance or close your account (these policies don't
apply to investor with $100,000 or more in DWS fund shares).
CHECKWRITING enables you to sell shares of the fund by writing a check. Your
investment keeps earning dividends until your check clears. Please note that we
will not accept checks for less than $250. Note as well that we can't honor any
check larger than your balance at the time the check is presented to us. It is
not a good idea to close out an account using a check because the account
balance could change between the time you write the check and the time it is
processed. Please keep in mind that if you make a purchase by check and that
check has not yet cleared, those funds will not be available for immediate
redemption.
REGULAR INVESTMENTS AND WITHDRAWALS enable you to set up a link between the
fund account and a bank account. Once this link is in place, you can move money
between the two with a phone call. You'll need to make sure your bank has
Automated Clearing House (ACH) services. Transactions take two to three days to
be completed. The minimum transaction is $50, and the account must have a
balance of at least $10,000 to qualify for these withdrawals.
THE FUND ACCEPTS AUTOMATED CLEARING HOUSE ("ACH") debit entries for accounts
that have elected the checkwriting redemption privilege. Upon receipt of an ACH
debit entry referencing your account number you authorize us to redeem shares
in your account to pay the entry to the third party originating the debit. Your
fund account statement will show all ACH debit entries in your account. IN CASE
OF ERRORS OR QUESTIONS ABOUT YOUR TRANSACTIONS OR PRE-AUTHORIZED TRANSFERS
please contact your financial advisor as soon as possible if you believe your
statement reflects an improper charge or if you need more information about an
ACH debit entry transaction. Your financial advisor must contact the
Shareholder Service Agent within sixty (60) days of the fund sending you the
first fund account statement on which an improper charge appears.
THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you currently have
shares in certificated form, you must include the share certificates properly
endorsed or accompanied by a duly executed stock power when exchanging or
redeeming shares. You may not exchange or redeem shares in certificate form by
telephone or via the Internet.
WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we don't
charge a fee to send or receive wires, it's possible that your bank may do so.
Wire transactions are generally completed within 24 hours. The fund can only
send wires of $1,000 or more and accept wires of $50 or more.
THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check drawn on a US
bank, a bank or Federal Funds wire transfer or an electronic bank transfer. The
fund does not accept third party checks. A third party check is a check made
payable to one or more parties and offered as payment to one or more other
parties (e.g., a check made payable to you that you offer as payment to someone
else). Checks should normally be payable to the fund or "Deutsche Asset
Management" and drawn by you or a financial institution on your behalf with
your name or account number included with the check. If you pay for shares by
check and the check fails to clear, we have the right to cancel your order,
hold you liable or charge you or your account for any losses or fees the fund
or its agents have incurred.
9
PROSPECTUS May 1, 2010 Investing in the Fund
SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth of shares
or send proceeds to a third party or to a new address, you'll usually need to
place your order in writing and include a signature guarantee. However, if you
want money transferred electronically to a bank account that is already on file
with us, you don't need a signature guarantee. Also, generally you don't need a
signature guarantee for an exchange, although we may require one in certain
other circumstances.
A signature guarantee is simply a certification of your signature - a valuable
safeguard against fraud. You can get a signature guarantee from an eligible
guarantor institution, including commercial banks, savings and loans, trust
companies, credit unions, member firms of a national stock exchange or any
member or participant of an approved signature guarantor program. We require
stamps from members of a medallion signature guarantee program. A notarized
document cannot be accepted in lieu of a signature guarantee.
SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION ACCOUNTS may
require additional documentation. Please call DWS Investments (see phone
numbers on the back cover) or contact your financial advisor for more
information.
MONEY FROM SHARES YOU SELL is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are circumstances when it could be longer,
including, but not limited to, when you are selling shares you bought recently
by check or ACH (the funds will be placed under a 10 calendar day hold to
ensure good funds) or when unusual circumstances prompt the SEC to allow
further delays. Certain expedited redemption processes (e.g., redemption
proceeds by wire) may also be delayed or unavailable when you are selling
shares recently purchased or in the event of the closing of the Federal Reserve
wire payment system. The fund reserves the right to suspend or postpone
redemptions as permitted pursuant to Section 22(e) of the 1940 Act. Generally,
those circumstances are when 1) the New York Stock Exchange is closed other
than customary weekend or holiday closings; 2) the SEC determines that trading
on the New York Stock Exchange is restricted; 3) the SEC determines that an
emergency exists which makes the disposal of securities owned by the fund or
the fair determination of the value of the fund's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also be delayed in the event of a
non-routine closure of the Federal Reserve wire payment system. For additional
rights reserved by the fund, please see "Other rights we reserve."
EXCHANGE PRIVILEGE. You can exchange all or part of your shares for shares of
certain other Deutsche Asset Management or DWS funds. When you exchange shares,
you are selling shares in one fund to purchase shares in another. Exchanges are
a shareholder privilege, not a right: we may reject any exchange order. Before
buying shares through an exchange, you should be sure to obtain a copy of that
fund's prospectus and read it carefully. You will receive a written
confirmation of each transaction from the Service Center or your financial
advisor.
Please note the following conditions:
o The accounts between which the exchange is taking place must have the same
name, address and taxpayer ID number.
o You may make the exchange by phone (if your account has the exchange by
phone feature) or by letter.
o If you are maintaining a taxable account, you may have to pay taxes on the
exchange.
o Your exchange must meet the minimum investment requirement for the fund
being purchased.
o The accounts between which you exchange must be the same share class.
ACCOUNT STATEMENTS. We or your financial advisor will generally furnish you
with a written confirmation of every transaction that affects your account
balance. You will also receive periodic statements reflecting the balances in
your account.
SHORT-TERM TRADING. Since money market funds hold short-term instruments and
are intended to provide liquidity to shareholders, the Advisor does not monitor
or limit short-term or excessive trading activity in the fund and, accordingly,
the Board of the fund has not approved any policies and procedures designed to
limit this activity. However, the fund reserves the right to and may reject or
cancel a purchase or exchange order into the fund for any reason, including if,
in the opinion of the Advisor, there appears to be a pattern of short-term or
excessive trading by an investor in another Deutsche Asset Management fund or
DWS fund.
HOW THE FUND CALCULATES SHARE PRICE
To calculate net asset value, or NAV, each share class uses the following
equation:
TOTAL TOTAL TOTAL NUMBER OF
- / = NAV
( )
ASSETS LIABILITIES SHARES OUTSTANDING
The price at which you buy and sell shares is based on the NAV per share next
calculated after the order is received and accepted by the transfer agent.
IN VALUING SECURITIES, we typically use amortized cost (the method used by most
money market funds) to account for any premiums or discounts above or below the
face value of any securities the fund buys, and round the per share NAV to the
nearest whole cent.
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (the
"Exchange") is open. Normally, the fund calculates its share price once every
business day as of the close of regular trading on the Exchange (typically 4:00
p.m. Eastern time, but sometimes earlier, as in the
10
PROSPECTUS May 1, 2010 Investing in the Fund
case of scheduled half-day trading or unscheduled suspensions of trading). In
the event of scheduled partial day trading or unscheduled suspensions of
trading on the Exchange, the calculation of share price shall be as of the
close of trading on the Exchange. In such instances, the latest time for
receipt of wire purchase transactions entitled to receive same day dividend
treatment and for receipt of redemption orders for same day wire transfer of
proceeds will be the earlier of (a) 12:00 p.m. Eastern time or (b) the early
closing time of the Exchange. The fund seeks to maintain a stable $1.00 share
price.
The fund may, but is not required to, accept certain types of purchase and
redemption orders (not including exchanges) on days that the Exchange is
closed, or beyond an Exchange early closing time (referred to as a "Limited
Trading Period") if: (a) the Federal Reserve system is open, (b) the primary
trading markets for the fund's portfolio instruments are open and (c) the
Advisor believes there will be adequate liquidity in the short-term markets.
During any such Limited Trading Period, the fund will only accept purchase
orders by wire with advance telephone notification and telephone redemption
orders with proceeds to be sent by wire, ACH or check and will not accept
orders by any other means. (Automated Telephone Line orders are not permitted.)
If redemption proceeds are requested by ACH or check, the transmission of the
ACH payment or the mailing of the check, as the case may be, will be delayed by
at least one business day in comparison to normal trading periods. Orders
submitted by other means will be processed on the next day that the Exchange is
open. The calculation of share price will be as set forth in the prospectus for
normal trading days. Orders must be submitted by the cut-off times for receipt
of wire purchases entitled to that day's dividend and for receipt of telephone
redemption orders for same day wire transfer, which will be the earlier of: (a)
the times set forth in the prospectus for normal trading days or (b) such
earlier times that the fund determines based on the criteria described above.
If redemption proceeds are requested by ACH or check, orders must be received
prior to the calculation of share price. Please call (877) 237-1131 or visit
our Web site at www.moneyfunds.deam-us.db.com for additional information about
whether the fund will be open for business on a particular day. Information
concerning the intention of the fund to be open for a Limited Trading Period
will be available at least one business day prior to the applicable day that
the Exchange is closed or is closing early in the case of scheduled closings
and as soon as practical in the case of unscheduled closings.
OTHER RIGHTS WE RESERVE
You should be aware that we may do any of the following:
o withdraw or suspend the offering of shares at any time
o withhold a portion of your distributions and redemption proceeds if we have
been notified by the IRS that you are subject to backup withholding or if
you fail to provide us with the correct taxpayer ID number and certain
certifications, including certification that you are not subject to backup
withholding
o reject a new account application if you don't provide any required or
requested identifying information, or for any other reason
o refuse, cancel, limit or rescind any purchase or exchange order, without
prior notice; freeze any account (meaning you will not be able to purchase
fund shares in your account); suspend account services; and/or
involuntarily redeem your account if we think that the account is being
used for fraudulent or illegal purposes; one or more of these actions will
be taken when, at our sole discretion, they are deemed to be in the fund's
best interests or when the fund is requested or compelled to do so by
governmental authority or by applicable law
o close and liquidate your account if we are unable to verify your identity,
or for other reasons; if we decide to close your account, your fund shares
will be redeemed at the net asset value per share next calculated after we
determine to close your account (less applicable redemption fee, if any);
you may recognize a gain or loss on the redemption of your fund shares and
you may incur a tax liability
o pay you for shares you sell by "redeeming in kind," that is, by giving you
securities (which typically will involve brokerage costs for you to
liquidate) rather than cash; the fund generally won't make a redemption in
kind unless your requests over a 90-day period total more than $250,000 or
1% of the value of the fund's net assets, whichever is less
o change, add or withdraw various services, fees and account policies (for
example, we may adjust the fund's investment minimums at any time)
UNDERSTANDING DISTRIBUTIONS AND TAXES
The fund intends to distribute to its shareholders virtually all of its net
earnings. The fund can earn money in two ways: by receiving interest, dividends
or other income from securities it holds and by selling securities for more
than it paid for them. (The fund's earnings are separate from any gains or
losses stemming from your own purchase and sale of shares.) The fund may not
always pay a dividend or distribution for a given period.
THE FUND'S INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY TO
SHAREHOLDERS. The fund may take into account capital gains and losses in its
daily dividend declarations. The fund may make additional distributions for tax
purposes if necessary.
Dividends or distributions declared and payable to shareholders of record in
the last quarter of a given calendar year are treated for federal income tax
purposes as if they
11
PROSPECTUS May 1, 2010 Investing in the Fund
were received on December 31 of that year, if such dividends or distributions
are actually paid in January of the following year.
The fund intends to distribute tax-exempt interest earned from securities as
exempt-interest dividends, which are excluded from gross income for regular
federal income tax purposes, but may be subject to alternative minimum tax
(AMT) and state and local income taxes. Exempt-interest dividends may be
properly designated as such only if, as anticipated, at least 50% of the value
of the assets of the fund is invested at the close of each quarter of its
taxable year in obligations of issuers the interest on which is excluded from
gross income for federal income tax purposes.
A portion of the fund's dividends may be taxable if they consist of earnings
from investment in taxable securities. Capital gains distributions may also be
taxable.
YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You can have
them all automatically reinvested in fund shares (at NAV), all sent to you by
check or wire, have one type reinvested and the other sent to you by check or
have them invested in another fund. Tell us your preference on your
application. If you don't indicate a preference, your dividends and
distributions will all be reinvested.
Distributions are treated the same for federal income tax purposes whether you
receive them in cash or reinvest them in additional shares. For federal income
tax purposes, an exchange is treated the same as a sale.
Because the fund seeks to maintain a stable share price, you are unlikely to
have capital gains or losses when you sell fund shares.
YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION EVERY JANUARY.
These statements tell you the amount and the federal income tax classification
of any dividends or distributions you received.
If the fund's distributions exceed its current and accumulated earnings and
profits, the excess will be treated for federal income tax purposes as a return
of capital to the extent of your basis in your shares and thereafter as a
capital gain. A return of capital distribution reduces the basis of your
shares. As a result, even though the fund seeks to maintain a stable share
price, you may recognize a capital gain when you sell your shares if you have
received a return of capital distribution.
The above discussion summarizes certain federal income tax consequences for
shareholders who are US persons. If you are a non-US person, please consult
your own tax advisor with respect to the US tax consequences to you of an
investment in the fund. For more information, see "Taxes" in the Statement of
Additional Information.
12
PROSPECTUS May 1, 2010 Investing in the Fund
FINANCIAL HIGHLIGHTS
The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).
TAX FREE MONEY FUND INVESTMENT - INSTITUTIONAL SHARES
YEARS ENDED DECEMBER 31, 2009 2008(A)
--------------------------------------------------- --------------- ----------
SELECTED PER SHARE DATA
--------------------------------------------------- -
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
--------------------------------------------------- ------- ------
Income from investment operations:
Net investment income .002 .001
--------------------------------------------------- -------- -------
Net realized gain (loss)(b) - -
--------------------------------------------------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS .002 .001
--------------------------------------------------- -------- -------
Less distributions from:
Net investment income ( .002) ( .001)
--------------------------------------------------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
--------------------------------------------------- -------- -------
Total Return (%) .24 (c) .06**
--------------------------------------------------- -------- -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------- --------
Net assets, end of period ($ millions) .005 .005
---------------------------------------------------- -------- -------
Ratio of expenses before expense reductions (%) 1.69 .93*
---------------------------------------------------- -------- -------
Ratio of expenses after expense reductions (%) .57 .93*
---------------------------------------------------- -------- -------
Ratio of net investment income (%) .21 .42*
---------------------------------------------------- -------- -------
(a) For the period from November 11, 2008 (commencement of operations of
Institutional Shares) to December 31, 2008.
(b) Amount is less than $.0005 per share.
(c) Total return would have been lower had certain expenses not been
reduced.
* Annualized
** Not annualized
13
PROSPECTUS May 1, 2010 Financial Highlights
APPENDIX
HYPOTHETICAL EXPENSE SUMMARY
Using the annual fund operating expense ratios presented in the fee tables in
the fund prospectus, the Hypothetical Expense Summary shows the estimated fees
and expenses, in actual dollars, that would be charged on a hypothetical
investment of $10,000 in the fund held for the next 10 years and the impact of
such fees and expenses on fund returns for each year and cumulatively, assuming
a 5% return for each year. The historical rate of return for the fund may be
higher or lower than 5% and, for money market funds, is typically less than 5%.
The tables also assume that all dividends and distributions are reinvested and
that, where applicable, Class B shares convert to Class A shares after six
years. The annual fund expense ratios shown are net of any contractual fee
waivers or expense reimbursements, if any, for the period of the contractual
commitment. The tables reflect the maximum initial sales charge, if any, but do
not reflect any contingent deferred sales charge or redemption fees, if any,
which may be payable upon redemption. If contingent deferred sales charges or
redemption fees were shown, the "Hypothetical Year-End Balance After Fees and
Expenses" amounts shown would be lower and the "Annual Fees and Expenses"
amounts shown would be higher. Also, please note that if you are investing
through a third party provider, that provider may have fees and expenses
separate from those of the fund that are not reflected here. Mutual fund fees
and expenses fluctuate over time and actual expenses may be higher or lower
than those shown.
The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the fund's prospectus to
consider the investment objectives, risks, expenses and charges of the fund
prior to investing.
TAX FREE MONEY FUND INVESTMENT - INSTITUTIONAL SHARES
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 0.30% 4.70% $ 10,470.00 $ 30.71
--- ----- ---- ----- ----------- ----------
2 10.25% 1.69% 8.17% $ 10,816.56 $ 179.87
--- ----- ---- ----- ----------- ----------
3 15.76% 1.69% 11.75% $ 11,174.59 $ 185.83
--- ----- ---- ----- ----------- ----------
4 21.55% 1.69% 15.44% $ 11,544.46 $ 191.98
--- ----- ---- ----- ----------- ----------
5 27.63% 1.69% 19.27% $ 11,926.59 $ 198.33
--- ----- ---- ----- ----------- ----------
6 34.01% 1.69% 23.21% $ 12,321.36 $ 204.90
--- ----- ---- ----- ----------- ----------
7 40.71% 1.69% 27.29% $ 12,729.19 $ 211.68
--- ----- ---- ----- ----------- ----------
8 47.75% 1.69% 31.51% $ 13,150.53 $ 218.68
--- ----- ---- ----- ----------- ----------
9 55.13% 1.69% 35.86% $ 13,585.81 $ 225.92
--- ----- ---- ----- ----------- ----------
10 62.89% 1.69% 40.36% $ 14,035.50 $ 233.40
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,881.30
--- ----------
14
PROSPECTUS May 1, 2010 Appendix
TO GET MORE INFORMATION
SHAREHOLDER REPORTS. These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.
STATEMENT OF ADDITIONAL INFORMATION (SAI). This tells you more about the fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
For a free copy of any of these documents or to request other information about
the fund, contact Deutsche Asset Management at the phone number or address
listed below. SAIs and shareholder reports are also available through the DWS
Investments Web site at www.dws-investments.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below.
You can also review and copy these documents and other information about the
fund, including the fund's SAI, 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 or (202) 551-8090.
In order to reduce the amount of mail you receive and to help reduce expenses,
we generally send a single copy of any shareholder report and prospectus to
each household. If you do not want the mailing of these documents to be
combined with those for other members of your household, please contact your
financial advisor or call the number provided.
CONTACT INFORMATION
DEUTSCHE ASSET MANAGE- PO Box 219356
MENT Kansas City, MO 64121-9356
www.dws-investments.com
(800) 730-1313
SEC 100 F Street, N.E.
Washington, D.C. 20549-1520
WWW.SEC.GOV
(800) SEC-0330
DISTRIBUTOR DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
SEC FILE NUMBER DWS Advisor Funds
Tax Free Money Fund Investment
811-04760
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
(05/01/10) TFMF-1-IN
[GRAPHIC APPEARS HERE]
PROSPECTUS
MAY 1, 2010
Tax Free Money Fund Investment
CLASS/TICKER PREMIER SHARES BTXXX
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
[GRAPHIC APPEARS HERE]
TABLE OF CONTENTS
TAX FREE MONEY FUND INVESTMENT
Investment Objective........................... 1
Fees and Expenses of the Fund.................. 1
Principal Investment Strategy.................. 1
Main Risks..................................... 2
Past Performance............................... 3
Management..................................... 3
Purchase and Sale of Fund Shares............... 3
Tax Information................................ 3
Payments to Broker-Dealers and
Other Financial Intermediaries................. 3
FUND DETAILS
Other Policies................................. 4
Who Manages and Oversees the Fund.............. 4
Management..................................... 5
INVESTING IN THE FUND
Buying and Selling Shares...................... 6
How to Buy and Sell Shares..................... 6
Financial Intermediary Support Payments........ 7
Policies You Should Know About................. 8
Policies About Transactions.................... 8
How the Fund Calculates Share Price............ 10
Other Rights We Reserve........................ 11
Understanding Distributions and Taxes.......... 11
FINANCIAL HIGHLIGHTS........................... 13
APPENDIX....................................... 14
Hypothetical Expense Summary................... 14
-------------------------------------------------------------------------------
YOUR INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY, ENTITY OR PERSON.
-------------------------------------------------------------------------------
[Deutsche Asset Management LOGO]
A Member of the Deutsche Bank Group
TAX FREE MONEY FUND INVESTMENT
INVESTMENT OBJECTIVE
The fund seeks a high level of current income exempt from federal income taxes
consistent with liquidity and the preservation of capital by investing in high
quality, short-term, tax-exempt money market instruments.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares.
SHAREHOLDER FEES
(paid directly from your investment) None
-------------------------------------- -----
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a % of the value of your investment)
Management fee 0.15
--------------------------------------------------- ----
Distribution/service
(12b-1) fees None
--------------------------------------------------- -----
Other expenses (includes an administrative fee)(1) 0.64
--------------------------------------------------- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 0.79
--------------------------------------------------- -----
(1) Restated on an annualized basis to exclude the fees paid in connection
with the fund's participation in the U.S. Treasury Department's Temporary
Guarantee Program, which expired on September 18, 2009. If those fees had
been included, the fund's "Other expenses" and "Total annual fund
operating expenses" would have been higher.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ---------
$81 $252 $439 $978
--- ---- ---- ----
PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal conditions, the fund invests at least 80% of its
assets in investments the income from which is excluded from federal income
taxes. Normally, the fund will not invest in municipal obligations that pay
interest that is subject to the federal alternative minimum tax.
The fund is managed in accordance with Rule 2a-7 under the Investment Company
Act of 1940, as amended. Fund securities are denominated in US dollars and have
remaining maturities of 397 days (about 13 months) or less at the time of
purchase. The fund may also invest in securities that have features that have
the effect of reducing their maturities to 397 days or less at the time of
purchase. The fund maintains a dollar-weighted average maturity of 90 days or
less.
Although the fund seeks to maintain a stable $1.00 share price, you could lose
money by investing in the fund. All money market instruments can change in
value when interest rates or an issuer's creditworthiness change.
The fund primarily invests in the following types of investments:
o Municipal trust receipts ("MTRs"), also called municipal asset-backed
securities, synthetic short-term derivatives, floating rate trust
certificates, or municipal securities trust receipts. MTRs are trusts that
hold municipal securities and that offer purchasers (such as the fund) a
conditional right to sell their interest in the underlying securities to a
financial institution at par value plus accrued interest. The fund may
invest up to 50% of its net assets in MTRs, as well as an additional 10% of
net assets on a temporary basis to manage inflows into the fund.
o General obligation notes and bonds, which an issuer backs with its full
faith and credit (taxing power).
o Revenue notes and bonds, which are payable from specific revenue sources.
These are often tied to the public works projects the bonds are financing,
but are not generally backed by the issuer's taxing power.
o Tax-exempt commercial paper, which is tax-exempt debt of borrowers that
typically matures in 270 days or less.
1
PROSPECTUS May 1, 2010 Tax Free Money Fund Investment
o Short-term municipal notes, such as tax anticipation notes, that are issued
in anticipation of the receipt of tax revenues.
o Municipal obligations backed by letters of credit (a document issued by a
bank guaranteeing the issuer's payments for a stated amount), general bank
guarantees or municipal bond insurance.
o Floating rate bonds, whose interest rates vary with changes in specified
market rates or indices. The fund may invest in high quality floating rate
bonds with maturities of one year or more if it has the right to sell them
back at their face value prior to maturity. The fund may also invest in
bonds that have features that reduce their maturities on their purchase
date.
o Tax-exempt private activity bonds, which are revenue bonds that finance
non-governmental activities, such as private industry construction and
which meet certain tax law requirements.
MANAGEMENT PROCESS. The fund buys short-term municipal obligations that at the
time of purchase:
o have received one of the two highest short-term ratings from two nationally
recognized statistical rating organizations (NRSROs) or one NRSRO if that
NRSRO is the only NRSRO that rates such obligations;
o are unrated, but are deemed by the Advisor to be of comparable quality to
one of the two highest short-term ratings; or
o have no short-term rating, but are rated in one of the top three highest
long-term rating categories by a NRSRO or are deemed by the Advisor to be
of comparable quality.
Working in consultation with portfolio management, a credit team screens
potential securities and develops a list of those that the fund may buy.
Portfolio management, looking for attractive yield and weighing considerations
such as credit quality, economic outlooks and possible interest rate movements,
then decides which securities on this list to buy. Portfolio management may
adjust the fund's exposure to interest rate risk, typically seeking to take
advantage of possible rises in interest rates and to preserve yield when
interest rates appear likely to fall.
MAIN RISKS
There are several risk factors that could reduce the yield you get from the
fund, cause the fund's performance to trail that of other investments, or cause
you to lose money.
MONEY MARKET FUND RISK. An investment in the fund is not insured or guaranteed
by the FDIC or any other government agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, this share price isn't
guaranteed, and if it falls below $1.00 you would lose money. The Advisor is
not obligated to take any action to maintain the $1.00 share price. The share
price could fall below $1.00 as a result of the actions of one or more large
investors in the fund. The credit quality of the fund's holdings can change
rapidly in certain markets, and the default of a single holding could cause the
fund's share price to fall below $1.00, as could periods of high redemption
pressures and/or illiquid markets. The actions of a few large investors in one
class of shares of the fund may have a significant adverse effect on the share
prices of all classes of shares of the fund.
INTEREST RATE RISK. Rising interest rates could cause the value of the fund's
investments - and therefore its share price as well - to decline. Conversely,
any decline in interest rates is likely to cause the fund's yield to decline,
and during periods of unusually low interest rates, the fund's yield may
approach zero. Over time, the total return of a money market fund may not keep
pace with inflation, which would result in a net loss of purchasing power for
long-term investors.
CREDIT RISK. The fund's performance could be hurt if a money market instrument
declines in credit quality or goes into default, or if an issuer does not make
timely payments of interest or principal. For money market instruments that
rely on third-party guarantors to support their credit quality, the same risks
may apply if the financial condition of the guarantor deteriorates or the
guarantor ceases insuring money market instruments. Because guarantors may
insure many types of debt obligations, including subprime mortgage bonds and
other high-risk bonds, their financial condition could deteriorate as a result
of events that have little or no connection to securities owned by the fund.
Some securities issued by US government agencies or instrumentalities are
backed by the full faith and credit of the US government. Others are supported
only by the credit of that agency or instrumentality. For this latter group, if
there is a potential or actual loss of principal and interest of these
securities, the US government might provide financial support, but has no
obligation to do so.
SECURITY SELECTION RISK. Although short-term securities are relatively stable
investments, it is possible that the securities in which the fund invests will
not perform as expected. This could cause the fund's returns to lag behind
those of similar money market mutual funds and could result in a decline in
share price.
MUNICIPAL TRUST RECEIPTS RISK. The fund's investment in MTRs is subject to
similar risks as other investments in debt obligations, including interest rate
risk, credit risk and security selection risk. Additionally, investments in
MTRs raise certain tax issues that may not be presented by direct investments
in municipal bonds. There is some risk that certain issues could be resolved in
a manner that could adversely impact the performance of the fund.
TAX RISK. Any distributions to shareholders that represent income from taxable
securities will generally be taxable as ordinary income at both the state and
federal levels, while other distributions, such as capital gains, are taxable
to the same extent they would be for any mutual fund. New federal or state
governmental action could adversely affect
2
PROSPECTUS May 1, 2010 Tax Free Money Fund Investment
the tax-exempt status of securities held by the fund, resulting in higher tax
liability for shareholders and potentially hurting fund performance as well.
COUNTERPARTY RISK. A financial institution or other counterparty with whom the
fund does business (such as trading or securities lending), or that
underwrites, distributes or guarantees any investments or contracts that the
fund owns or is otherwise exposed to, may decline in financial health and
become unable to honor its commitments. This could cause losses for the fund or
could delay the return or delivery of collateral or other assets to the fund.
PREPAYMENT AND EXTENSION RISK. When interest rates fall, issuers of high
interest debt obligations may pay off the debts earlier than expected
(prepayment risk), and the fund may have to reinvest the proceeds at lower
yields. When interest rates rise, issuers of lower interest debt obligations
may pay off the debts later than expected (extension risk), thus keeping the
fund's assets tied up in lower interest debt obligations. Prepayments could
also create capital gains tax liability in some instances. Any unexpected
behavior in interest rates could increase the volatility of the fund's yield
and could hurt fund performance.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk. Past
performance may not indicate future results. All performance figures below
assume that dividends were reinvested. The 7-DAY YIELD, which is often referred
to as the "current yield," is the income generated by the fund over a seven-day
period. This amount is then annualized, which means that we assume the fund
generates the same income every week for a year. For more recent performance
figures and the current yield, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
CALENDAR YEAR TOTAL RETURNS (%) (Premier Shares)
Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
3.35 2.08 0.72 0.33 0.49 1.72 2.71 2.96 1.62 0.15
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Best Quarter: 0.88%, Q4 2000 Worst Quarter: 0.00%, Q3 2009
Year-to-Date as of 3/31/10: 0.00%
AVERAGE ANNUAL TOTAL RETURNS
(for periods ended 12/31/2009 expressed as a %)
1 5 10
YEAR YEARS YEARS
--------- --------- ---------
0.15 1.83 1.61
---- ---- ----
Total returns would have been lower if operating expenses hadn't been reduced.
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $2,000, and there is no minimum additional
investment. However, your financial advisor may set its own minimum investment.
TO PLACE ORDERS
MAIL First Investment Deutsche Asset Management c/o
DWS Investments, PO Box 219356
Kansas City, MO 64121-9356
Additional Investments Deutsche Asset Management c/o
DWS Investments, PO Box 219154
Kansas City, MO 64121-9154
Exchanges and Deutsche Asset Management c/o
Redemptions DWS Investments, PO Box 219557
Kansas City, MO 64121-9557
EXPEDITED MAIL Deutsche Asset Management c/o
DWS Investments, 210 West 10th Street
Kansas City, MO 64105-1614
TAX INFORMATION
The fund's distributions (distributions are declared daily and paid monthly)
are generally exempt from regular federal income tax. The fund may include
capital gains and losses in its monthly dividend. Net capital gains may also be
paid annually. A portion of the fund's dividends may be subject to federal
income tax, including the federal alternative minimum tax.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
3
PROSPECTUS May 1, 2010 Tax Free Money Fund Investment
FUND DETAILS
OTHER POLICIES
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other matters to know about:
o Although major changes tend to be infrequent, the fund's Board could change
the fund's investment objective without seeking shareholder approval.
However, the fund's policy of investing at least 80% of its assets in
investments the income from which is excluded from federal income taxes
cannot be changed without shareholder approval.
o For temporary defensive purposes or when acceptable short-term municipal
securities are not available, more than 20% of the fund's assets may be
held in cash or invested in short-term taxable instruments, including
obligations of the US Government, its agencies or instrumentalities, other
short-term high quality rated debt securities or, if unrated, determined to
be of comparable quality in the opinion of the Advisor, commercial paper,
bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances, and repurchase agreements. Short-term
investments may also include shares of money market mutual funds.
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to
request a copy of the Statement of Additional Information (the back cover tells
you how to do this).
Keep in mind that there is no assurance that the fund will achieve its
objective.
A complete list of the fund's portfolio holdings is posted twice each month on
www.dws-investments.com (the Web site does not form a part of this prospectus).
Portfolio holdings as of the 15th day of each month are posted to the Web site
on or after month-end and portfolio holdings as of each month-end are posted to
the Web site on or after the 14th day of the following month. More frequent
posting of portfolio holdings information may be made from time to time on
www.dws-investments.com. The posted portfolio holdings information is available
by fund and generally remains accessible at least until the date on which the
fund files its Form N-CSR or N-Q with the Securities and Exchange Commission
for the period that includes the date as of which the posted information is
current. The fund also may post on the Web site, on the same or a more frequent
basis, various depictions of portfolio characteristics such as the allocation
of the portfolio across various security types, market sectors and sub-sectors
and maturities and risk characteristics of the portfolio. The fund's Statement
of Additional Information includes a description of the fund's policies and
procedures with respect to the disclosure of the fund's portfolio holdings.
WHO MANAGES AND OVERSEES THE FUND
THE INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), with
headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor
for the fund. Under the oversight of the Board, the Advisor makes investment
decisions, buys and sells securities for the fund and conducts research that
leads to these purchase and sale decisions. The Advisor provides a full range
of global investment advisory services to institutional and retail clients.
DWS Investments is part of the Asset Management division of Deutsche Bank AG
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.
4
PROSPECTUS May 1, 2010 Fund Details
MANAGEMENT FEE. The Advisor receives a management fee from the fund. Below is
the actual rate paid by the fund for the most recent fiscal year, as a
percentage of the fund's average daily net assets.
FUND NAME FEE PAID
---------------------------- ---------
Tax Free Money Fund Invest-
ment 0.15%
---------------------------- ----
The Advisor has contractually agreed through April 30, 2011 to maintain the
fund's total annual operating expenses, excluding extraordinary expenses,
taxes, brokerage and interest expense at a ratio no higher than 0.80%. The
agreement may only be terminated with the consent of the fund's Board.
A discussion regarding the basis for the Board's approval of the fund's
investment management agreement is contained in the shareholder report for the
annual period ended December 31 (see "Shareholder reports" on the back cover).
Under a separate administrative services agreement between the fund and the
Advisor, the fund pays the Advisor a fee of 0.10% for providing most of the
fund's administrative services.
MULTI-MANAGER STRUCTURE. The Advisor, subject to the approval of the Board, has
ultimate responsibility to recommend the hiring, termination and replacement of
subadvisors. The fund and the Advisor have received an order from the SEC that
allows the fund and the Advisor to utilize a multi-manager structure in
managing the fund's assets. Pursuant to the SEC order, the Advisor, with the
approval of the fund's Board, is permitted to select subadvisors that are not
affiliates of the Advisor ("non-affiliated subadvisors") to manage all or a
portion of the fund's assets without obtaining shareholder approval. The
Advisor also has the discretion to terminate any subadvisor and allocate and
reallocate the fund's assets among any non-affiliated subadvisors. The SEC
order also permits the Advisor, subject to the approval of the Board, to
materially amend an existing subadvisory agreement with a non-affiliated
subadvisor without shareholder approval. The fund and the Advisor are subject
to the conditions imposed by the SEC order, including the condition that within
90 days of hiring of a new non-affiliated subadvisor, the fund will provide
shareholders with an information statement containing information about the new
non-affiliated subadvisor.
The fund and the Advisor have also filed an exemptive application with the SEC
requesting an order that would extend the relief granted with respect to
non-affiliated subadvisors to certain subadvisors that are affiliates of the
Advisor ("affiliated subadvisors"). If such relief is granted by the SEC, the
Advisor, with the approval of the fund's Board, would be able to hire
non-affiliated and/or affiliated subadvisors to manage all or a portion of the
fund's assets without obtaining shareholder approval. The Advisor would also
have the discretion to terminate any subadvisor and allocate and reallocate the
fund's assets among any other subadvisors (including terminating a
non-affiliated subadvisor and replacing them with an affiliated subadvisor).
The Advisor, subject to the approval of the Board, would also be able to
materially amend an existing subadvisory agreement with any such subadvisor
without shareholder approval. There can be no assurance that such relief will
be granted by the SEC. The fund and the Advisor will be subject to any new
conditions imposed by the SEC.
TRANSFER AGENT. DWS Investments Service Company ("DISC"), also an affiliate of
DIMA, serves as the fund's transfer agent. DISC, or your financial advisor,
performs the functions necessary to establish and maintain your account.
Besides setting up the account and processing your purchase and sale orders,
these functions include:
o keeping accurate, up-to-date records for your individual account;
o implementing any changes you wish to make in your account information;
o processing your requests for cash dividends and distributions from the fund;
and
o answering your questions on the fund's investment performance or
administration.
DISC delegates certain of these functions to a third party.
Financial advisors include brokers or any bank, dealer or any other financial
institutions that have sub-shareholder servicing agreements with DISC.
Financial advisors may charge additional fees to investors only for those
services not otherwise included in the DISC servicing agreement, such as cash
management or special trust or retirement investment reporting.
MANAGEMENT
A group of investment professionals is responsible for the day-to-day
management of the fund. These investment professionals have a broad range of
experience managing money market funds.
5
PROSPECTUS May 1, 2010 Fund Details
INVESTING IN THE FUND
BUYING AND SELLING SHARES
TO CONTACT DEUTSCHE ASSET MANAGEMENT
BY PHONE
CLASS NUMBER
--------- ---------------
PREMIER (800) 730-1313
--------- ---------------
BY MAIL
TYPE ADDRESS
----------------- ------------------------------------------------
EXPEDITED MAIL
All Requests Deutsche Asset Management
----------------- c/o DWS Investments
Attn: (see department names under Regular Mail)
210 West 10th Street
Kansas City, MO 64121-1614
------------------------------------------------
REGULAR MAIL
New Accounts Deutsche Asset Management
c/o DWS Investments
Attn: New Applications
P.O. Box 219356
Kansas City, MO 64121-9356
Additional Deutsche Asset Management
Investments c/o DWS Investments
Attn: Purchases
P.O. Box 219154
Kansas City, MO 64121-9154
Exchanges and Deutsche Asset Management
Redemptions c/o DWS Investments
Attn: Transaction Processing
P.O. Box 219557
Kansas City, MO 64121-9557
HOW TO BUY AND SELL SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $2,000, and there is no minimum additional
investment.
Shares of the fund may be offered to directors and trustees of any mutual fund
advised or administered by DIMA or its affiliates, employees of Deutsche Bank
AG, their spouses and minor children, or institutional clients and qualified
purchasers that are clients of a division of Deutsche Bank AG without regard to
the minimum investment required. The fund reserves the right to modify the
above eligibility requirements and investment minimum at any time.
HOW TO OPEN YOUR ACCOUNT
Mail: Complete and sign the account application
------------ that accompanies this prospectus. (You may
obtain additional applications by calling the
Service Center.) Mail the completed applica-
tion along with a check payable to the fund
you have selected to the Service Center. Be
sure to include the fund number. The appli-
cable addresses are shown above.
----------------------------------------------
Wire: Call the Service Center to set up a wire
------------ account.
----------------------------------------------
Fund Name: Please use the complete fund name.
------------ ----------------------------------------------
Please note that your account cannot become activated until we receive a
completed account application.
BUYING AND SELLING SHARES BY MAIL
BUYING: Send your check, payable to the fund you have selected, to the Service
Center. Be sure to include the fund number and your account number on your
check. If you are investing in more than one fund, make your check payable to
"Deutsche Asset Management" and include your account number, the names and
numbers of the fund you have selected, and the dollar amount or percentage you
would like invested in each fund. Mailing addresses are shown above.
SELLING: Send a signed letter to the Service Center with your name, your fund
number and account number, the fund's name, and either the number of shares you
wish to sell or the dollar amount you wish to receive. In certain
circumstances, a signature guarantee may be required to sell shares of the fund
by mail. For information about a signature guarantee, see "Signature
Guarantee." Unless exchanging into another Deutsche Asset Management fund or
DWS fund, you must submit a written authorization to sell shares in a
retirement account.
For more information on how to buy or sell shares by mail, refer to "Policies
about transactions - Transaction Processing."
6
PROSPECTUS May 1, 2010 Investing in the Fund
BUYING AND SELLING SHARES BY WIRE
BUYING: You may buy shares by wire only if your account is authorized to do so.
Instruct your bank to send payment by wire using the wire instructions below.
Bank Name: State Street Bank Boston
------------- --------------------------------------------
Routing No: 011000028
------------- ---------
Attn: DWS Investments
------------- --------------------------------------------
DDA No: 99028102
------------- ---------
FBO: (Account name) (Account number)
------------- -------------------------------------------
Credit: (Fund name, Fund number and, if applicable,
-------------
class name) (Refer to the start of "The
Fund's Main Investment Strategy" above for
the fund number.)
--------------------------------------------
Refer to your account statement for the account name and number. Wire transfers
normally take two or more hours to complete. Wire transfers may be restricted
on bank holidays and at certain other times.
SELLING: You may sell shares by wire only if your account is authorized to do
so. You will be paid for redeemed shares by wire transfer of funds to your
financial advisor or bank upon receipt of a duly authorized redemption request
as promptly as feasible. For your protection, you may not change the
destination bank account over the phone.
For more information on how to buy or sell shares by wire, refer to "Policies
about transactions - Transaction Processing."
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to the fund, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of fund shares or the retention and/or servicing of fund
investors and fund shares ("revenue sharing"). Such revenue sharing payments
are in addition to any distribution or service fees payable under any Rule
12b-1 or service plan of the fund, any record keeping/sub-transfer agency/
networking fees payable by the fund (generally through the Distributor or an
affiliate) and/or the Distributor to certain financial advisors for performing
such services and any sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table
or elsewhere in this prospectus or the Statement of Additional Information as
payable to all financial advisors. For example, the Advisor, the Distributor
and/or their affiliates may compensate financial advisors for providing the
fund with "shelf space" or access to a third party platform or fund offering
list or other marketing programs, including, without limitation, inclusion of
the fund on preferred or recommended sales lists, mutual fund "supermarket"
platforms and other formal sales programs; granting the Distributor access to
the financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and obtaining other forms of
marketing support.
The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of the fund attributable to the financial
advisor, the particular fund or fund type or other measures as agreed to by the
Advisor, the Distributor and/or their affiliates and the financial advisors or
any combination thereof. The amount of these revenue sharing payments is
determined at the discretion of the Advisor, the Distributor and/or their
affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
0.01% up to 0.26% of assets of the fund serviced and maintained by the
financial advisor, 0.05% to 0.25% of sales of the fund attributable to the
financial advisor, a flat fee of $4,000 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of the fund or of any particular share class of the fund. You
should review your financial advisor's compensation disclosure and/or talk to
your financial advisor to obtain more information on how this compensation may
have influenced your financial advisor's recommendation of the fund. Additional
information regarding these revenue sharing payments is included in the fund's
Statement of Additional Information, which is available to you on request at no
charge (see the back cover of this prospectus for more information on how to
request a copy of the Statement of Additional Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. or ExpertPlan Inc. on the DWS Investments branded retirement plan
platform (the "Platform") with the level of revenue sharing payments being
based upon sales of both the DWS funds and the non-DWS funds by the financial
advisor on the Platform or
7
PROSPECTUS May 1, 2010 Investing in the Fund
current assets of both the DWS funds and the non-DWS funds serviced and
maintained by the financial advisor on the Platform.
It is likely that broker-dealers that execute portfolio transactions for the
fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.
POLICIES YOU SHOULD KNOW ABOUT
Along with the information on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on
distributions and taxes, applies to all investors, including those investing
through a financial advisor.
If you are investing through a financial advisor or through a retirement plan,
check the materials you received from them about how to buy and sell shares
because particular financial advisors or other intermediaries may adopt
policies, procedures or limitations that are separate from those described in
this prospectus. Please note that a financial advisor may charge fees separate
from those charged by the fund and may be compensated by the fund.
Keep in mind that the information in this prospectus applies only to the shares
offered herein. Other share classes are described in a separate prospectus and
have different fees, requirements and services.
POLICIES ABOUT TRANSACTIONS
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, we will ask for your name, address, date of birth and
other information that will allow us to identify you. Some or all of this
information will be used to verify the identity of all persons opening an
account.
We might request additional information about you (which may include certain
documents, such as articles of incorporation for companies) to help us verify
your identity and, in some cases, more information and/or documents may be
required to conduct the verification. The information and documents will be
used solely to verify your identity.
We will attempt to collect any missing required and requested information by
contacting you or your financial advisor. If we are unable to obtain this
information within the time frames established by the fund, then we may reject
your application and order.
The fund will not invest your purchase until all required and requested
identification information has been provided and your application has been
submitted in "good order." After we receive all the information, your
application is deemed to be in good order and we accept your purchase, you will
receive the net asset value per share next calculated.
If we are unable to verify your identity within time frames established by the
fund, after a reasonable effort to do so, you will receive written
notification.
With certain limited exceptions, only US residents may invest in the fund.
Because orders placed through a financial advisor must be forwarded to the
transfer agent before they can be processed, you'll need to allow extra time.
Your financial advisor should be able to tell you approximately when your order
will be processed. It is the responsibility of your financial advisor to
forward your order to the transfer agent in a timely manner.
TELEPHONE TRANSACTIONS. You are automatically entitled to telephone transaction
privileges but you may elect not to have them when you open your account or by
contacting Service Center at (800) 730-1313 at a later date.
TRANSACTION PROCESSING. Orders for the purchase of shares by wire transfer will
normally be effective at the share price next computed after receipt of the
wire transfer of the amount to be invested. If a wire transfer purchase order
is received in good order before 12:00 p.m. Eastern time, it will normally
receive the dividend for that day.
Shareholders known to the fund may notify the Service Center in advance of
their wire transfer purchase by calling the Service Center prior to the 12:00
p.m. Eastern time cut-off time and providing the amount of the order. The
investor will receive a confirmation number for the trade. If the fund receives
the wire transfer before the close of the Federal Funds wire system, the trade
will be entitled to that day's dividend. If the fund does not receive the wire
transfer by the close of the Federal Funds wire system, the trade may not
receive the dividend for that day and, depending upon the circumstances, the
trade may receive the dividend for the following business day or may be
canceled or rejected and, in any case, the investor may be charged for any
losses or fees that result, which may be paid by deductions from their account
or otherwise. The fund's Distributor may refuse to allow any investor to trade
with the fund in this manner and may require that the wire transfer of purchase
proceeds be received before the trade is considered in good order.
8
PROSPECTUS May 1, 2010 Investing in the Fund
Investments by check will be effective on the business day following receipt
and will earn dividends the following business day. If you pay for shares by
check and the check fails to clear, we have the right to cancel your order,
hold you liable or charge you or your account for any losses or fees the fund
or its agents have incurred.
Orders processed through dealers or other financial services firms via
Fund/SERV will be effected at the share price calculated on the trade day
(normally the date the order is received). Purchases processed via Fund/SERV
will begin earning dividends on the day the fund receives the payment
(typically the next business day). For redemptions processed via Fund/SERV, you
generally will receive dividends accrued up to, but not including, the business
day that payment for your shares is made.
When selling shares, shareholders generally receive dividends up to, but not
including, the business day following the day on which the shares were sold. To
sell shares, you must state whether you would like to receive the proceeds by
wire or check.
In order to receive proceeds by wire, contact the Service Center before 12:00
p.m. Eastern time. After you inform the Service Center of the amount of your
redemption, you will receive a trade confirmation number. If the fund receives
a sell request before 12:00 p.m. Eastern time and the request calls for
proceeds to be sent out by wire, the proceeds will normally be wired on the
same day. However, the shares sold will not earn that day's dividend.
As noted below, proceeds of a redemption may be delayed. The ability to receive
"same day" wire redemption proceeds can be affected by a variety of
circumstances including the time that the request is made, the level of
redemption requests and purchase orders and general market conditions. A
request for a same day wire that is received earlier in the day will be given
priority over a request received later in the day in the event that it is
necessary to limit the amount of same day wire redemptions.
SUB-MINIMUM BALANCES. The fund may close your account and send you the proceeds
if your balance falls below $500; we will give you 60 days' notice so you can
either increase your balance or close your account (these policies don't apply
to investor with $100,000 or more in DWS fund shares).
CHECKWRITING enables you to sell shares of the fund by writing a check. Your
investment keeps earning dividends until your check clears. Please note that we
will not accept checks for less than $500. Note as well that we can't honor any
check larger than your balance at the time the check is presented to us. It is
not a good idea to close out an account using a check because the account
balance could change between the time you write the check and the time it is
processed. Please keep in mind that if you make a purchase by check and that
check has not yet cleared, those funds will not be available for immediate
redemption.
REGULAR INVESTMENTS AND WITHDRAWALS enable you to set up a link between the
fund account and a bank account. Once this link is in place, you can move money
between the two with a phone call. You'll need to make sure your bank has
Automated Clearing House (ACH) services. Transactions take two to three days to
be completed. The minimum transaction is $50, and the account must have a
balance of at least $10,000 to qualify for these withdrawals.
THE FUND ACCEPTS AUTOMATED CLEARING HOUSE ("ACH") debit entries for accounts
that have elected the checkwriting redemption privilege. Upon receipt of an ACH
debit entry referencing your account number you authorize us to redeem shares
in your account to pay the entry to the third party originating the debit. Your
fund account statement will show all ACH debit entries in your account. IN CASE
OF ERRORS OR QUESTIONS ABOUT YOUR TRANSACTIONS OR PRE-AUTHORIZED TRANSFERS
please contact your financial advisor as soon as possible if you believe your
statement reflects an improper charge or if you need more information about an
ACH debit entry transaction. Your financial advisor must contact the
Shareholder Service Agent within sixty (60) days of the fund sending you the
first fund account statement on which an improper charge appears.
THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you currently have
shares in certificated form, you must include the share certificates properly
endorsed or accompanied by a duly executed stock power when exchanging or
redeeming shares. You may not exchange or redeem shares in certificate form by
telephone or via the Internet.
WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we don't
charge a fee to send or receive wires, it's possible that your bank may do so.
Wire transactions are generally completed within 24 hours. The fund can only
send wires of $1,000 or more and accept wires of $50 or more.
THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check drawn on a US
bank, a bank or Federal Funds wire transfer or an electronic bank transfer. The
fund does not accept third party checks. A third party check is a check made
payable to one or more parties and offered as payment to one or more other
parties (e.g., a check made payable to you that you offer as payment to someone
else). Checks should normally be payable to the fund or "Deutsche Asset
Management" and drawn by you or a financial institution on your behalf with
your name or account number included with the check. If you pay for shares by
check and the check fails to clear, we have the right to cancel your order,
hold you liable or charge you or your account for any losses or fees the fund
or its agents have incurred.
9
PROSPECTUS May 1, 2010 Investing in the Fund
SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth of shares
or send proceeds to a third party or to a new address, you'll usually need to
place your order in writing and include a signature guarantee. However, if you
want money transferred electronically to a bank account that is already on file
with us, you don't need a signature guarantee. Also, generally you don't need a
signature guarantee for an exchange, although we may require one in certain
other circumstances.
A signature guarantee is simply a certification of your signature - a valuable
safeguard against fraud. You can get a signature guarantee from an eligible
guarantor institution, including commercial banks, savings and loans, trust
companies, credit unions, member firms of a national stock exchange or any
member or participant of an approved signature guarantor program. We require
stamps from members of a medallion signature guarantee program. A notarized
document cannot be accepted in lieu of a signature guarantee.
SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION ACCOUNTS may
require additional documentation. Please call DWS Investments (see phone
numbers on the back cover) or contact your financial advisor for more
information.
MONEY FROM SHARES YOU SELL is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are circumstances when it could be longer,
including, but not limited to, when you are selling shares you bought recently
by check or ACH (the funds will be placed under a 10 calendar day hold to
ensure good funds) or when unusual circumstances prompt the SEC to allow
further delays. Certain expedited redemption processes (e.g., redemption
proceeds by wire) may also be delayed or unavailable when you are selling
shares recently purchased or in the event of the closing of the Federal Reserve
wire payment system. The fund reserves the right to suspend or postpone
redemptions as permitted pursuant to Section 22(e) of the 1940 Act. Generally,
those circumstances are when 1) the New York Stock Exchange is closed other
than customary weekend or holiday closings; 2) the SEC determines that trading
on the New York Stock Exchange is restricted; 3) the SEC determines that an
emergency exists which makes the disposal of securities owned by the fund or
the fair determination of the value of the fund's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also be delayed in the event of a
non-routine closure of the Federal Reserve wire payment system. For additional
rights reserved by the fund, please see "Other rights we reserve."
EXCHANGE PRIVILEGE. You can exchange all or part of your shares for shares of
certain other Deutsche Asset Management or DWS funds. When you exchange shares,
you are selling shares in one fund to purchase shares in another. Exchanges are
a shareholder privilege, not a right: we may reject any exchange order. Before
buying shares through an exchange, you should be sure to obtain a copy of that
fund's prospectus and read it carefully. You will receive a written
confirmation of each transaction from the Service Center or your financial
advisor.
Please note the following conditions:
o The accounts between which the exchange is taking place must have the same
name, address and taxpayer ID number.
o You may make the exchange by phone (if your account has the exchange by
phone feature) or by letter.
o If you are maintaining a taxable account, you may have to pay taxes on the
exchange.
o Your exchange must meet the minimum investment requirement for the fund
being purchased.
o The accounts between which you exchange must be the same share class.
ACCOUNT STATEMENTS. We or your financial advisor will generally furnish you
with a written confirmation of every transaction that affects your account
balance. You will also receive periodic statements reflecting the balances in
your account.
SHORT-TERM TRADING. Since money market funds hold short-term instruments and
are intended to provide liquidity to shareholders, the Advisor does not monitor
or limit short-term or excessive trading activity in the fund and, accordingly,
the Board of the fund has not approved any policies and procedures designed to
limit this activity. However, the fund reserves the right to and may reject or
cancel a purchase or exchange order into the fund for any reason, including if,
in the opinion of the Advisor, there appears to be a pattern of short-term or
excessive trading by an investor in another Deutsche Asset Management fund or
DWS fund.
HOW THE FUND CALCULATES SHARE PRICE
To calculate net asset value, or NAV, each share class uses the following
equation:
TOTAL TOTAL TOTAL NUMBER OF
- / = NAV
( )
ASSETS LIABILITIES SHARES OUTSTANDING
The price at which you buy and sell shares is based on the NAV per share next
calculated after the order is received and accepted by the transfer agent.
IN VALUING SECURITIES, we typically use amortized cost (the method used by most
money market funds) to account for any premiums or discounts above or below the
face value of any securities the fund buys, and round the per share NAV to the
nearest whole cent.
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (the
"Exchange") is open. Normally, the fund calculates its share price once every
business day as of the close of regular trading on the Exchange (typically 4:00
p.m. Eastern time, but sometimes earlier, as in the
10
PROSPECTUS May 1, 2010 Investing in the Fund
case of scheduled half-day trading or unscheduled suspensions of trading). In
the event of scheduled partial day trading or unscheduled suspensions of
trading on the Exchange, the calculation of share price shall be as of the
close of trading on the Exchange. In such instances, the latest time for
receipt of wire purchase transactions entitled to receive same day dividend
treatment and for receipt of redemption orders for same day wire transfer of
proceeds will be the earlier of (a) 12:00 p.m. Eastern time or (b) the early
closing time of the Exchange. The fund seeks to maintain a stable $1.00 share
price.
The fund may, but is not required to, accept certain types of purchase and
redemption orders (not including exchanges) on days that the Exchange is
closed, or beyond an Exchange early closing time (referred to as a "Limited
Trading Period") if: (a) the Federal Reserve system is open, (b) the primary
trading markets for the fund's portfolio instruments are open and (c) the
Advisor believes there will be adequate liquidity in the short-term markets.
During any such Limited Trading Period, the fund will only accept purchase
orders by wire with advance telephone notification and telephone redemption
orders with proceeds to be sent by wire, ACH or check and will not accept
orders by any other means. (Automated Telephone Line orders are not permitted.)
If redemption proceeds are requested by ACH or check, the transmission of the
ACH payment or the mailing of the check, as the case may be, will be delayed by
at least one business day in comparison to normal trading periods. Orders
submitted by other means will be processed on the next day that the Exchange is
open. The calculation of share price will be as set forth in the prospectus for
normal trading days. Orders must be submitted by the cut-off times for receipt
of wire purchases entitled to that day's dividend and for receipt of telephone
redemption orders for same day wire transfer, which will be the earlier of: (a)
the times set forth in the prospectus for normal trading days or (b) such
earlier times that the fund determines based on the criteria described above.
If redemption proceeds are requested by ACH or check, orders must be received
prior to the calculation of share price. Please call (877) 237-1131 or visit
our Web site at www.dws-investments.com for additional information about
whether the fund will be open for business on a particular day. Information
concerning the intention of the fund to be open for a Limited Trading Period
will be available at least one business day prior to the applicable day that
the Exchange is closed or is closing early in the case of scheduled closings
and as soon as practical in the case of unscheduled closings.
OTHER RIGHTS WE RESERVE
You should be aware that we may do any of the following:
o withdraw or suspend the offering of shares at any time
o withhold a portion of your distributions and redemption proceeds if we have
been notified by the IRS that you are subject to backup withholding or if
you fail to provide us with the correct taxpayer ID number and certain
certifications, including certification that you are not subject to backup
withholding
o reject a new account application if you don't provide any required or
requested identifying information, or for any other reason
o refuse, cancel, limit or rescind any purchase or exchange order, without
prior notice; freeze any account (meaning you will not be able to purchase
fund shares in your account); suspend account services; and/or
involuntarily redeem your account if we think that the account is being
used for fraudulent or illegal purposes; one or more of these actions will
be taken when, at our sole discretion, they are deemed to be in the fund's
best interests or when the fund is requested or compelled to do so by
governmental authority or by applicable law
o close and liquidate your account if we are unable to verify your identity,
or for other reasons; if we decide to close your account, your fund shares
will be redeemed at the net asset value per share next calculated after we
determine to close your account (less applicable redemption fee, if any);
you may recognize a gain or loss on the redemption of your fund shares and
you may incur a tax liability
o pay you for shares you sell by "redeeming in kind," that is, by giving you
securities (which typically will involve brokerage costs for you to
liquidate) rather than cash; the fund generally won't make a redemption in
kind unless your requests over a 90-day period total more than $250,000 or
1% of the value of the fund's net assets, whichever is less
o change, add or withdraw various services, fees and account policies (for
example, we may adjust the fund's investment minimums at any time)
UNDERSTANDING DISTRIBUTIONS AND TAXES
The fund intends to distribute to its shareholders virtually all of its net
earnings. The fund can earn money in two ways: by receiving interest, dividends
or other income from securities it holds and by selling securities for more
than it paid for them. (The fund's earnings are separate from any gains or
losses stemming from your own purchase and sale of shares.) The fund may not
always pay a dividend or distribution for a given period.
THE FUND'S INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY TO
SHAREHOLDERS. The fund may take into account capital gains and losses in its
daily dividend declarations. The fund may make additional distributions for tax
purposes if necessary.
Dividends or distributions declared and payable to shareholders of record in
the last quarter of a given calendar year are treated for federal income tax
purposes as if they
11
PROSPECTUS May 1, 2010 Investing in the Fund
were received on December 31 of that year, if such dividends or distributions
are actually paid in January of the following year.
The fund intends to distribute tax-exempt interest earned from securities as
exempt-interest dividends, which are excluded from gross income for regular
federal income tax purposes, but may be subject to alternative minimum tax
(AMT) and state and local income taxes. Exempt-interest dividends may be
properly designated as such only if, as anticipated, at least 50% of the value
of the assets of the fund is invested at the close of each quarter of its
taxable year in obligations of issuers the interest on which is excluded from
gross income for federal income tax purposes.
A portion of the fund's dividends may be taxable if they consist of earnings
from investment in taxable securities. Capital gains distributions may also be
taxable.
YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You can have
them all automatically reinvested in fund shares (at NAV), all sent to you by
check or wire, have one type reinvested and the other sent to you by check or
have them invested in another fund. Tell us your preference on your
application. If you don't indicate a preference, your dividends and
distributions will all be reinvested.
Distributions are treated the same for federal income tax purposes whether you
receive them in cash or reinvest them in additional shares. For federal income
tax purposes, an exchange is treated the same as a sale.
Because the fund seeks to maintain a stable share price, you are unlikely to
have capital gains or losses when you sell fund shares.
YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION EVERY JANUARY.
These statements tell you the amount and the federal income tax classification
of any dividends or distributions you received.
If the fund's distributions exceed its current and accumulated earnings and
profits, the excess will be treated for federal income tax purposes as a return
of capital to the extent of your basis in your shares and thereafter as a
capital gain. A return of capital distribution reduces the basis of your
shares. As a result, even though the fund seeks to maintain a stable share
price, you may recognize a capital gain when you sell your shares if you have
received a return of capital distribution.
The above discussion summarizes certain federal income tax consequences for
shareholders who are US persons. If you are a non-US person, please consult
your own tax advisor with respect to the US tax consequences to you of an
investment in the fund. For more information, see "Taxes" in the Statement of
Additional Information.
12
PROSPECTUS May 1, 2010 Investing in the Fund
FINANCIAL HIGHLIGHTS
The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).
TAX FREE MONEY FUND INVESTMENT - PREMIER SHARES
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
--------------------------------------------------- ---------- ---------- ---------- ---------- ----------
SELECTED PER SHARE DATA
--------------------------------------------------- -
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income .001 .016 .029 .027 .017
--------------------------------------------------- -------- -------- -------- -------- --------
Net realized gain (loss)(a) - - - - -
--------------------------------------------------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS .001 .016 .029 .027 .017
--------------------------------------------------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income ( .001) ( .016) ( .029) ( .027) ( .017)
--------------------------------------------------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------- -------- -------- -------- -------- --------
Total Return (%)(b) .15 1.62 2.96 2.71 1.72
--------------------------------------------------- -------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------- --------
Net assets, end of period ($ millions) 173 136 116 110 174
---------------------------------------------------- -------- -------- -------- -------- --------
Ratio of expenses before expense reductions (%) .82 .81 .83 .88 .82
---------------------------------------------------- -------- -------- -------- -------- --------
Ratio of expenses after expense reductions (%) .64 .76 .75 .75 .75
---------------------------------------------------- -------- -------- -------- -------- --------
Ratio of net investment income (%) .14 1.64 2.92 2.61 1.73
---------------------------------------------------- -------- -------- -------- -------- --------
(a) Amount is less than $.0005 per share.
(b) Total return would have been lower had certain expenses not been
reduced.
13
PROSPECTUS May 1, 2010 Financial Highlights
APPENDIX
HYPOTHETICAL EXPENSE SUMMARY
Using the annual fund operating expense ratios presented in the fee tables in
the fund prospectus, the Hypothetical Expense Summary shows the estimated fees
and expenses, in actual dollars, that would be charged on a hypothetical
investment of $10,000 in the fund held for the next 10 years and the impact of
such fees and expenses on fund returns for each year and cumulatively, assuming
a 5% return for each year. The historical rate of return for the fund may be
higher or lower than 5% and, for money market funds, is typically less than 5%.
The tables also assume that all dividends and distributions are reinvested. The
annual fund expense ratios shown are net of any contractual fee waivers or
expense reimbursements, if any, for the period of the contractual commitment.
The tables reflect the maximum initial sales charge, if any, but do not reflect
any contingent deferred sales charge or redemption fees, if any, which may be
payable upon redemption. If contingent deferred sales charges or redemption
fees were shown, the "Hypothetical Year-End Balance After Fees and Expenses"
amounts shown would be lower and the "Annual Fees and Expenses" amounts shown
would be higher. Also, please note that if you are investing through a third
party provider, that provider may have fees and expenses separate from those of
the fund that are not reflected here. Mutual fund fees and expenses fluctuate
over time and actual expenses may be higher or lower than those shown.
The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the fund's prospectus to
consider the investment objectives, risks, expenses and charges of the fund
prior to investing.
TAX FREE MONEY FUND INVESTMENT - PREMIER SHARES
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 0.79% 4.21% $ 10,421.00 $ 80.66
--- ----- ---- ----- ----------- --------
2 10.25% 0.79% 8.60% $ 10,859.72 $ 84.06
--- ----- ---- ----- ----------- --------
3 15.76% 0.79% 13.17% $ 11,316.92 $ 87.60
--- ----- ---- ----- ----------- --------
4 21.55% 0.79% 17.93% $ 11,793.36 $ 91.29
--- ----- ---- ----- ----------- --------
5 27.63% 0.79% 22.90% $ 12,289.86 $ 95.13
--- ----- ---- ----- ----------- --------
6 34.01% 0.79% 28.07% $ 12,807.26 $ 99.13
--- ----- ---- ----- ----------- --------
7 40.71% 0.79% 33.46% $ 13,346.45 $ 103.31
--- ----- ---- ----- ----------- --------
8 47.75% 0.79% 39.08% $ 13,908.34 $ 107.66
--- ----- ---- ----- ----------- --------
9 55.13% 0.79% 44.94% $ 14,493.88 $ 112.19
--- ----- ---- ----- ----------- --------
10 62.89% 0.79% 51.04% $ 15,104.07 $ 116.91
--- ----- ---- ----- ----------- --------
TOTAL $ 977.94
--- --------
14
PROSPECTUS May 1, 2010 Appendix
TO GET MORE INFORMATION
SHAREHOLDER REPORTS. These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.
STATEMENT OF ADDITIONAL INFORMATION (SAI). This tells you more about the fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
For a free copy of any of these documents or to request other information about
the fund, contact Deutsche Asset Management at the phone number or address
listed below. SAIs and shareholder reports are also available through the DWS
Investments Web site at www.dws-investments.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below.
You can also review and copy these documents and other information about the
fund, including the fund's SAI, 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 or (202) 551-8090.
In order to reduce the amount of mail you receive and to help reduce expenses,
we generally send a single copy of any shareholder report and prospectus to
each household. If you do not want the mailing of these documents to be
combined with those for other members of your household, please contact your
financial advisor or call the number provided.
CONTACT INFORMATION
DEUTSCHE ASSET MANAGE- PO Box 219356
MENT Kansas City, MO 64121-9356
www.dws-investments.com
(800) 730-1313
SEC 100 F Street, N.E.
Washington, D.C. 20549-1520
WWW.SEC.GOV
(800) SEC-0330
DISTRIBUTOR DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
SEC FILE NUMBER DWS Advisor Funds
Tax Free Money Fund Investment
811-04760
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
(05/01/10) TFMF-1
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PROSPECTUS
MAY 1, 2010
NY Tax Free Money Fund
CLASS/TICKER INVESTMENT CLASS BNYXX
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
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TABLE OF CONTENTS
NY TAX FREE MONEY FUND
Investment Objective........................... 1
Fees and Expenses of the Fund.................. 1
Principal Investment Strategy.................. 1
Main Risks..................................... 2
Past Performance............................... 3
Management..................................... 4
Purchase and Sale of Fund Shares............... 4
Tax Information................................ 4
Payments to Broker-Dealers and
Other Financial Intermediaries................. 4
FUND DETAILS
Other Policies................................. 5
Who Manages and Oversees the Fund.............. 5
Management..................................... 6
INVESTING IN THE FUND
Buying and Selling Shares...................... 7
How to Buy and Sell Shares..................... 7
Financial Intermediary Support Payments........ 8
Policies You Should Know About................. 9
Policies About Transactions.................... 9
How the Fund Calculates Share Price............ 11
Other Rights We Reserve........................ 12
Understanding Distributions and Taxes.......... 12
FINANCIAL HIGHLIGHTS........................... 14
APPENDIX....................................... 15
Hypothetical Expense Summary................... 15
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YOUR INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY, ENTITY OR PERSON.
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[Deutsche Asset Management LOGO]
A Member of the Deutsche Bank Group
NY TAX FREE MONEY FUND
INVESTMENT OBJECTIVE
The fund seeks a high level of current income exempt from federal and New York
income taxes consistent with liquidity and the preservation of capital.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares.
SHAREHOLDER FEES
(paid directly from your investment) None
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ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a % of the value of your investment)
Management fee 0.12
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Distribution/service (12b-1) fees None
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Other expenses (includes an administrative fee)(1) 0.69
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TOTAL ANNUAL FUND OPERATING EXPENSES 0.81
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Less fee waiver/reimbursement 0.01
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NET ANNUAL FUND OPERATING EXPENSES 0.80
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(1) Restated on an annualized basis to exclude the fees paid in connection
with the fund's participation in the U.S. Treasury Department's Temporary
Guarantee Program, which expired on September 18, 2009. If those fees had
been included, the fund's "Other expenses" and "Total annual fund
operating expenses" would have been higher.
The Advisor has contractually agreed through April 30, 2011 to maintain the
fund's total annual operating expenses, excluding extraordinary expenses,
taxes, brokerage and interest expense at a ratio no higher than 0.80%. The
agreement may only be terminated with the consent of the fund's Board.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
(including one year of capped expenses in each period) remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ---------
$82 $258 $449 $1,001
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PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal conditions, the fund invests at least 80% of its
assets in investments the income from which is excluded from federal income
taxes and exempt from New York State and New York City personal income taxes.
The fund concentrates its investments in municipal bonds and notes of the State
of New York or governmental issuers in other locales, such as the Commonwealth
of Puerto Rico, the interest on which is exempt from New York State and New
York City personal income taxes.
The fund is managed in accordance with Rule 2a-7 under the Investment Company
Act of 1940, as amended. Fund securities are denominated in US dollars and have
remaining maturities of 397 days (about 13 months) or less at the time of
purchase. The fund may also invest in securities that have features that have
the effect of reducing their maturities to 397 days or less at the time of
purchase. The fund maintains a dollar-weighted average maturity of 90 days or
less.
Although the fund seeks to maintain a stable $1.00 share price, you could lose
money by investing in the fund. All money market instruments can change in
value when interest rates or an issuer's creditworthiness change.
The fund primarily invests in the following types of investments:
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PROSPECTUS May 1, 2010 NY Tax Free Money Fund
o Municipal trust receipts ("MTRs"), also called municipal asset-backed
securities, synthetic short-term derivatives, floating rate trust
certificates, or municipal securities trust receipts. MTRs are trusts that
hold municipal securities and that offer purchasers (such as the fund) a
conditional right to sell their interest in the underlying securities to a
financial institution at par value plus accrued interest. The fund may
invest up to 50% of its net assets in MTRs, as well as an additional 10% of
net assets on a temporary basis to manage inflows into the fund.
o General obligation notes and bonds, which an issuer backs with its full
faith and credit (taxing power).
o Revenue notes and bonds, which are payable from specific revenue sources.
These are often tied to the public works projects the bonds are financing,
but are not generally backed by the issuer's taxing power.
o Tax-exempt commercial paper, which is tax-exempt debt of borrowers that
typically matures in 270 days or less.
o Short-term municipal notes, such as tax anticipation notes, that are issued
in anticipation of the receipt of tax revenues.
o Municipal obligations backed by letters of credit (a document issued by a
bank guaranteeing the issuer's payments for a stated amount), general bank
guarantees or municipal bond insurance.
o Floating rate bonds, whose interest rates vary with changes in specified
market rates or indices. The fund may invest in high quality floating rate
bonds with maturities of one year or more if it has the right to sell them
back at their face value prior to maturity. The fund may also invest in
bonds that have features that reduce their maturities on their purchase
date.
o Tax-exempt private activity bonds, which are revenue bonds that finance
non-governmental activities, such as private industry construction and
which meet certain tax law requirements.
The fund may invest up to 20% of its total assets in notes and bonds that are
exempt from federal income taxes but not from New York State and New York City
personal income taxes when money available for investment exceeds the supply of
New York debt securities that meet the fund's criteria.
MANAGEMENT PROCESS. The fund buys short-term municipal obligations that at the
time of purchase:
o have received one of the two highest short-term ratings from two nationally
recognized statistical rating organizations (NRSROs) or one NRSRO if that
NRSRO is the only NRSRO that rates such obligations;
o are unrated, but are deemed by the Advisor to be of comparable quality to
one of the two highest short-term ratings; or
o have no short-term rating, but are rated in one of the top three highest
long-term rating categories by a NRSRO or are deemed by the Advisor to be
of comparable quality.
Working in consultation with portfolio management, a credit team screens
potential securities and develops a list of those that the fund may buy.
Portfolio management, looking for attractive yield and weighing considerations
such as credit quality, economic outlooks and possible interest rate movements,
then decides which securities on this list to buy. Portfolio management may
adjust the fund's exposure to interest rate risk, typically seeking to take
advantage of possible rises in interest rates and to preserve yield when
interest rates appear likely to fall.
MAIN RISKS
There are several risk factors that could reduce the yield you get from the
fund, cause the fund's performance to trail that of other investments, or cause
you to lose money.
MONEY MARKET FUND RISK. An investment in the fund is not insured or guaranteed
by the FDIC or any other government agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, this share price isn't
guaranteed, and if it falls below $1.00 you would lose money. The Advisor is
not obligated to take any action to maintain the $1.00 share price. The share
price could fall below $1.00 as a result of the actions of one or more large
investors in the fund. The credit quality of the fund's holdings can change
rapidly in certain markets, and the default of a single holding could cause the
fund's share price to fall below $1.00, as could periods of high redemption
pressures and/or illiquid markets. The actions of a few large investors in one
class of shares of the fund may have a significant adverse effect on the share
prices of all classes of shares of the fund.
INTEREST RATE RISK. Rising interest rates could cause the value of the fund's
investments - and therefore its share price as well - to decline. Conversely,
any decline in interest rates is likely to cause the fund's yield to decline,
and during periods of unusually low interest rates, the fund's yield may
approach zero. Over time, the total return of a money market fund may not keep
pace with inflation, which would result in a net loss of purchasing power for
long-term investors.
CREDIT RISK. The fund's performance could be hurt if a money market instrument
declines in credit quality or goes into default, or if an issuer does not make
timely payments of interest or principal. For money market instruments that
rely on third-party guarantors to support their credit quality, the same risks
may apply if the financial condition of the guarantor deteriorates or the
guarantor ceases insuring money market instruments. Because guarantors may
insure many types of debt obligations, including subprime mortgage bonds and
other high-risk bonds, their financial condition could deteriorate as a result
of events that have little or no connection to securities owned by the fund.
Some securities issued by US government agencies or instrumentalities are
backed by the full faith and credit of the US government. Others are supported
only by the
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PROSPECTUS May 1, 2010 NY Tax Free Money Fund
credit of that agency or instrumentality. For this latter group, if there is a
potential or actual loss of principal and interest of these securities, the US
government might provide financial support, but has no obligation to do so.
FOCUS RISK - NEW YORK MUNICIPAL SECURITIES. Because the fund focuses its
investments in New York municipal securities, its performance can be more
volatile than that of a fund that invests more broadly, and it has a relatively
large exposure to financial stresses affecting both New York City and New York
State. For example, a downturn in the financial industry could bring on a
fiscal crisis in New York City, or a national or regional economic downturn
could bring on such a crisis in New York State. Examples of other factors
include increased costs for domestic security and reduced monetary support from
the federal government. Over time, these issues may impair the state's or the
city's ability to repay its obligations.
A default or credit rating downgrade of a small number of municipal security
issuers could affect the market values and marketability of all New York
municipal securities and hurt the fund's performance.
SECURITY SELECTION RISK. Although short-term securities are relatively stable
investments, it is possible that the securities in which the fund invests will
not perform as expected. This could cause the fund's returns to lag behind
those of similar money market mutual funds and could result in a decline in
share price.
MUNICIPAL TRUST RECEIPTS RISK. The fund's investment in MTRs is subject to
similar risks as other investments in debt obligations, including interest rate
risk, credit risk and security selection risk. Additionally, investments in
MTRs raise certain tax issues that may not be presented by direct investments
in municipal bonds. There is some risk that certain issues could be resolved in
a manner that could adversely impact the performance of the fund.
TAX RISK. Any distributions to shareholders that represent income from taxable
securities will generally be taxable as ordinary income at both the state and
federal levels, while other distributions, such as capital gains, are taxable
to the same extent they would be for any mutual fund. New federal or state
governmental action could adversely affect the tax-exempt status of securities
held by the fund, resulting in higher tax liability for shareholders and
potentially hurting fund performance as well.
COUNTERPARTY RISK. A financial institution or other counterparty with whom the
fund does business (such as trading or securities lending), or that
underwrites, distributes or guarantees any investments or contracts that the
fund owns or is otherwise exposed to, may decline in financial health and
become unable to honor its commitments. This could cause losses for the fund or
could delay the return or delivery of collateral or other assets to the fund.
PREPAYMENT AND EXTENSION RISK. When interest rates fall, issuers of high
interest debt obligations may pay off the debts earlier than expected
(prepayment risk), and the fund may have to reinvest the proceeds at lower
yields. When interest rates rise, issuers of lower interest debt obligations
may pay off the debts later than expected (extension risk), thus keeping the
fund's assets tied up in lower interest debt obligations. Prepayments could
also create capital gains tax liability in some instances. Any unexpected
behavior in interest rates could increase the volatility of the fund's yield
and could hurt fund performance.
INTERMEDIARY RISK. The fund's shares are sold primarily through a small number
of intermediaries as cash sweep vehicles; the fund's assets could be
significantly reduced if a large intermediary discontinues using the fund. If a
large intermediary redeemed it shares, the fund would have to sell a
substantial amount of its holdings, possibly at a time and for a price it would
not otherwise chose.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk. Past
performance may not indicate future results. All performance figures below
assume that dividends were reinvested. The 7-DAY YIELD, which is often referred
to as the "current yield," is the income generated by the fund over a seven-day
period. This amount is then annualized, which means that we assume the fund
generates the same income every week for a year. For more recent performance
figures and the current yield, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
CALENDAR YEAR TOTAL RETURNS (%) (Investment Class)
Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
3.23 1.89 0.65 0.32 0.47 1.70 2.71 2.94 1.76 0.22
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Best Quarter: 0.86%, Q4 2000 Worst Quarter: 0.00%, Q4 2009
Year-to-Date as of 3/31/10: 0.00%
AVERAGE ANNUAL TOTAL RETURNS
(for periods ended 12/31/2009 expressed as a %)
1 5 10
YEAR YEARS YEARS
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0.22 1.86 1.58
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Total returns would have been lower if operating expenses hadn't been reduced.
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PROSPECTUS May 1, 2010 NY Tax Free Money Fund
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $2,000, and there is no minimum additional
investment. However, your financial advisor may set its own minimum investment.
TO PLACE ORDERS
MAIL First Investment Deutsche Asset Management c/o
DWS Investments, PO Box 219356
Kansas City, MO 64121-9356
Additional Investments Deutsche Asset Management c/o
DWS Investments, PO Box 219154
Kansas City, MO 64121-9154
Exchanges and Deutsche Asset Management c/o
Redemptions DWS Investments, PO Box 219557
Kansas City, MO 64121-9557
EXPEDITED MAIL Deutsche Asset Management c/o
DWS Investments, 210 West 10th Street
Kansas City, MO 64105-1614
TAX INFORMATION
The fund's distributions (distributions are declared daily and paid monthly)
are generally exempt from regular federal and state income tax. The fund may
include capital gains and losses in its monthly dividend. Net capital gains may
also be paid annually. A portion of the fund's dividends may be subject to
federal income tax, including the federal alternative minimum tax.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
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PROSPECTUS May 1, 2010 NY Tax Free Money Fund
FUND DETAILS
OTHER POLICIES
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other matters to know about:
o Although major changes tend to be infrequent, the fund's Board could change
the fund's investment objective without seeking shareholder approval.
However, the fund's policy of investing at least 80% of its assets in
investments the income from which is excluded from federal income taxes and
exempt from New York State and New York City personal income taxes cannot
be changed without shareholder approval.
o For temporary defensive purposes or when acceptable short-term municipal
securities are not available, more than 20% of the fund's assets may be
held in cash or invested in short-term taxable instruments, including
obligations of the US Government, its agencies or instrumentalities, other
short-term high quality rated debt securities or, if unrated, determined to
be of comparable quality in the opinion of the Advisor, commercial paper,
bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances, and repurchase agreements. Short-term
investments may also include shares of money market mutual funds.
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to
request a copy of the Statement of Additional Information (the back cover tells
you how to do this).
Keep in mind that there is no assurance that the fund will achieve its
objective.
A complete list of the fund's portfolio holdings is posted twice each month on
www.dws-investments.com (the Web site does not form a part of this prospectus).
Portfolio holdings as of the 15th day of each month are posted to the Web site
on or after month-end and portfolio holdings as of each month-end are posted to
the Web site on or after the 14th day of the following month. More frequent
posting of portfolio holdings information may be made from time to time on
www.dws-investments.com. The posted portfolio holdings information is available
by fund and generally remains accessible at least until the date on which the
fund files its Form N-CSR or N-Q with the Securities and Exchange Commission
for the period that includes the date as of which the posted information is
current. The fund also may post on the Web site, on the same or a more frequent
basis, various depictions of portfolio characteristics such as the allocation
of the portfolio across various security types, market sectors and sub-sectors
and maturities and risk characteristics of the portfolio. The fund's Statement
of Additional Information includes a description of the fund's policies and
procedures with respect to the disclosure of the fund's portfolio holdings.
WHO MANAGES AND OVERSEES THE FUND
THE INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), with
headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor
for the fund. Under the oversight of the Board, the Advisor makes investment
decisions, buys and sells securities for the fund and conducts research that
leads to these purchase and sale decisions. The Advisor provides a full range
of global investment advisory services to institutional and retail clients.
DWS Investments is part of the Asset Management division of Deutsche Bank AG
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.
5
PROSPECTUS May 1, 2010 Fund Details
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.
MANAGEMENT FEE. The Advisor receives a management fee from the fund. Below is
the actual rate paid by the fund for the most recent fiscal year, as a
percentage of the fund's average daily net assets.
FUND NAME FEE PAID
----------------------- ---------
NY Tax Free Money Fund 0.12%
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A discussion regarding the basis for the Board's approval of the fund's
investment management agreement is contained in the shareholder report for the
annual period ended December 31 (see "Shareholder reports" on the back cover).
Under a separate administrative services agreement between the fund and the
Advisor, the fund pays the Advisor a fee of 0.10% for providing most of the
fund's administrative services.
MULTI-MANAGER STRUCTURE. The Advisor, subject to the approval of the Board, has
ultimate responsibility to recommend the hiring, termination and replacement of
subadvisors. The fund and the Advisor have received an order from the SEC that
allows the fund and the Advisor to utilize a multi-manager structure in
managing the fund's assets. Pursuant to the SEC order, the Advisor, with the
approval of the fund's Board, is permitted to select subadvisors that are not
affiliates of the Advisor ("non-affiliated subadvisors") to manage all or a
portion of the fund's assets without obtaining shareholder approval. The
Advisor also has the discretion to terminate any subadvisor and allocate and
reallocate the fund's assets among any non-affiliated subadvisors. The SEC
order also permits the Advisor, subject to the approval of the Board, to
materially amend an existing subadvisory agreement with a non-affiliated
subadvisor without shareholder approval. The fund and the Advisor are subject
to the conditions imposed by the SEC order, including the condition that within
90 days of hiring of a new non-affiliated subadvisor, the fund will provide
shareholders with an information statement containing information about the new
non-affiliated subadvisor.
The fund and the Advisor have also filed an exemptive application with the SEC
requesting an order that would extend the relief granted with respect to
non-affiliated subadvisors to certain subadvisors that are affiliates of the
Advisor ("affiliated subadvisors"). If such relief is granted by the SEC, the
Advisor, with the approval of the fund's Board, would be able to hire
non-affiliated and/or affiliated subadvisors to manage all or a portion of the
fund's assets without obtaining shareholder approval. The Advisor would also
have the discretion to terminate any subadvisor and allocate and reallocate the
fund's assets among any other subadvisors (including terminating a
non-affiliated subadvisor and replacing them with an affiliated subadvisor).
The Advisor, subject to the approval of the Board, would also be able to
materially amend an existing subadvisory agreement with any such subadvisor
without shareholder approval. There can be no assurance that such relief will
be granted by the SEC. The fund and the Advisor will be subject to any new
conditions imposed by the SEC.
TRANSFER AGENT. DWS Investments Service Company ("DISC"), also an affiliate of
DIMA, serves as the fund's transfer agent. DISC, or your financial advisor,
performs the functions necessary to establish and maintain your account.
Besides setting up the account and processing your purchase and sale orders,
these functions include:
o keeping accurate, up-to-date records for your individual account;
o implementing any changes you wish to make in your account information;
o processing your requests for cash dividends and distributions from the fund;
and
o answering your questions on the fund's investment performance or
administration.
DISC delegates certain of these functions to a third party.
Financial advisors include brokers or any bank, dealer or any other financial
institutions that have sub-shareholder servicing agreements with DISC.
Financial advisors may charge additional fees to investors only for those
services not otherwise included in the DISC servicing agreement, such as cash
management or special trust or retirement investment reporting.
MANAGEMENT
A group of investment professionals is responsible for the day-to-day
management of the fund. These investment professionals have a broad range of
experience managing money market funds.
6
PROSPECTUS May 1, 2010 Fund Details
INVESTING IN THE FUND
BUYING AND SELLING SHARES
TO CONTACT DEUTSCHE ASSET MANAGEMENT
BY PHONE
CLASS NUMBER
------------ ---------------
INVESTMENT (800) 730-1313
------------ ---------------
BY MAIL
TYPE ADDRESS
----------------- ------------------------------------------------
EXPEDITED MAIL
All Requests Deutsche Asset Management
----------------- c/o DWS Investments
Attn: (see department names under Regular Mail)
210 West 10th Street
Kansas City, MO 64121-1614
------------------------------------------------
REGULAR MAIL
New Accounts Deutsche Asset Management
c/o DWS Investments
Attn: New Applications
P.O. Box 219356
Kansas City, MO 64121-9356
Additional Deutsche Asset Management
Investments c/o DWS Investments
Attn: Purchases
P.O. Box 219154
Kansas City, MO 64121-9154
Exchanges and Deutsche Asset Management
Redemptions c/o DWS Investments
Attn: Transaction Processing
P.O. Box 219557
Kansas City, MO 64121-9557
HOW TO BUY AND SELL SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $2,000, and there is no minimum additional
investment.
Shares of the fund may be offered to directors and trustees of any mutual fund
advised or administered by DIMA or its affiliates, employees of Deutsche Bank
AG, their spouses and minor children, or institutional clients and qualified
purchasers that are clients of a division of Deutsche Bank AG without regard to
the minimum investment required. The fund reserves the right to modify the
above eligibility requirements and investment minimum at any time.
HOW TO OPEN YOUR ACCOUNT
Mail: Complete and sign the account application
------------ that accompanies this prospectus. (You may
obtain additional applications by calling the
Service Center.) Mail the completed applica-
tion along with a check payable to the fund
you have selected to the Service Center. Be
sure to include the fund number. The appli-
cable addresses are shown above.
----------------------------------------------
Wire: Call the Service Center to set up a wire
------------ account.
----------------------------------------------
Fund Name: Please use the complete fund name.
------------ ----------------------------------------------
Please note that your account cannot become activated until we receive a
completed account application.
BUYING AND SELLING SHARES BY MAIL
BUYING: Send your check, payable to the fund you have selected, to the Service
Center. Be sure to include the fund number and your account number on your
check. If you are investing in more than one fund, make your check payable to
"Deutsche Asset Management" and include your account number, the names and
numbers of the fund you have selected, and the dollar amount or percentage you
would like invested in each fund. Mailing addresses are shown above.
SELLING: Send a signed letter to the Service Center with your name, your fund
number and account number, the fund's name, and either the number of shares you
wish to sell or the dollar amount you wish to receive. In certain
circumstances, a signature guarantee may be required to sell shares of the fund
by mail. For information about a signature guarantee, see "Signature
Guarantee." Unless exchanging into another Deutsche Asset Management fund or
DWS fund, you must submit a written authorization to sell shares in a
retirement account.
For more information on how to buy or sell shares by mail, refer to "Policies
about transactions - Transaction Processing."
7
PROSPECTUS May 1, 2010 Investing in the Fund
BUYING AND SELLING SHARES BY WIRE
BUYING: You may buy shares by wire only if your account is authorized to do so.
Instruct your bank to send payment by wire using the wire instructions below.
Bank Name: State Street Bank Boston
------------- --------------------------------------------
Routing No: 011000028
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Attn: DWS Investments
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DDA No: 99028102
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FBO: (Account name) (Account number)
------------- -------------------------------------------
Credit: (Fund name, Fund number and, if applicable,
-------------
class name) (Refer to the start of "The
Fund's Main Investment Strategy" above for
the fund number.)
--------------------------------------------
Refer to your account statement for the account name and number. Wire transfers
normally take two or more hours to complete. Wire transfers may be restricted
on bank holidays and at certain other times.
SELLING: You may sell shares by wire only if your account is authorized to do
so. You will be paid for redeemed shares by wire transfer of funds to your
financial advisor or bank upon receipt of a duly authorized redemption request
as promptly as feasible. For your protection, you may not change the
destination bank account over the phone.
For more information on how to buy or sell shares by wire, refer to "Policies
about transactions - Transaction Processing."
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to the fund, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of fund shares or the retention and/or servicing of fund
investors and fund shares ("revenue sharing"). Such revenue sharing payments
are in addition to any distribution or service fees payable under any Rule
12b-1 or service plan of the fund, any record keeping/sub-transfer agency/
networking fees payable by the fund (generally through the Distributor or an
affiliate) and/or the Distributor to certain financial advisors for performing
such services and any sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table
or elsewhere in this prospectus or the Statement of Additional Information as
payable to all financial advisors. For example, the Advisor, the Distributor
and/or their affiliates may compensate financial advisors for providing the
fund with "shelf space" or access to a third party platform or fund offering
list or other marketing programs, including, without limitation, inclusion of
the fund on preferred or recommended sales lists, mutual fund "supermarket"
platforms and other formal sales programs; granting the Distributor access to
the financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and obtaining other forms of
marketing support.
The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of the fund attributable to the financial
advisor, the particular fund or fund type or other measures as agreed to by the
Advisor, the Distributor and/or their affiliates and the financial advisors or
any combination thereof. The amount of these revenue sharing payments is
determined at the discretion of the Advisor, the Distributor and/or their
affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
0.01% up to 0.26% of assets of the fund serviced and maintained by the
financial advisor, 0.05% to 0.25% of sales of the fund attributable to the
financial advisor, a flat fee of $4,000 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of the fund or of any particular share class of the fund. You
should review your financial advisor's compensation disclosure and/or talk to
your financial advisor to obtain more information on how this compensation may
have influenced your financial advisor's recommendation of the fund. Additional
information regarding these revenue sharing payments is included in the fund's
Statement of Additional Information, which is available to you on request at no
charge (see the back cover of this prospectus for more information on how to
request a copy of the Statement of Additional Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. or ExpertPlan Inc. on the DWS Investments branded retirement plan
platform (the "Platform") with the level of revenue sharing payments being
based upon sales of both the DWS funds and the non-DWS funds by the financial
advisor on the Platform or
8
PROSPECTUS May 1, 2010 Investing in the Fund
current assets of both the DWS funds and the non-DWS funds serviced and
maintained by the financial advisor on the Platform.
It is likely that broker-dealers that execute portfolio transactions for the
fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.
POLICIES YOU SHOULD KNOW ABOUT
Along with the information on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on
distributions and taxes, applies to all investors, including those investing
through a financial advisor.
If you are investing through a financial advisor or through a retirement plan,
check the materials you received from them about how to buy and sell shares
because particular financial advisors or other intermediaries may adopt
policies, procedures or limitations that are separate from those described in
this prospectus. Please note that a financial advisor may charge fees separate
from those charged by the fund and may be compensated by the fund.
Keep in mind that the information in this prospectus applies only to the shares
offered herein. Other share classes are described in a separate prospectus and
have different fees, requirements and services.
POLICIES ABOUT TRANSACTIONS
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, we will ask for your name, address, date of birth and
other information that will allow us to identify you. Some or all of this
information will be used to verify the identity of all persons opening an
account.
We might request additional information about you (which may include certain
documents, such as articles of incorporation for companies) to help us verify
your identity and, in some cases, more information and/or documents may be
required to conduct the verification. The information and documents will be
used solely to verify your identity.
We will attempt to collect any missing required and requested information by
contacting you or your financial advisor. If we are unable to obtain this
information within the time frames established by the fund, then we may reject
your application and order.
The fund will not invest your purchase until all required and requested
identification information has been provided and your application has been
submitted in "good order." After we receive all the information, your
application is deemed to be in good order and we accept your purchase, you will
receive the net asset value per share next calculated.
If we are unable to verify your identity within time frames established by the
fund, after a reasonable effort to do so, you will receive written
notification.
With certain limited exceptions, only US residents may invest in the fund.
Because orders placed through a financial advisor must be forwarded to the
transfer agent before they can be processed, you'll need to allow extra time.
Your financial advisor should be able to tell you approximately when your order
will be processed. It is the responsibility of your financial advisor to
forward your order to the transfer agent in a timely manner.
TRANSACTION PROCESSING. Orders for the purchase of shares by wire transfer will
normally be effective at the share price next computed after receipt of the
wire transfer of the amount to be invested. If a wire transfer purchase order
is received in good order before 12:00 p.m. Eastern time, it will normally
receive the dividend for that day.
Shareholders known to the fund may notify the Service Center in advance of
their wire transfer purchase by calling the Service Center prior to the 12:00
p.m. Eastern time cut-off time and providing the amount of the order. The
investor will receive a confirmation number for the trade. If the fund receives
the wire transfer before the close of the Federal Funds wire system, the trade
will be entitled to that day's dividend. If the fund does not receive the wire
transfer by the close of the Federal Funds wire system, the trade may not
receive the dividend for that day and, depending upon the circumstances, the
trade may receive the dividend for the following business day or may be
canceled or rejected and, in any case, the investor may be charged for any
losses or fees that result, which may be paid by deductions from their account
or otherwise. The fund's Distributor may refuse to allow any investor to trade
with the fund in this manner and may require that the wire transfer of purchase
proceeds be received before the trade is considered in good order.
Investments by check will be effective on the business day following receipt
and will earn dividends the following business day. If you pay for shares by
check and the check fails
9
PROSPECTUS May 1, 2010 Investing in the Fund
to clear, we have the right to cancel your order, hold you liable or charge you
or your account for any losses or fees the fund or its agents have incurred.
Orders processed through dealers or other financial services firms via
Fund/SERV will be effected at the share price calculated on the trade day
(normally the date the order is received). Purchases processed via Fund/SERV
will begin earning dividends on the day the fund receives the payment
(typically the next business day). For redemptions processed via Fund/SERV, you
generally will receive dividends accrued up to, but not including, the business
day that payment for your shares is made.
When selling shares, shareholders generally receive dividends up to, but not
including, the business day following the day on which the shares were sold. To
sell shares, you must state whether you would like to receive the proceeds by
wire or check.
In order to receive proceeds by wire, contact the Service Center before 12:00
p.m. Eastern time. After you inform the Service Center of the amount of your
redemption, you will receive a trade confirmation number. If the fund receives
a sell request before 12:00 p.m. Eastern time and the request calls for
proceeds to be sent out by wire, the proceeds will normally be wired on the
same day. However, the shares sold will not earn that day's dividend.
As noted below, proceeds of a redemption may be delayed. The ability to receive
"same day" wire redemption proceeds can be affected by a variety of
circumstances including the time that the request is made, the level of
redemption requests and purchase orders and general market conditions. A
request for a same day wire that is received earlier in the day will be given
priority over a request received later in the day in the event that it is
necessary to limit the amount of same day wire redemptions.
SUB-MINIMUM BALANCES. The fund may close your account and send you the proceeds
if your balance falls below $500; we will give you 60 days' notice so you can
either increase your balance or close your account (these policies don't apply
to investor with $100,000 or more in DWS fund shares).
CHECKWRITING enables you to sell shares of the fund by writing a check. Your
investment keeps earning dividends until your check clears. Please note that we
will not accept checks for less than $500. Note as well that we can't honor any
check larger than your balance at the time the check is presented to us. It is
not a good idea to close out an account using a check because the account
balance could change between the time you write the check and the time it is
processed. Please keep in mind that if you make a purchase by check and that
check has not yet cleared, those funds will not be available for immediate
redemption.
REGULAR INVESTMENTS AND WITHDRAWALS enable you to set up a link between the
fund account and a bank account. Once this link is in place, you can move money
between the two with a phone call. You'll need to make sure your bank has
Automated Clearing House (ACH) services. Transactions take two to three days to
be completed. The minimum transaction is $50, and the account must have a
balance of at least $10,000 to qualify for these withdrawals.
THE FUND ACCEPTS AUTOMATED CLEARING HOUSE ("ACH") debit entries for accounts
that have elected the checkwriting redemption privilege. Upon receipt of an ACH
debit entry referencing your account number you authorize us to redeem shares
in your account to pay the entry to the third party originating the debit. Your
fund account statement will show all ACH debit entries in your account. IN CASE
OF ERRORS OR QUESTIONS ABOUT YOUR TRANSACTIONS OR PRE-AUTHORIZED TRANSFERS
please contact your financial advisor as soon as possible if you believe your
statement reflects an improper charge or if you need more information about an
ACH debit entry transaction. Your financial advisor must contact the
Shareholder Service Agent within sixty (60) days of the fund sending you the
first fund account statement on which an improper charge appears.
THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you currently have
shares in certificated form, you must include the share certificates properly
endorsed or accompanied by a duly executed stock power when exchanging or
redeeming shares. You may not exchange or redeem shares in certificate form by
telephone or via the Internet.
WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we don't
charge a fee to send or receive wires, it's possible that your bank may do so.
Wire transactions are generally completed within 24 hours. The fund can only
send wires of $1,000 or more and accept wires of $50 or more.
THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check drawn on a US
bank, a bank or Federal Funds wire transfer or an electronic bank transfer. The
fund does not accept third party checks. A third party check is a check made
payable to one or more parties and offered as payment to one or more other
parties (e.g., a check made payable to you that you offer as payment to someone
else). Checks should normally be payable to the fund or "Deutsche Asset
Management" and drawn by you or a financial institution on your behalf with
your name or account number included with the check. If you pay for shares by
check and the check fails to clear, we have the right to cancel your order,
hold you liable or charge you or your account for any losses or fees the fund
or its agents have incurred.
SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth of shares
or send proceeds to a third party or to a new address, you'll usually need to
place your order in writing and include a signature guarantee. However, if you
want money transferred electronically to a bank
10
PROSPECTUS May 1, 2010 Investing in the Fund
account that is already on file with us, you don't need a signature guarantee.
Also, generally you don't need a signature guarantee for an exchange, although
we may require one in certain other circumstances.
A signature guarantee is simply a certification of your signature - a valuable
safeguard against fraud. You can get a signature guarantee from an eligible
guarantor institution, including commercial banks, savings and loans, trust
companies, credit unions, member firms of a national stock exchange or any
member or participant of an approved signature guarantor program. We require
stamps from members of a medallion signature guarantee program. A notarized
document cannot be accepted in lieu of a signature guarantee.
SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION ACCOUNTS may
require additional documentation. Please call DWS Investments (see phone
numbers on the back cover) or contact your financial advisor for more
information.
MONEY FROM SHARES YOU SELL is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are circumstances when it could be longer,
including, but not limited to, when you are selling shares you bought recently
by check or ACH (the funds will be placed under a 10 calendar day hold to
ensure good funds) or when unusual circumstances prompt the SEC to allow
further delays. Certain expedited redemption processes (e.g., redemption
proceeds by wire) may also be delayed or unavailable when you are selling
shares recently purchased or in the event of the closing of the Federal Reserve
wire payment system. The fund reserves the right to suspend or postpone
redemptions as permitted pursuant to Section 22(e) of the 1940 Act. Generally,
those circumstances are when 1) the New York Stock Exchange is closed other
than customary weekend or holiday closings; 2) the SEC determines that trading
on the New York Stock Exchange is restricted; 3) the SEC determines that an
emergency exists which makes the disposal of securities owned by the fund or
the fair determination of the value of the fund's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also be delayed in the event of a
non-routine closure of the Federal Reserve wire payment system. For additional
rights reserved by the fund, please see "Other rights we reserve."
EXCHANGE PRIVILEGE. You can exchange all or part of your shares for shares of
certain other Deutsche Asset Management or DWS funds. When you exchange shares,
you are selling shares in one fund to purchase shares in another. Exchanges are
a shareholder privilege, not a right: we may reject any exchange order. Before
buying shares through an exchange, you should be sure to obtain a copy of that
fund's prospectus and read it carefully. You will receive a written
confirmation of each transaction from the Service Center or your financial
advisor.
Please note the following conditions:
o The accounts between which the exchange is taking place must have the same
name, address and taxpayer ID number.
o You may make the exchange by phone (if your account has the exchange by
phone feature) or by letter.
o If you are maintaining a taxable account, you may have to pay taxes on the
exchange.
o Your exchange must meet the minimum investment requirement for the fund
being purchased.
o The accounts between which you exchange must be the same share class.
ACCOUNT STATEMENTS. We or your financial advisor will generally furnish you
with a written confirmation of every transaction that affects your account
balance. You will also receive periodic statements reflecting the balances in
your account.
SHORT-TERM TRADING. Since money market funds hold short-term instruments and
are intended to provide liquidity to shareholders, the Advisor does not monitor
or limit short-term or excessive trading activity in the fund and, accordingly,
the Board of the fund has not approved any policies and procedures designed to
limit this activity. However, the fund reserves the right to and may reject or
cancel a purchase or exchange order into the fund for any reason, including if,
in the opinion of the Advisor, there appears to be a pattern of short-term or
excessive trading by an investor in another Deutsche Asset Management fund or
DWS fund.
HOW THE FUND CALCULATES SHARE PRICE
To calculate net asset value, or NAV, each share class uses the following
equation:
TOTAL TOTAL TOTAL NUMBER OF
- / = NAV
( )
ASSETS LIABILITIES SHARES OUTSTANDING
The price at which you buy and sell shares is based on the NAV per share next
calculated after the order is received and accepted by the transfer agent.
IN VALUING SECURITIES, we typically use amortized cost (the method used by most
money market funds) to account for any premiums or discounts above or below the
face value of any securities the fund buys, and round the per share NAV to the
nearest whole cent.
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (the
"Exchange") is open. Normally, the fund calculates its share price once every
business day as of the close of regular trading on the Exchange (typically 4:00
p.m. Eastern time, but sometimes earlier, as in the case of scheduled half-day
trading or unscheduled suspensions of trading). In the event of scheduled
partial day trading or unscheduled suspensions of trading on the
11
PROSPECTUS May 1, 2010 Investing in the Fund
Exchange, the calculation of share price shall be as of the close of trading on
the Exchange. In such instances, the latest time for receipt of wire purchase
transactions entitled to receive same day dividend treatment and for receipt of
redemption orders for same day wire transfer of proceeds will be the earlier of
(a) 12:00 p.m. Eastern time or (b) the early closing time of the Exchange. The
fund seeks to maintain a stable $1.00 share price.
The fund may, but is not required to, accept certain types of purchase and
redemption orders (not including exchanges) on days that the Exchange is
closed, or beyond an Exchange early closing time (referred to as a "Limited
Trading Period") if: (a) the Federal Reserve system is open, (b) the primary
trading markets for the fund's portfolio instruments are open and (c) the
Advisor believes there will be adequate liquidity in the short-term markets.
During any such Limited Trading Period, the fund will only accept purchase
orders by wire with advance telephone notification and telephone redemption
orders with proceeds to be sent by wire, ACH or check and will not accept
orders by any other means. (Automated Telephone Line orders are not permitted.)
If redemption proceeds are requested by ACH or check, the transmission of the
ACH payment or the mailing of the check, as the case may be, will be delayed by
at least one business day in comparison to normal trading periods. Orders
submitted by other means will be processed on the next day that the Exchange is
open. The calculation of share price will be as set forth in the prospectus for
normal trading days. Orders must be submitted by the cut-off times for receipt
of wire purchases entitled to that day's dividend and for receipt of telephone
redemption orders for same day wire transfer, which will be the earlier of: (a)
the times set forth in the prospectus for normal trading days or (b) such
earlier times that the fund determines based on the criteria described above.
If redemption proceeds are requested by ACH or check, orders must be received
prior to the calculation of share price. Please call (877) 237-1131 or visit
our Web site at www.dws-investments.com for additional information about
whether the fund will be open for business on a particular day. Information
concerning the intention of the fund to be open for a Limited Trading Period
will be available at least one business day prior to the applicable day that
the Exchange is closed or is closing early in the case of scheduled closings
and as soon as practical in the case of unscheduled closings.
OTHER RIGHTS WE RESERVE
You should be aware that we may do any of the following:
o withdraw or suspend the offering of shares at any time
o withhold a portion of your distributions and redemption proceeds if we have
been notified by the IRS that you are subject to backup withholding or if
you fail to provide us with the correct taxpayer ID number and certain
certifications, including certification that you are not subject to backup
withholding
o reject a new account application if you don't provide any required or
requested identifying information, or for any other reason
o refuse, cancel, limit or rescind any purchase or exchange order, without
prior notice; freeze any account (meaning you will not be able to purchase
fund shares in your account); suspend account services; and/or
involuntarily redeem your account if we think that the account is being
used for fraudulent or illegal purposes; one or more of these actions will
be taken when, at our sole discretion, they are deemed to be in the fund's
best interests or when the fund is requested or compelled to do so by
governmental authority or by applicable law
o close and liquidate your account if we are unable to verify your identity,
or for other reasons; if we decide to close your account, your fund shares
will be redeemed at the net asset value per share next calculated after we
determine to close your account; you may recognize a gain or loss on the
redemption of your fund shares and you may incur a tax liability
o pay you for shares you sell by "redeeming in kind," that is, by giving you
securities (which typically will involve brokerage costs for you to
liquidate) rather than cash; the fund generally won't make a redemption in
kind unless your requests over a 90-day period total more than $250,000 or
1% of the value of the fund's net assets, whichever is less
o change, add or withdraw various services, fees and account policies (for
example, we may adjust the fund's investment minimums at any time)
UNDERSTANDING DISTRIBUTIONS AND TAXES
The fund intends to distribute to its shareholders virtually all of its net
earnings. The fund can earn money in two ways: by receiving interest, dividends
or other income from securities it holds and by selling securities for more
than it paid for them. (The fund's earnings are separate from any gains or
losses stemming from your own purchase and sale of shares.) The fund may not
always pay a dividend or distribution for a given period.
THE FUND'S INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY TO
SHAREHOLDERS. The fund may take into account capital gains and losses in its
daily dividend declarations. The fund may make additional distributions for tax
purposes if necessary.
Dividends or distributions declared and payable to shareholders of record in
the last quarter of a given calendar year are treated for federal income tax
purposes as if they were received on December 31 of that year, if such
dividends or distributions are actually paid in January of the following year.
The fund intends to distribute tax-exempt interest earned from securities as
exempt-interest dividends, which are excluded from gross income for regular
federal income tax purposes, but may be subject to alternative minimum tax
12
PROSPECTUS May 1, 2010 Investing in the Fund
(AMT) and state and local income taxes. Exempt-interest dividends may be
properly designated as such only if, as anticipated, at least 50% of the value
of the assets of the fund is invested at the close of each quarter of its
taxable year in obligations of issuers the interest on which is excluded from
gross income for federal income tax purposes.
Individual shareholders who are residents of New York State will be able to
exclude for New York State personal income tax purposes the portion of any
exempt-interest dividend that is derived from interest on obligations of New
York State and its political subdivisions, as well as obligations of Puerto
Rico, the US Virgin Islands and Guam. Individual shareholders who are residents
of New York City will also be able to exclude such income for New York City
personal income tax purposes.
A portion of the fund's dividends may be taxable if they consist of earnings
from investment in taxable securities. Capital gains distributions may also be
taxable.
YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You can have
them all automatically reinvested in fund shares (at NAV), all sent to you by
check or wire, have one type reinvested and the other sent to you by check or
have them invested in another fund. Tell us your preference on your
application. If you don't indicate a preference, your dividends and
distributions will all be reinvested.
Distributions are treated the same for federal income tax purposes whether you
receive them in cash or reinvest them in additional shares. For federal income
tax purposes, an exchange is treated the same as a sale.
Because the fund seeks to maintain a stable share price, you are unlikely to
have capital gains or losses when you sell fund shares.
YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION EVERY JANUARY.
These statements tell you the amount and the federal income tax classification
of any dividends or distributions you received.
If the fund's distributions exceed its current and accumulated earnings and
profits, the excess will be treated for federal income tax purposes as a return
of capital to the extent of your basis in your shares and thereafter as a
capital gain. A return of capital distribution reduces the basis of your
shares. As a result, even though the fund seeks to maintain a stable share
price, you may recognize a capital gain when you sell your shares if you have
received a return of capital distribution.
The above discussion summarizes certain federal income tax consequences for
shareholders who are US persons. If you are a non-US person, please consult
your own tax advisor with respect to the US tax consequences to you of an
investment in the fund. For more information, see "Taxes" in the Statement of
Additional Information.
13
PROSPECTUS May 1, 2010 Investing in the Fund
FINANCIAL HIGHLIGHTS
The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).
NY TAX FREE MONEY FUND - INVESTMENT CLASS
YEARS ENDED DECEMBER 31, 2009 2008 2007 2006 2005
--------------------------------------------------- --------------- ---------- --------------- --------------- ---------------
SELECTED PER SHARE DATA
--------------------------------------------------- -
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income .002 .017 .029 .027 .017
--------------------------------------------------- -------- -------- -------- -------- --------
Net realized gain (loss)(a) - - - - -
--------------------------------------------------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS .002 .017 .029 .027 .017
--------------------------------------------------- -------- -------- -------- -------- --------
Less distributions from:
Net investment income ( .002) ( .017) ( .029) ( .027) ( .017)
--------------------------------------------------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------- -------- -------- -------- -------- --------
Total Return (%) .22 (b) 1.76 2.94 (b) 2.71 (b) 1.70 (b)
--------------------------------------------------- -------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------- --------
Net assets, end of period ($ millions) 81 117 78 55 90
--------------------------------------------------- -------- -------- -------- -------- --------
Ratio of expenses before expense reductions (%) .84 .72 .76 .98 .87
--------------------------------------------------- -------- -------- -------- -------- --------
Ratio of expenses after expense reductions (%) .43 .72 .75 .75 .75
--------------------------------------------------- -------- -------- -------- -------- --------
Ratio of net investment income (%) .29 1.68 2.89 2.67 1.67
--------------------------------------------------- -------- -------- -------- -------- --------
(a) Amount is less than $.0005 per share.
(b) Total return would have been lower had certain expenses not been
reduced.
14
PROSPECTUS May 1, 2010 Financial Highlights
APPENDIX
HYPOTHETICAL EXPENSE SUMMARY
Using the annual fund operating expense ratios presented in the fee tables in
the fund prospectus, the Hypothetical Expense Summary shows the estimated fees
and expenses, in actual dollars, that would be charged on a hypothetical
investment of $10,000 in the fund held for the next 10 years and the impact of
such fees and expenses on fund returns for each year and cumulatively, assuming
a 5% return for each year. The historical rate of return for the fund may be
higher or lower than 5% and, for money market funds, is typically less than 5%.
The tables also assume that all dividends and distributions are reinvested and
that, where applicable, Class B shares convert to Class A shares after six
years. The annual fund expense ratios shown are net of any contractual fee
waivers or expense reimbursements, if any, for the period of the contractual
commitment. The tables reflect the maximum initial sales charge, if any, but do
not reflect any contingent deferred sales charge or redemption fees, if any,
which may be payable upon redemption. If contingent deferred sales charges or
redemption fees were shown, the "Hypothetical Year-End Balance After Fees and
Expenses" amounts shown would be lower and the "Annual Fees and Expenses"
amounts shown would be higher. Also, please note that if you are investing
through a third party provider, that provider may have fees and expenses
separate from those of the fund that are not reflected here. Mutual fund fees
and expenses fluctuate over time and actual expenses may be higher or lower
than those shown.
The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the fund's prospectus to
consider the investment objectives, risks, expenses and charges of the fund
prior to investing.
NY TAX FREE MONEY FUND - INVESTMENT CLASS
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 0.80% 4.20% $ 10,420.00 $ 81.68
--- ----- ---- ----- ----------- ----------
2 10.25% 0.81% 8.57% $ 10,856.60 $ 86.17
--- ----- ---- ----- ----------- ----------
3 15.76% 0.81% 13.11% $ 11,311.49 $ 89.78
--- ----- ---- ----- ----------- ----------
4 21.55% 0.81% 17.85% $ 11,785.44 $ 93.54
--- ----- ---- ----- ----------- ----------
5 27.63% 0.81% 22.79% $ 12,279.25 $ 97.46
--- ----- ---- ----- ----------- ----------
6 34.01% 0.81% 27.94% $ 12,793.75 $ 101.55
--- ----- ---- ----- ----------- ----------
7 40.71% 0.81% 33.30% $ 13,329.81 $ 105.80
--- ----- ---- ----- ----------- ----------
8 47.75% 0.81% 38.88% $ 13,888.33 $ 110.23
--- ----- ---- ----- ----------- ----------
9 55.13% 0.81% 44.70% $ 14,470.25 $ 114.85
--- ----- ---- ----- ----------- ----------
10 62.89% 0.81% 50.77% $ 15,076.55 $ 119.66
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,000.72
--- ----------
15
PROSPECTUS May 1, 2010 Appendix
TO GET MORE INFORMATION
SHAREHOLDER REPORTS. These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.
STATEMENT OF ADDITIONAL INFORMATION (SAI). This tells you more about the fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
For a free copy of any of these documents or to request other information about
the fund, contact Deutsche Asset Management at the phone number or address
listed below. SAIs and shareholder reports are also available through the DWS
Investments Web site at www.dws-investments.com. These documents and other
information about the fund are available from the EDGAR Database on the SEC's
Internet site at www.sec.gov. If you like, you may obtain copies of this
information, after paying a copying fee, by e-mailing a request to
publicinfo@sec.gov or by writing the SEC at the address listed below.
You can also review and copy these documents and other information about the
fund, including the fund's SAI, 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 or (202) 551-8090.
In order to reduce the amount of mail you receive and to help reduce expenses,
we generally send a single copy of any shareholder report and prospectus to
each household. If you do not want the mailing of these documents to be
combined with those for other members of your household, please contact your
financial advisor or call the number provided.
CONTACT INFORMATION
DEUTSCHE ASSET MANAGE- PO Box 219356
MENT Kansas City, MO 64121-9356
www.dws-investments.com
(800) 730-1313
SEC 100 F Street, N.E.
Washington, D.C. 20549-1520
WWW.SEC.GOV
(800) SEC-0330
DISTRIBUTOR DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
SEC FILE NUMBER DWS Advisor Funds
NY Tax Free Money Fund
811-04760
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
(05/01/10) NYTF-1
[GRAPHIC APPEARS HERE]
PROSPECTUS
MAY 1, 2010
NY Tax Free Money Fund
CLASS/TICKER TAX-EXEMPT NEW YORK MONEY MARKET FUND NYFXX
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
TABLE OF CONTENTS
NY TAX FREE MONEY FUND
Investment Objective........................... 1
Fees and Expenses of the Fund.................. 1
Principal Investment Strategy.................. 1
Main Risks..................................... 2
Past Performance............................... 3
Management..................................... 3
Purchase and Sale of Fund Shares............... 4
Tax Information................................ 4
Payments to Broker-Dealers and
Other Financial Intermediaries................. 4
FUND DETAILS
Other Policies................................. 5
Who Manages and Oversees the Fund.............. 5
Management..................................... 6
INVESTING IN THE FUND
Buying and Selling Shares...................... 7
How to Buy and Sell Shares..................... 7
Financial Intermediary Support Payments........ 7
Policies You Should Know About................. 8
Policies About Transactions.................... 8
How the Fund Calculates Share Price............ 10
Other Rights We Reserve........................ 11
Understanding Distributions and Taxes.......... 11
FINANCIAL HIGHLIGHTS........................... 13
APPENDIX....................................... 14
Hypothetical Expense Summary................... 14
-------------------------------------------------------------------------------
YOUR INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY, ENTITY OR PERSON.
-------------------------------------------------------------------------------
NY TAX FREE MONEY FUND
INVESTMENT OBJECTIVE
The fund seeks a high level of current income exempt from federal and New York
income taxes consistent with liquidity and the preservation of capital.
FEES AND EXPENSES OF THE FUND
These are the fees you may pay when you buy and hold shares.
SHAREHOLDER FEES
(paid directly from your investment) None
-------------------------------------- -----
ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a % of the value of your investment)
Management fee 0.12
--------------------------------------------------- ----
Distribution/service
(12b-1) fees 0.50
--------------------------------------------------- ----
Other expenses (includes an administrative fee)(1) 0.33
--------------------------------------------------- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 0.95
--------------------------------------------------- ----
(1) Restated on an annualized basis to exclude the fees paid in connection
with the fund's participation in the U.S. Treasury Department's Temporary
Guarantee Program, which expired on September 18, 2009. If those fees had
been included, the fund's "Other expenses" and "Total annual fund
operating expenses" would have been higher.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ---------
$97 $303 $525 $1,166
--- ---- ---- ------
PRINCIPAL INVESTMENT STRATEGY
MAIN INVESTMENTS. Under normal conditions, the fund invests at least 80% of its
assets in investments the income from which is excluded from federal income
taxes and exempt from New York State and New York City personal income taxes.
The fund concentrates its investments in municipal bonds and notes of the State
of New York or governmental issuers in other locales, such as the Commonwealth
of Puerto Rico, the interest on which is exempt from New York State and New
York City personal income taxes.
The fund is managed in accordance with Rule 2a-7 under the Investment Company
Act of 1940, as amended. Fund securities are denominated in US dollars and have
remaining maturities of 397 days (about 13 months) or less at the time of
purchase. The fund may also invest in securities that have features that have
the effect of reducing their maturities to 397 days or less at the time of
purchase. The fund maintains a dollar-weighted average maturity of 90 days or
less.
Although the fund seeks to maintain a stable $1.00 share price, you could lose
money by investing in the fund. All money market instruments can change in
value when interest rates or an issuer's creditworthiness change.
The fund primarily invests in the following types of investments:
o Municipal trust receipts ("MTRs"), also called municipal asset-backed
securities, synthetic short-term derivatives, floating rate trust
certificates, or municipal securities trust receipts. MTRs are trusts that
hold municipal securities and that offer purchasers (such as the fund) a
conditional right to sell their interest in the underlying securities to a
financial institution at par value plus accrued interest. The fund may
invest up to 50% of its net assets in MTRs, as well as an additional 10% of
net assets on a temporary basis to manage inflows into the fund.
o General obligation notes and bonds, which an issuer backs with its full
faith and credit (taxing power).
1
PROSPECTUS May 1, 2010 NY Tax Free Money Fund
o Revenue notes and bonds, which are payable from specific revenue sources.
These are often tied to the public works projects the bonds are financing,
but are not generally backed by the issuer's taxing power.
o Tax-exempt commercial paper, which is tax-exempt debt of borrowers that
typically matures in 270 days or less.
o Short-term municipal notes, such as tax anticipation notes, that are issued
in anticipation of the receipt of tax revenues.
o Municipal obligations backed by letters of credit (a document issued by a
bank guaranteeing the issuer's payments for a stated amount), general bank
guarantees or municipal bond insurance.
o Floating rate bonds, whose interest rates vary with changes in specified
market rates or indices. The fund may invest in high quality floating rate
bonds with maturities of one year or more if it has the right to sell them
back at their face value prior to maturity. The fund may also invest in
bonds that have features that reduce their maturities on their purchase
date.
o Tax-exempt private activity bonds, which are revenue bonds that finance
non-governmental activities, such as private industry construction and
which meet certain tax law requirements.
The fund may invest up to 20% of its total assets in notes and bonds that are
exempt from federal income taxes but not from New York State and New York City
personal income taxes when money available for investment exceeds the supply of
New York debt securities that meet the fund's criteria.
MANAGEMENT PROCESS. The fund buys short-term municipal obligations that at the
time of purchase:
o have received one of the two highest short-term ratings from two nationally
recognized statistical rating organizations (NRSROs) or one NRSRO if that
NRSRO is the only NRSRO that rates such obligations;
o are unrated, but are deemed by the Advisor to be of comparable quality to
one of the two highest short-term ratings; or
o have no short-term rating, but are rated in one of the top three highest
long-term rating categories by a NRSRO or are deemed by the Advisor to be
of comparable quality.
Working in consultation with portfolio management, a credit team screens
potential securities and develops a list of those that the fund may buy.
Portfolio management, looking for attractive yield and weighing considerations
such as credit quality, economic outlooks and possible interest rate movements,
then decides which securities on this list to buy. Portfolio management may
adjust the fund's exposure to interest rate risk, typically seeking to take
advantage of possible rises in interest rates and to preserve yield when
interest rates appear likely to fall.
MAIN RISKS
There are several risk factors that could reduce the yield you get from the
fund, cause the fund's performance to trail that of other investments, or cause
you to lose money.
MONEY MARKET FUND RISK. An investment in the fund is not insured or guaranteed
by the FDIC or any other government agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, this share price isn't
guaranteed, and if it falls below $1.00 you would lose money. The Advisor is
not obligated to take any action to maintain the $1.00 share price. The share
price could fall below $1.00 as a result of the actions of one or more large
investors in the fund. The credit quality of the fund's holdings can change
rapidly in certain markets, and the default of a single holding could cause the
fund's share price to fall below $1.00, as could periods of high redemption
pressures and/or illiquid markets. The actions of a few large investors in one
class of shares of the fund may have a significant adverse effect on the share
prices of all classes of shares of the fund.
INTEREST RATE RISK. Rising interest rates could cause the value of the fund's
investments - and therefore its share price as well - to decline. Conversely,
any decline in interest rates is likely to cause the fund's yield to decline,
and during periods of unusually low interest rates, the fund's yield may
approach zero. Over time, the total return of a money market fund may not keep
pace with inflation, which would result in a net loss of purchasing power for
long-term investors.
CREDIT RISK. The fund's performance could be hurt if a money market instrument
declines in credit quality or goes into default, or if an issuer does not make
timely payments of interest or principal. For money market instruments that
rely on third-party guarantors to support their credit quality, the same risks
may apply if the financial condition of the guarantor deteriorates or the
guarantor ceases insuring money market instruments. Because guarantors may
insure many types of debt obligations, including subprime mortgage bonds and
other high-risk bonds, their financial condition could deteriorate as a result
of events that have little or no connection to securities owned by the fund.
Some securities issued by US government agencies or instrumentalities are
backed by the full faith and credit of the US government. Others are supported
only by the credit of that agency or instrumentality. For this latter group, if
there is a potential or actual loss of principal and interest of these
securities, the US government might provide financial support, but has no
obligation to do so.
FOCUS RISK - NEW YORK MUNICIPAL SECURITIES. Because the fund focuses its
investments in New York municipal securities, its performance can be more
volatile than that of a fund that invests more broadly, and it has a relatively
large exposure to financial stresses affecting both New York City and New York
State. For example, a downturn in
2
PROSPECTUS May 1, 2010 NY Tax Free Money Fund
the financial industry could bring on a fiscal crisis in New York City, or a
national or regional economic downturn could bring on such a crisis in New York
State. Examples of other factors include increased costs for domestic security
and reduced monetary support from the federal government. Over time, these
issues may impair the state's or the city's ability to repay its obligations.
A default or credit rating downgrade of a small number of municipal security
issuers could affect the market values and marketability of all New York
municipal securities and hurt the fund's performance.
SECURITY SELECTION RISK. Although short-term securities are relatively stable
investments, it is possible that the securities in which the fund invests will
not perform as expected. This could cause the fund's returns to lag behind
those of similar money market mutual funds and could result in a decline in
share price.
MUNICIPAL TRUST RECEIPTS RISK. The fund's investment in MTRs is subject to
similar risks as other investments in debt obligations, including interest rate
risk, credit risk and security selection risk. Additionally, investments in
MTRs raise certain tax issues that may not be presented by direct investments
in municipal bonds. There is some risk that certain issues could be resolved in
a manner that could adversely impact the performance of the fund.
TAX RISK. Any distributions to shareholders that represent income from taxable
securities will generally be taxable as ordinary income at both the state and
federal levels, while other distributions, such as capital gains, are taxable
to the same extent they would be for any mutual fund. New federal or state
governmental action could adversely affect the tax-exempt status of securities
held by the fund, resulting in higher tax liability for shareholders and
potentially hurting fund performance as well.
COUNTERPARTY RISK. A financial institution or other counterparty with whom the
fund does business (such as trading or securities lending), or that
underwrites, distributes or guarantees any investments or contracts that the
fund owns or is otherwise exposed to, may decline in financial health and
become unable to honor its commitments. This could cause losses for the fund or
could delay the return or delivery of collateral or other assets to the fund.
PREPAYMENT AND EXTENSION RISK. When interest rates fall, issuers of high
interest debt obligations may pay off the debts earlier than expected
(prepayment risk), and the fund may have to reinvest the proceeds at lower
yields. When interest rates rise, issuers of lower interest debt obligations
may pay off the debts later than expected (extension risk), thus keeping the
fund's assets tied up in lower interest debt obligations. Prepayments could
also create capital gains tax liability in some instances. Any unexpected
behavior in interest rates could increase the volatility of the fund's yield
and could hurt fund performance.
INTERMEDIARY RISK. The fund's shares are sold primarily through a small number
of intermediaries as cash sweep vehicles; the fund's assets could be
significantly reduced if a large intermediary discontinues using the fund. If a
large intermediary redeemed it shares, the fund would have to sell a
substantial amount of its holdings, possibly at a time and for a price it would
not otherwise chose.
PAST PERFORMANCE
How a fund's returns vary from year to year can give an idea of its risk. Past
performance may not indicate future results. All performance figures below
assume that dividends were reinvested. The 7-DAY YIELD, which is often referred
to as the "current yield," is the income generated by the fund over a seven-day
period. This amount is then annualized, which means that we assume the fund
generates the same income every week for a year. For more recent performance
figures and the current yield, go to www.dws-investments.com (the Web site does
not form a part of this prospectus) or call the phone number for your share
class included in this prospectus.
Tax-Exempt New York Money Market Fund Shares of the fund commenced operations
on March 22, 2007. Performance prior to class inception is based on the
performance of the fund's Investment Class shares, adjusted to reflect the
higher expenses of this share class. Investment Class shares are offered in a
separate prospectus.
CALENDAR YEAR TOTAL RETURNS (%) (Tax-Exempt New York Money Market Fund)
Returns for other classes were different and are not shown here.
[BAR GRAPHIC OMITTED HERE]
[BAR GRAPHIC DATA]
3.02 1.68 0.44 0.11 0.26 1.48 2.50 2.76 1.57 0.13
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Best Quarter: 0.80%, Q4 2000 Worst Quarter: 0.00%, Q3 2003
Year-to-Date as of 3/31/10: 0.00%
AVERAGE ANNUAL TOTAL RETURNS
(for periods ended 12/31/2009 expressed as a %)
1 5 10
YEAR YEARS YEARS
--------- --------- ---------
0.13 1.69 1.39
--- ---- ---- ----
Total returns would have been lower if operating expenses hadn't been reduced.
MANAGEMENT
INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc.
3
PROSPECTUS May 1, 2010 NY Tax Free Money Fund
PURCHASE AND SALE OF FUND SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $2,000 and the minimum investment with an
automatic investment plan is $50. The minimum additional investment is $100.
However, your financial advisor may set its own minimum investment.
TO PLACE ORDERS
The fund is available only through a financial advisor, such as a broker or
financial institution. You should contact a representative of your financial
advisor for instructions on how to buy or sell fund shares. However, if your
shares are registered directly with the fund's transfer agent, you can sell
them by sending a written request (with a signature guarantee) to:
TYPE ADDRESS
----------------- -----------------------------
REGULAR MAIL
Exchanges and DWS Investments
Redemptions Attn: Transaction Processing
P.O. Box 219151
Kansas City, MO 64121-9151
TAX INFORMATION
The fund's distributions (distributions are declared daily and paid monthly)
are generally exempt from regular federal and state income tax. The fund may
include capital gains and losses in its monthly dividend. Net capital gains may
also be paid annually. A portion of the fund's dividends may be subject to
federal income tax, including the federal alternative minimum tax.
PAYMENTS TO BROKER-DEALERS AND
OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its affiliates may pay the
intermediary for the sale of fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the fund over another
investment. Ask your salesperson or visit your financial intermediary's web
site for more information.
4
PROSPECTUS May 1, 2010 NY Tax Free Money Fund
FUND DETAILS
OTHER POLICIES
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other matters to know about:
o Although major changes tend to be infrequent, the fund's Board could change
the fund's investment objective without seeking shareholder approval.
However, the fund's policy of investing at least 80% of its assets in
investments the income from which is excluded from federal income taxes and
exempt from New York State and New York City personal income taxes cannot
be changed without shareholder approval.
o For temporary defensive purposes or when acceptable short-term municipal
securities are not available, more than 20% of the fund's assets may be
held in cash or invested in short-term taxable instruments, including
obligations of the US Government, its agencies or instrumentalities, other
short-term high quality rated debt securities or, if unrated, determined to
be of comparable quality in the opinion of the Advisor, commercial paper,
bank obligations, including negotiable certificates of deposit, time
deposits and bankers' acceptances, and repurchase agreements. Short-term
investments may also include shares of money market mutual funds.
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to
request a copy of the Statement of Additional Information (the back cover tells
you how to do this).
Keep in mind that there is no assurance that the fund will achieve its
objective.
A complete list of the fund's portfolio holdings is posted twice each month on
www.dws-investments.com (the Web site does not form a part of this prospectus).
Portfolio holdings as of the 15th day of each month are posted to the Web site
on or after month-end and portfolio holdings as of each month-end are posted to
the Web site on or after the 14th day of the following month. More frequent
posting of portfolio holdings information may be made from time to time on
www.dws-investments.com. The posted portfolio holdings information is available
by fund and generally remains accessible at least until the date on which the
fund files its Form N-CSR or N-Q with the Securities and Exchange Commission
for the period that includes the date as of which the posted information is
current. The fund also may post on the Web site, on the same or a more frequent
basis, various depictions of portfolio characteristics such as the allocation
of the portfolio across various security types, market sectors and sub-sectors
and maturities and risk characteristics of the portfolio. The fund's Statement
of Additional Information includes a description of the fund's policies and
procedures with respect to the disclosure of the fund's portfolio holdings.
WHO MANAGES AND OVERSEES THE FUND
THE INVESTMENT ADVISOR
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), with
headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor
for the fund. Under the oversight of the Board, the Advisor makes investment
decisions, buys and sells securities for the fund and conducts research that
leads to these purchase and sale decisions. The Advisor provides a full range
of global investment advisory services to institutional and retail clients.
DWS Investments is part of the Asset Management division of Deutsche Bank AG
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.
5
PROSPECTUS May 1, 2010 Fund Details
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.
MANAGEMENT FEE. The Advisor receives a management fee from the fund. Below is
the actual rate paid by the fund for the most recent fiscal year, as a
percentage of the fund's average daily net assets.
FUND NAME FEE PAID
----------------------- ---------
NY Tax Free Money Fund 0.12%
------------------------ ----
A discussion regarding the basis for the Board's approval of the fund's
investment management agreement is contained in the shareholder report for the
annual period ended December 31 (see "Shareholder reports" on the back cover).
Under a separate administrative services agreement between the fund and the
Advisor, the fund pays the Advisor a fee of 0.10% for providing most of the
fund's administrative services.
MULTI-MANAGER STRUCTURE. The Advisor, subject to the approval of the Board, has
ultimate responsibility to recommend the hiring, termination and replacement of
subadvisors. The fund and the Advisor have received an order from the SEC that
allows the fund and the Advisor to utilize a multi-manager structure in
managing the fund's assets. Pursuant to the SEC order, the Advisor, with the
approval of the fund's Board, is permitted to select subadvisors that are not
affiliates of the Advisor ("non-affiliated subadvisors") to manage all or a
portion of the fund's assets without obtaining shareholder approval. The
Advisor also has the discretion to terminate any subadvisor and allocate and
reallocate the fund's assets among any non-affiliated subadvisors. The SEC
order also permits the Advisor, subject to the approval of the Board, to
materially amend an existing subadvisory agreement with a non-affiliated
subadvisor without shareholder approval. The fund and the Advisor are subject
to the conditions imposed by the SEC order, including the condition that within
90 days of hiring of a new non-affiliated subadvisor, the fund will provide
shareholders with an information statement containing information about the new
non-affiliated subadvisor.
The fund and the Advisor have also filed an exemptive application with the SEC
requesting an order that would extend the relief granted with respect to
non-affiliated subadvisors to certain subadvisors that are affiliates of the
Advisor ("affiliated subadvisors"). If such relief is granted by the SEC, the
Advisor, with the approval of the fund's Board, would be able to hire
non-affiliated and/or affiliated subadvisors to manage all or a portion of the
fund's assets without obtaining shareholder approval. The Advisor would also
have the discretion to terminate any subadvisor and allocate and reallocate the
fund's assets among any other subadvisors (including terminating a
non-affiliated subadvisor and replacing them with an affiliated subadvisor).
The Advisor, subject to the approval of the Board, would also be able to
materially amend an existing subadvisory agreement with any such subadvisor
without shareholder approval. There can be no assurance that such relief will
be granted by the SEC. The fund and the Advisor will be subject to any new
conditions imposed by the SEC.
TRANSFER AGENT. DWS Investments Service Company ("DISC"), also an affiliate of
DIMA, serves as the fund's transfer agent. DISC, or your financial advisor,
performs the functions necessary to establish and maintain your account.
Besides setting up the account and processing your purchase and sale orders,
these functions include:
o keeping accurate, up-to-date records for your individual account;
o implementing any changes you wish to make in your account information;
o processing your requests for cash dividends and distributions from the fund;
and
o answering your questions on the fund's investment performance or
administration.
DISC delegates certain of these functions to a third party.
Financial advisors include brokers or any bank, dealer or any other financial
institutions that have sub-shareholder servicing agreements with DISC.
Financial advisors may charge additional fees to investors only for those
services not otherwise included in the DISC servicing agreement, such as cash
management or special trust or retirement investment reporting.
MANAGEMENT
A group of investment professionals is responsible for the day-to-day
management of the fund. These investment professionals have a broad range of
experience managing money market funds.
6
PROSPECTUS May 1, 2010 Fund Details
INVESTING IN THE FUND
BUYING AND SELLING SHARES
The following pages describe the main policies associated with buying and
selling shares of the fund. There is also information on dividends and taxes
and other matters that may affect you as the shareholder.
Because the fund is available only through a financial advisor, such as a
broker or financial institution, you should contact a representative of your
financial advisor for instructions on how to buy or sell fund shares.
HOW TO BUY AND SELL SHARES
MINIMUM INITIAL INVESTMENT
The minimum initial investment is $2,000 and the minimum investment with an
automatic investment plan is $50. The minimum additional investment is $100.
However, your financial advisor may set its own minimum investment.
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to the fund, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of fund shares or the retention and/or servicing of fund
investors and fund shares ("revenue sharing"). Such revenue sharing payments
are in addition to any distribution or service fees payable under any Rule
12b-1 or service plan of the fund, any record keeping/sub-transfer agency/
networking fees payable by the fund (generally through the Distributor or an
affiliate) and/or the Distributor to certain financial advisors for performing
such services and any sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table
or elsewhere in this prospectus or the Statement of Additional Information as
payable to all financial advisors. For example, the Advisor, the Distributor
and/or their affiliates may compensate financial advisors for providing the
fund with "shelf space" or access to a third party platform or fund offering
list or other marketing programs, including, without limitation, inclusion of
the fund on preferred or recommended sales lists, mutual fund "supermarket"
platforms and other formal sales programs; granting the Distributor access to
the financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and obtaining other forms of
marketing support.
The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of the fund attributable to the financial
advisor, the particular fund or fund type or other measures as agreed to by the
Advisor, the Distributor and/or their affiliates and the financial advisors or
any combination thereof. The amount of these revenue sharing payments is
determined at the discretion of the Advisor, the Distributor and/or their
affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
0.01% up to 0.26% of assets of the fund serviced and maintained by the
financial advisor, 0.05% to 0.25% of sales of the fund attributable to the
financial advisor, a flat fee of $4,000 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of the fund or of any particular share class of the fund. You
should review your financial advisor's compensation disclosure and/or talk to
your financial advisor to obtain more information on how this compensation may
have influenced your financial advisor's recommendation of the fund. Additional
information regarding these revenue sharing payments is included in the fund's
Statement of Additional Information, which is
7
PROSPECTUS May 1, 2010 Investing in the Fund
available to you on request at no charge (see the back cover of this prospectus
for more information on how to request a copy of the Statement of Additional
Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. or ExpertPlan Inc. on the DWS Investments branded retirement plan
platform (the "Platform") with the level of revenue sharing payments being
based upon sales of both the DWS funds and the non-DWS funds by the financial
advisor on the Platform or current assets of both the DWS funds and the non-DWS
funds serviced and maintained by the financial advisor on the Platform.
It is likely that broker-dealers that execute portfolio transactions for the
fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.
POLICIES YOU SHOULD KNOW ABOUT
Along with the information on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on
distributions and taxes, applies to all investors, including those investing
through a financial advisor.
If you are investing through a financial advisor or through a retirement plan,
check the materials you received from them about how to buy and sell shares
because particular financial advisors or other intermediaries may adopt
policies, procedures or limitations that are separate from those described in
this prospectus. Please note that a financial advisor may charge fees separate
from those charged by the fund and may be compensated by the fund.
Keep in mind that the information in this prospectus applies only to the shares
offered herein. Other share classes are described in a separate prospectus and
have different fees, requirements and services.
RULE 12B-1 PLAN
The fund has adopted a plan under Rule 12b-1 that authorizes the payment of an
annual administrative services fee, payable monthly, of 0.50% of the fund's
Tax-Exempt New York Money Market Fund shares average daily net assets. Because
12b-1 fees are paid out of the fund's assets, attributable to a particular
share class, on an ongoing basis, they will, over time, increase the cost of an
investment in that share class and may cost more than paying other types of
sales charges.
POLICIES ABOUT TRANSACTIONS
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, we will ask for your name, address, date of birth and
other information that will allow us to identify you. Some or all of this
information will be used to verify the identity of all persons opening an
account.
We might request additional information about you (which may include certain
documents, such as articles of incorporation for companies) to help us verify
your identity and, in some cases, more information and/or documents may be
required to conduct the verification. The information and documents will be
used solely to verify your identity.
We will attempt to collect any missing required and requested information by
contacting you or your financial advisor. If we are unable to obtain this
information within the time frames established by the fund, then we may reject
your application and order.
The fund will not invest your purchase until all required and requested
identification information has been provided and your application has been
submitted in "good order." After we receive all the information, your
application is deemed to be in good order and we accept your purchase, you will
receive the net asset value per share next calculated.
If we are unable to verify your identity within time frames established by the
fund, after a reasonable effort to do so, you will receive written
notification.
With certain limited exceptions, only US residents may invest in the fund.
Because orders placed through a financial advisor must be forwarded to the
transfer agent before they can be processed, you'll need to allow extra time.
Your financial advisor should be able to tell you approximately when your order
will be processed. It is the responsibility of your financial advisor to
forward your order to the transfer agent in a timely manner.
TRANSACTION PROCESSING. Orders for the purchase of shares by wire transfer will
normally be effective at the share price next computed after receipt of the
wire transfer of the amount to be invested. If a wire transfer purchase order
is received in good order before 12:00 p.m. Eastern time, it will normally
receive the dividend for that day.
Shareholders known to the fund may notify the Service Center in advance of
their wire transfer purchase by calling the Service Center prior to the 12:00
p.m. Eastern time
8
PROSPECTUS May 1, 2010 Investing in the Fund
cut-off time and providing the amount of the order. The investor will receive a
confirmation number for the trade. If the fund receives the wire transfer
before the close of the Federal Funds wire system, the trade will be entitled
to that day's dividend. If the fund does not receive the wire transfer by the
close of the Federal Funds wire system, the trade may not receive the dividend
for that day and, depending upon the circumstances, the trade may receive the
dividend for the following business day or may be canceled or rejected and, in
any case, the investor may be charged for any losses or fees that result, which
may be paid by deductions from their account or otherwise. The fund's
Distributor may refuse to allow any investor to trade with the fund in this
manner and may require that the wire transfer of purchase proceeds be received
before the trade is considered in good order.
Investments by check will be effective on the business day following receipt
and will earn dividends the following business day. If you pay for shares by
check and the check fails to clear, we have the right to cancel your order,
hold you liable or charge you or your account for any losses or fees the fund
or its agents have incurred.
Orders processed through dealers or other financial services firms via
Fund/SERV will be effected at the share price calculated on the trade day
(normally the date the order is received). Purchases processed via Fund/SERV
will begin earning dividends on the day the fund receives the payment
(typically the next business day). For redemptions processed via Fund/SERV, you
generally will receive dividends accrued up to, but not including, the business
day that payment for your shares is made.
When selling shares, shareholders generally receive dividends up to, but not
including, the business day following the day on which the shares were sold. To
sell shares, you must state whether you would like to receive the proceeds by
wire or check.
In order to receive proceeds by wire, contact the Service Center before 12:00
p.m. Eastern time. After you inform the Service Center of the amount of your
redemption, you will receive a trade confirmation number. If the fund receives
a sell request before 12:00 p.m. Eastern time and the request calls for
proceeds to be sent out by wire, the proceeds will normally be wired on the
same day. However, the shares sold will not earn that day's dividend.
As noted below, proceeds of a redemption may be delayed. The ability to receive
"same day" wire redemption proceeds can be affected by a variety of
circumstances including the time that the request is made, the level of
redemption requests and purchase orders and general market conditions. A
request for a same day wire that is received earlier in the day will be given
priority over a request received later in the day in the event that it is
necessary to limit the amount of same day wire redemptions.
SUB-MINIMUM BALANCES. The fund may close your account and send you the proceeds
if your balance falls below $2,000; we will give you 60 days' notice so you can
either increase your balance or close your account (this policy doesn't apply
to most retirement accounts or if you have an automatic investment plan).
CHECKWRITING enables you to sell shares of the fund by writing a check. Your
investment keeps earning dividends until your check clears. Please note that we
will not accept checks for less than $250. Please note that you should not
write checks for more than $5,000,000. Note as well that we can't honor any
check larger than your balance at the time the check is presented to us. It is
not a good idea to close out an account using a check because the account
balance could change between the time you write the check and the time it is
processed. Please keep in mind that if you make a purchase by check and that
check has not yet cleared, those funds will not be available for immediate
redemption.
REGULAR INVESTMENTS AND WITHDRAWALS enable you to set up a link between the
fund account and a bank account. Once this link is in place, you can move money
between the two with a phone call. You'll need to make sure your bank has
Automated Clearing House (ACH) services. Transactions take two to three days to
be completed.
THE FUND ACCEPTS AUTOMATED CLEARING HOUSE ("ACH") debit entries for accounts
that have elected the checkwriting redemption privilege. Upon receipt of an ACH
debit entry referencing your account number you authorize us to redeem shares
in your account to pay the entry to the third party originating the debit. Your
fund account statement will show all ACH debit entries in your account. IN CASE
OF ERRORS OR QUESTIONS ABOUT YOUR TRANSACTIONS OR PRE-AUTHORIZED TRANSFERS
please contact your financial advisor as soon as possible if you believe your
statement reflects an improper charge or if you need more information about an
ACH debit entry transaction. Your financial advisor must contact the
Shareholder Service Agent within sixty (60) days of the fund sending you the
first fund account statement on which an improper charge appears.
THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you currently have
shares in certificated form, you must include the share certificates properly
endorsed or accompanied by a duly executed stock power when exchanging or
redeeming shares. You may not exchange or redeem shares in certificate form by
telephone or via the Internet.
WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we don't
charge a fee to send or receive wires, it's possible that your bank may do so.
Wire transactions are generally completed within 24 hours. The fund can only
send wires of $1,000 or more and accept wires of $50 or more.
THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by a check drawn on a US
bank, a bank or Federal Funds wire transfer or an electronic bank transfer. The
fund
9
PROSPECTUS May 1, 2010 Investing in the Fund
does not accept third party checks. A third party check is a check made payable
to one or more parties and offered as payment to one or more other parties
(e.g., a check made payable to you that you offer as payment to someone else).
Checks should normally be payable to the fund or "Deutsche Asset Management"
and drawn by you or a financial institution on your behalf with your name or
account number included with the check. If you pay for shares by check and the
check fails to clear, we have the right to cancel your order, hold you liable
or charge you or your account for any losses or fees the fund or its agents
have incurred.
SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth of shares
or send proceeds to a third party or to a new address, you'll usually need to
place your order in writing and include a signature guarantee. However, if you
want money transferred electronically to a bank account that is already on file
with us, you don't need a signature guarantee. Also, generally you don't need a
signature guarantee for an exchange, although we may require one in certain
other circumstances.
A signature guarantee is simply a certification of your signature - a valuable
safeguard against fraud. You can get a signature guarantee from an eligible
guarantor institution, including commercial banks, savings and loans, trust
companies, credit unions, member firms of a national stock exchange or any
member or participant of an approved signature guarantor program. We require
stamps from members of a medallion signature guarantee program. A notarized
document cannot be accepted in lieu of a signature guarantee.
SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION ACCOUNTS may
require additional documentation. Please call DWS Investments (see phone
numbers on the back cover) or contact your financial advisor for more
information.
MONEY FROM SHARES YOU SELL is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are circumstances when it could be longer,
including, but not limited to, when you are selling shares you bought recently
by check or ACH (the funds will be placed under a 10 calendar day hold to
ensure good funds) or when unusual circumstances prompt the SEC to allow
further delays. Certain expedited redemption processes (e.g., redemption
proceeds by wire) may also be delayed or unavailable when you are selling
shares recently purchased or in the event of the closing of the Federal Reserve
wire payment system. The fund reserves the right to suspend or postpone
redemptions as permitted pursuant to Section 22(e) of the 1940 Act. Generally,
those circumstances are when 1) the New York Stock Exchange is closed other
than customary weekend or holiday closings; 2) the SEC determines that trading
on the New York Stock Exchange is restricted; 3) the SEC determines that an
emergency exists which makes the disposal of securities owned by the fund or
the fair determination of the value of the fund's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also be delayed in the event of a
non-routine closure of the Federal Reserve wire payment system. For additional
rights reserved by the fund, please see "Other rights we reserve."
SHORT-TERM TRADING. Since money market funds hold short-term instruments and
are intended to provide liquidity to shareholders, the Advisor does not monitor
or limit short-term or excessive trading activity in the fund and, accordingly,
the Board of the fund has not approved any policies and procedures designed to
limit this activity. However, the fund reserves the right to and may reject or
cancel a purchase or exchange order into the fund for any reason, including if,
in the opinion of the Advisor, there appears to be a pattern of short-term or
excessive trading by an investor in another DWS fund.
HOW THE FUND CALCULATES SHARE PRICE
To calculate net asset value, or NAV, each share class uses the following
equation:
TOTAL TOTAL TOTAL NUMBER OF
- / = NAV
( )
ASSETS LIABILITIES SHARES OUTSTANDING
The price at which you buy and sell shares is based on the NAV per share next
calculated after the order is received and accepted by the transfer agent.
IN VALUING SECURITIES, we typically use amortized cost (the method used by most
money market funds) to account for any premiums or discounts above or below the
face value of any securities the fund buys, and round the per share NAV to the
nearest whole cent.
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (the
"Exchange") is open. Normally, the fund calculates its share price once every
business day as of the close of regular trading on the Exchange (typically 4:00
p.m. Eastern time, but sometimes earlier, as in the case of scheduled half-day
trading or unscheduled suspensions of trading). In the event of scheduled
partial day trading or unscheduled suspensions of trading on the Exchange, the
calculation of share price shall be as of the close of trading on the Exchange.
In such instances, the latest time for receipt of wire purchase transactions
entitled to receive same day dividend treatment and for receipt of redemption
orders for same day wire transfer of proceeds will be the earlier of (a) 12:00
p.m. Eastern time or (b) the early closing time of the Exchange. The fund seeks
to maintain a stable $1.00 share price.
The fund may, but is not required to, accept certain types of purchase and
redemption orders (not including exchanges) on days that the Exchange is
closed, or beyond an Exchange early closing time (referred to as a "Limited
Trading Period") if: (a) the Federal Reserve system is open,
10
PROSPECTUS May 1, 2010 Investing in the Fund
(b) the primary trading markets for the fund's portfolio instruments are open
and (c) the Advisor believes there will be adequate liquidity in the short-term
markets. During any such Limited Trading Period, the fund will only accept
purchase orders by wire with advance telephone notification and telephone
redemption orders with proceeds to be sent by wire, ACH or check and will not
accept orders by any other means. (Automated Telephone Line orders are not
permitted.) If redemption proceeds are requested by ACH or check, the
transmission of the ACH payment or the mailing of the check, as the case may
be, will be delayed by at least one business day in comparison to normal
trading periods. Orders submitted by other means will be processed on the next
day that the Exchange is open. The calculation of share price will be as set
forth in the prospectus for normal trading days. Orders must be submitted by
the cut-off times for receipt of wire purchases entitled to that day's dividend
and for receipt of telephone redemption orders for same day wire transfer,
which will be the earlier of: (a) the times set forth in the prospectus for
normal trading days or (b) such earlier times that the fund determines based on
the criteria described above. If redemption proceeds are requested by ACH or
check, orders must be received prior to the calculation of share price. Please
call (877) 237-1131 or visit our Web site at www.dws-investments.com for
additional information about whether the fund will be open for business on a
particular day. Information concerning the intention of the fund to be open for
a Limited Trading Period will be available at least one business day prior to
the applicable day that the Exchange is closed or is closing early in the case
of scheduled closings and as soon as practical in the case of unscheduled
closings.
OTHER RIGHTS WE RESERVE
You should be aware that we may do any of the following:
o withdraw or suspend the offering of shares at any time
o withhold a portion of your distributions and redemption proceeds if we have
been notified by the IRS that you are subject to backup withholding or if
you fail to provide us with the correct taxpayer ID number and certain
certifications, including certification that you are not subject to backup
withholding
o reject a new account application if you don't provide any required or
requested identifying information, or for any other reason
o refuse, cancel, limit or rescind any purchase or exchange order, without
prior notice; freeze any account (meaning you will not be able to purchase
fund shares in your account); suspend account services; and/or
involuntarily redeem your account if we think that the account is being
used for fraudulent or illegal purposes; one or more of these actions will
be taken when, at our sole discretion, they are deemed to be in the fund's
best interests or when the fund is requested or compelled to do so by
governmental authority or by applicable law
o close and liquidate your account if we are unable to verify your identity,
or for other reasons; if we decide to close your account, your fund shares
will be redeemed at the net asset value per share next calculated after we
determine to close your account; you may recognize a gain or loss on the
redemption of your fund shares and you may incur a tax liability
o pay you for shares you sell by "redeeming in kind," that is, by giving you
securities (which typically will involve brokerage costs for you to
liquidate) rather than cash
o change, add or withdraw various services, fees and account policies (for
example, we may adjust the fund's investment minimums at any time)
UNDERSTANDING DISTRIBUTIONS AND TAXES
The fund intends to distribute to its shareholders virtually all of its net
earnings. The fund can earn money in two ways: by receiving interest, dividends
or other income from securities it holds and by selling securities for more
than it paid for them. (The fund's earnings are separate from any gains or
losses stemming from your own purchase and sale of shares.) The fund may not
always pay a dividend or distribution for a given period.
THE FUND'S INCOME DIVIDENDS ARE DECLARED DAILY AND PAID MONTHLY TO
SHAREHOLDERS. The fund may take into account capital gains and losses in its
daily dividend declarations. The fund may make additional distributions for tax
purposes if necessary.
Dividends or distributions declared and payable to shareholders of record in
the last quarter of a given calendar year are treated for federal income tax
purposes as if they were received on December 31 of that year, if such
dividends or distributions are actually paid in January of the following year.
The fund intends to distribute tax-exempt interest earned from securities as
exempt-interest dividends, which are excluded from gross income for regular
federal income tax purposes, but may be subject to alternative minimum tax
(AMT) and state and local income taxes. Exempt-interest dividends may be
properly designated as such only if, as anticipated, at least 50% of the value
of the assets of the fund is invested at the close of each quarter of its
taxable year in obligations of issuers the interest on which is excluded from
gross income for federal income tax purposes.
Individual shareholders who are residents of New York State will be able to
exclude for New York State personal income tax purposes the portion of any
exempt-interest dividend that is derived from interest on obligations of New
York State and its political subdivisions, as well as obligations of Puerto
Rico, the US Virgin Islands and Guam. Individual shareholders who are residents
of New York City will also be able to exclude such income for New York City
personal income tax purposes.
11
PROSPECTUS May 1, 2010 Investing in the Fund
A portion of the fund's dividends may be taxable if they consist of earnings
from investment in taxable securities. Capital gains distributions may also be
taxable.
YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You can have
them all automatically reinvested in fund shares (at NAV), all sent to you by
check or wire, have one type reinvested and the other sent to you by check or
have them invested in another fund. Tell us your preference on your
application. If you don't indicate a preference, your dividends and
distributions will all be reinvested.
Distributions are treated the same for federal income tax purposes whether you
receive them in cash or reinvest them in additional shares. For federal income
tax purposes, an exchange is treated the same as a sale.
Because the fund seeks to maintain a stable share price, you are unlikely to
have capital gains or losses when you sell fund shares.
YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION EVERY JANUARY.
These statements tell you the amount and the federal income tax classification
of any dividends or distributions you received.
If the fund's distributions exceed its current and accumulated earnings and
profits, the excess will be treated for federal income tax purposes as a return
of capital to the extent of your basis in your shares and thereafter as a
capital gain. A return of capital distribution reduces the basis of your
shares. As a result, even though the fund seeks to maintain a stable share
price, you may recognize a capital gain when you sell your shares if you have
received a return of capital distribution.
The above discussion summarizes certain federal income tax consequences for
shareholders who are US persons. If you are a non-US person, please consult
your own tax advisor with respect to the US tax consequences to you of an
investment in the fund. For more information, see "Taxes" in the Statement of
Additional Information.
12
PROSPECTUS May 1, 2010 Investing in the Fund
FINANCIAL HIGHLIGHTS
The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).
NY TAX FREE MONEY FUND - TAX-EXEMPT NEW YORK MONEY MARKET FUND
YEARS ENDED DECEMBER 31, 2009 2008 2007(A)
--------------------------------------------------- --------------- ---------- -----------------
SELECTED PER SHARE DATA
--------------------------------------------------- -
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------- ------- ------- --------
Income from investment operations:
Net investment income .001 .016 .021
--------------------------------------------------- -------- -------- ---------
Net realized gain (loss)(b) - - -
--------------------------------------------------- -------- -------- ---------
TOTAL FROM INVESTMENT OPERATIONS .001 .016 .021
--------------------------------------------------- -------- -------- ---------
Less distributions from:
Net investment income ( .001) ( .016) ( .021)
--------------------------------------------------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------- -------- -------- ---------
Total Return (%) .13 (c) 1.57 2.16 (**)
--------------------------------------------------- -------- -------- ---------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------- --------
Net assets, end of period ($ millions) 28 183 112
---------------------------------------------------- -------- -------- ---------
Ratio of expenses before expense reductions (%) .98 .89 .91 (*)
---------------------------------------------------- -------- -------- ---------
Ratio of expenses after expense reductions (%) .58 .89 .91*
---------------------------------------------------- -------- -------- ---------
Ratio of net investment income (%) .14 1.51 2.71 (*)
---------------------------------------------------- -------- -------- ---------
(a) For the period from March 22, 2007 (commencement of operations of
Tax-Exempt New York Money Market Fund) to December 31, 2007.
(b) Amount is less than $.0005 per share.
(c) Total return would have been lower had certain expenses not been
reduced.
(*) Annualized
(**) Not annualized
13
PROSPECTUS May 1, 2010 Financial Highlights
APPENDIX
HYPOTHETICAL EXPENSE SUMMARY
Using the annual fund operating expense ratios presented in the fee tables in
the fund prospectus, the Hypothetical Expense Summary shows the estimated fees
and expenses, in actual dollars, that would be charged on a hypothetical
investment of $10,000 in the fund held for the next 10 years and the impact of
such fees and expenses on fund returns for each year and cumulatively, assuming
a 5% return for each year. The historical rate of return for the fund may be
higher or lower than 5% and, for money market funds, is typically less than 5%.
The tables also assume that all dividends and distributions are reinvested and
that, where applicable, Class B shares convert to Class A shares after six
years. The annual fund expense ratios shown are net of any contractual fee
waivers or expense reimbursements, if any, for the period of the contractual
commitment. The tables reflect the maximum initial sales charge, if any, but do
not reflect any contingent deferred sales charge or redemption fees, if any,
which may be payable upon redemption. If contingent deferred sales charges or
redemption fees were shown, the "Hypothetical Year-End Balance After Fees and
Expenses" amounts shown would be lower and the "Annual Fees and Expenses"
amounts shown would be higher. Also, please note that if you are investing
through a third party provider, that provider may have fees and expenses
separate from those of the fund that are not reflected here. Mutual fund fees
and expenses fluctuate over time and actual expenses may be higher or lower
than those shown.
The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the fund's prospectus to
consider the investment objectives, risks, expenses and charges of the fund
prior to investing.
NY TAX FREE MONEY FUND - TAX-EXEMPT NEW YORK MONEY MARKET FUND
MAXIMUM INITIAL HYPOTHETICAL ASSUMED RATE
SALES CHARGE: INVESTMENT: OF RETURN:
0.00% $10,000 5%
--------------- ------------------------- -----------------------------
HYPOTHETICAL
CUMULATIVE ANNUAL CUMULATIVE YEAR-END
RETURN BEFORE FUND RETURN AFTER BALANCE AFTER ANNUAL FEES
FEES AND EXPENSE FEES AND FEES AND AND
YEAR EXPENSES RATIOS EXPENSES EXPENSES EXPENSES
------ --------------- --------- -------------- --------------- ------------
1 5.00% 0.95% 4.05% $ 10,405.00 $ 96.92
--- ----- ---- ----- ----------- ----------
2 10.25% 0.95% 8.26% $ 10,826.40 $ 100.85
--- ----- ---- ----- ----------- ----------
3 15.76% 0.95% 12.65% $ 11,264.87 $ 104.93
--- ----- ---- ----- ----------- ----------
4 21.55% 0.95% 17.21% $ 11,721.10 $ 109.18
--- ----- ---- ----- ----------- ----------
5 27.63% 0.95% 21.96% $ 12,195.80 $ 113.61
--- ----- ---- ----- ----------- ----------
6 34.01% 0.95% 26.90% $ 12,689.73 $ 118.21
--- ----- ---- ----- ----------- ----------
7 40.71% 0.95% 32.04% $ 13,203.67 $ 122.99
--- ----- ---- ----- ----------- ----------
8 47.75% 0.95% 37.38% $ 13,738.42 $ 127.97
--- ----- ---- ----- ----------- ----------
9 55.13% 0.95% 42.95% $ 14,294.82 $ 133.16
--- ----- ---- ----- ----------- ----------
10 62.89% 0.95% 48.74% $ 14,873.76 $ 138.55
--- ----- ---- ----- ----------- ----------
TOTAL $ 1,166.37
--- ----------
14
PROSPECTUS May 1, 2010 Appendix
TO GET MORE INFORMATION
SHAREHOLDER REPORTS. These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and its financial statements. Shareholders get these reports
automatically.
STATEMENT OF ADDITIONAL INFORMATION (SAI). This tells you more about the fund's
features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
For a free copy of any of these documents or to request other information about
the fund, contact DWS Investments at the phone number or address listed below.
SAIs and shareholder reports are also available through the DWS Investments Web
site at www.dws-investments.com. These documents and other information about
the fund are available from the EDGAR Database on the SEC's Internet site at
www.sec.gov. If you like, you may obtain copies of this information, after
paying a copying fee, by e-mailing a request to publicinfo@sec.gov or by
writing the SEC at the address listed below.
You can also review and copy these documents and other information about the
fund, including the fund's SAI, 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 or (202) 551-8090.
In order to reduce the amount of mail you receive and to help reduce expenses,
we generally send a single copy of any shareholder report and prospectus to
each household. If you do not want the mailing of these documents to be
combined with those for other members of your household, please contact your
financial advisor or call the number provided.
CONTACT INFORMATION
DWS INVESTMENTS PO Box 219669
Kansas City, MO
64121-9669
www.dws-investments.com
(800) 730-1313
SEC 100 F Street, N.E.
Washington, D.C. 20549-1520
WWW.SEC.GOV
(800) SEC-0330
DISTRIBUTOR DWS Investments Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
(800) 621-1148
SEC FILE NUMBER DWS Advisor Funds
NY Tax Free Money Fund
811-04760
RESHAPING INVESTING. [DWS INVESTMENTS LOGO]
Deutsche Bank Group
(05/01/10) TENY-1
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 2010
DWS COMMUNICATIONS FUND
DWS COMMUNICATIONS FUND
CLASS (Ticker): A (TISHX ) B (FTEBX) C (FTICX) INST (FLICX)
DWS ADVISOR FUNDS
DWS RREEF REAL ESTATE SECURITIES FUND
CLASS (Ticker): A (RRRAX) B (RRRBX) C (RRRCX) R (RRRSX) INST (RRRRX) S (RRREX)
This combined Statement of Additional Information ("SAI") is not a prospectus
and should be read in conjunction with the prospectus for each fund dated May
1, 2010, as supplemented from time to time, a copy of which may be obtained
without charge by calling (800) 621-1048 for Classes A, B, C and R, (800)
730-1313 for Institutional Class and (800) 728-3337 for Class S; or from the
firm from which this SAI was obtained. This SAI is incorporated by reference
into the prospectus.
Portions of the Annual Report to Shareholders of each fund are incorporated
herein by reference, as specified herein, and are hereby deemed to be part of
this SAI. Reports to Shareholders may also be obtained without charge by
calling the number provided in the preceding paragraph.
This SAI is divided into two Parts - Part I and Part II. Part I contains
information that is specific to each fund, while Part II contains information
that generally applies to each of the funds in the DWS funds.
Class B shares are closed to new investment.
[Deutsche Asset Management LOGO]
A Member of the Deutsche Bank Group
STATEMENT OF ADDITIONAL INFORMATION (SAI) - PART I
PAGE
Part I................................................................................... I-1
Definitions............................................................................ I-1
Fund Organization...................................................................... I-1
Management of Each Fund................................................................ I-5
Sales Charges and Distribution Plan Payments........................................... I-5
Portfolio Transactions and Brokerage Commissions....................................... I-5
Investments............................................................................ I-5
Investment Restrictions................................................................ I-5
Taxes.................................................................................. I-8
Independent Registered Public Accounting Firm, Reports to Shareholders and Financial I-8
Statements
Additional Information................................................................. I-8
Part I: Appendix I-A - Board Member Share Ownership and Control........................ I-9
Part I: Appendix I-B - Board Committees and Meetings................................... I-14
Part I: Appendix I-C - Board Member Compensation....................................... I-18
Part I: Appendix I-D - Portfolio Management............................................ I-20
Part I: Appendix I-E - Affiliated Service Provider Compensation........................ I-23
Part I: Appendix I-F - Sales Charges................................................... I-25
Part I: Appendix I-G - Distribution Plan Payments...................................... I-26
Part I: Appendix I-H - Portfolio Transactions and Brokerage Commissions................ I-27
Part I: Appendix I-I - Investment Practices and Techniques............................. I-29
Part I: Appendix I-J - Additional Information.......................................... I-30
Part II.................................................................................. II-1
PART I
DEFINITIONS
"1934 Act" - the Securities Exchange Act of 1934, as amended
"1940 Act" - the Investment Company Act of 1940, as amended
"Code" - the Internal Revenue Code of 1986, as amended
"DeAM" - Deutsche Asset Management
"DIMA" or "Advisor" or "Administrator" - Deutsche Investment Management
Americas Inc., 345 Park Avenue, New York, New York 10154
"Subadvisor" - RREEF America L.L.C. for DWS RREEF Real Estate Securities Fund,
875 N. Michigan Avenue, Chicago, Illinois 60611
"DIDI" or "Distributor" - DWS Investments Distributors, Inc., 222 South
Riverside Plaza, Chicago, Illinois 60606
"DISC" or "Transfer Agent" - DWS Investments Service Company, 210 W. 10th
Street, Kansas City, Missouri 64105-1614
"DIFA" - DWS Investments Fund Accounting Corporation, One Beacon Street,
Boston, Massachusetts 02108 (formerly Scudder Fund Accounting Corporation)
"DWS funds" - The US registered investment companies advised by DIMA
"Board Members" - Members of the Board of Directors/
Trustees of the Corporation/Trust
"Board" - Board of Directors/Trustees of the Corporation/
Trust
"Independent Board Members"- Board Members who are not interested persons (as
defined in the 1940 Act)
"fund" or "series" - DWS Communications Fund and/or DWS RREEF Real Estate
Securities Fund as the context may require
"Custodian" - State Street Bank and Trust Company, Lafayette Corporate Center,
2 Avenue De Lafayette, Boston, MA 02111
"Fund Legal Counsel" - For DWS Communications Fund: Ropes & Gray LLP, One
International Place, Boston, MA 02110-2624. For DWS RREEF Real Estate
Securities Fund: Vedder Price P.C., 222 North LaSalle Street, Chicago, IL 60601
"Trustee/Director Legal Counsel" - Ropes & Gray LLP, One International Place,
Boston, MA 02110-2624
"Corporation" or "Trust" - DWS Communications Fund, Inc. and DWS Advisor Funds,
respectively
"NRSRO"- A nationally recognized statistical rating organization
"S&P" - Standards & Poor's Ratings Group, an NRSRO
"Moody's" - Moody's Investors Service, Inc., an NRSRO
"Fitch" - Fitch Investors Service, Inc., an NRSRO
FUND ORGANIZATION
DWS Communications Fund is a series of DWS Communications Fund, Inc., a
Maryland corporation organized on October 18, 1983. On May 20, 1985, the
Corporation reorganized as a Massachusetts business trust and on January 19,
1989 it reorganized as a Maryland corporation pursuant to an Agreement and Plan
of Reorganization and Liquidation approved by shareholders on December 6, 1988.
On February 6, 2006, Scudder Flag Investors Communications Fund, Inc. was
renamed DWS Communications Fund, Inc. and Scudder Flag Investors Communications
Fund was renamed DWS Communications Fund.
The Corporation's charter authorizes the issuance of shares of capital stock,
each with a par value of $0.001, which may be divided into multiple series (or
funds). A fund may be further divided into multiple share classes, which may
bear different expenses.
The Corporation is governed by Amended and Restated Articles of Incorporation
that were approved by shareholders in the second quarter of 2006, as may be
further amended from time to time (the "Articles of Incorporation"). All shares
issued and outstanding are fully paid and non-assessable, transferable, have no
pre-emptive rights (except as may be determined by the Board of
I-1
Directors) or conversion rights (except as described below) and are redeemable
as described in the SAI and in each fund's prospectus. Each share has equal
rights with each other share of the same class of a fund as to voting,
dividends, exchanges and liquidation. Shareholders are entitled to one vote for
each share held and fractional votes for fractional shares held.
The Board of Directors may determine that shares of a fund or a class of a fund
shall be automatically converted into shares of another fund of the Corporation
or of another class of the same or another fund based on the relative net
assets of such fund or class at the time of conversion. The Board of Directors
may also provide that the holders of shares of a fund or a class of a fund
shall have the right to convert or exchange their shares into shares of one or
more other funds or classes on terms established by the Board of Directors.
Each share of the Corporation may be subject to such sales loads or charges,
expenses and fees, account size requirements, and other rights and provisions,
which may be the same or different from any other share of the Corporation or
any other share of any fund or class of a fund (including shares of the same
fund or class as the share), as the Board of Directors may establish or change
from time to time and to the extent permitted under the 1940 Act.
The Corporation is not required to hold an annual meeting of shareholders in
any year in which the election of Directors is not required by the 1940 Act. If
a meeting of shareholders of the Corporation is required by the 1940 Act to
take action on the election of Directors, then an annual meeting shall be held
to elect Directors and take such other action as may come before the meeting.
Special meetings of the shareholders of the Corporation, or of the shareholders
of one or more funds or classes thereof, for any purpose or purposes, may be
called at any time by the Board of Directors or by the President, and shall be
called by the President or Secretary at the request in writing of shareholders
entitled to cast a majority of the votes entitled to be cast at the meeting.
Except as provided in the 1940 Act, the presence in person or by proxy of the
holders of one-third of the shares entitled to vote at a meeting shall
constitute a quorum for the transaction of business at meetings of shareholders
of the Corporation or of a fund or class.
On any matter submitted to a vote of shareholders, all shares of the
Corporation entitled to vote shall be voted in the aggregate as a single class
without regard to series or classes of shares, provided, however, that (a) when
applicable law requires that one or more series or classes vote separately,
such series or classes shall vote separately and, subject to (b) below, all
other series or classes shall vote in the aggregate; and (b) when the Board of
Directors determines that a matter does not affect the interests of a
particular series or class, such series or class shall not be entitled to any
vote and only the shares of the affected series or classes shall be entitled to
vote.
Notwithstanding any provision of Maryland corporate law requiring authorization
of any action by a greater proportion than a majority of the total number of
shares entitled to vote on a matter, such action shall be effective if
authorized by the majority vote of the outstanding shares entitled to vote.
Subject to the requirements of applicable law and any procedures adopted by the
Board of Directors from time to time, the holders of shares of the Corporation
or any one or more series or classes thereof may take action or consent to any
action by delivering a consent, in writing or by electronic transmission, of
the holders entitled to cast not less than the minimum number of votes that
would be necessary to authorize or take the action at a formal meeting.
The Articles of Incorporation provide that the Board of Directors may, in its
discretion, establish minimum investment amounts for shareholder accounts,
impose fees on accounts that do not exceed a minimum investment amount and
involuntarily redeem shares in any such account in payment of such fees. The
Board of Directors, in its sole discretion, also may cause the Corporation to
redeem all of the shares of the Corporation or one or more series or classes
held by any shareholder for any reason, to the extent permissible by the 1940
Act, including (a) if the shareholder owns shares having an aggregate net asset
value of less than a specified minimum amount, (b) if the shareholder's
ownership of shares would disqualify a series from being a regulated investment
company, (c) upon a shareholder's failure to provide sufficient identification
to permit the Corporation to verify the shareholder's identity, (d) upon a
shareholder's failure to pay for shares or meet or maintain the qualifications
for ownership of a particular series or class, (e) if the Board of Directors
determines (or pursuant to policies established by the Board of Directors it is
determined) that share ownership by a shareholder is not in the best interests
of the remaining shareholders, (f) when the Corporation is requested or
compelled to do so by governmental authority or applicable law, or (g) upon a
shareholder's failure to comply with a request for information with respect to
the direct or indirect ownership
I-2
of shares of the Corporation. By redeeming shares the Corporation may terminate
a fund or any class without shareholder approval, and the Corporation may
suspend the right of shareholders to require the Corporation to redeem shares
to the extent permissible under the 1940 Act.
Except as otherwise permitted by the Articles of Incorporation, upon
liquidation or termination of a fund or class, shareholders of such fund or
class of such fund shall be entitled to receive, pro rata in proportion to the
number of shares of such fund or class held by each of them, a share of the net
assets of such fund or class, and the holders of shares of any other particular
fund or class shall not be entitled to any such distribution, provided,
however, that the composition of any such payment (e.g., cash, securities
and/or other assets) to any shareholder shall be determined by the Corporation
in its sole discretion, and may be different among shareholders (including
differences among shareholders in the same fund or class).
DWS RREEF Real Estate Securities Fund is a series of DWS Advisor Funds, a
Massachusetts business trust established under an Agreement and Declaration of
Trust dated July 21, 1986, as amended from time to time. On February 6, 2006,
Scudder Advisor Funds was renamed DWS Advisor Funds. On February 6, 2006,
Scudder RREEF Real Estate Securities Fund was renamed DWS RREEF Real Estate
Securities Fund. On July 10, 2006, the predecessor of DWS RREEF Real Estate
Securities Fund transferred all of its assets and liabilities from DWS RREEF
Securities Trust, a Delaware business trust, to DWS Advisor Funds, while
retaining the same fund name.
The Trust is governed by an Amended and Restated Declaration of Trust dated
June 2, 2008, as may be further amended from time to time (the "Declaration of
Trust"). The Declaration of Trust was last approved by shareholders in 2006.
The Board has the authority to divide the shares of the Trust into multiple
funds by establishing and designating two or more series of the Trust. The
Board also has the authority to establish and designate two or more classes of
shares of the Trust, or of any series thereof, with variations in the relative
rights and preferences between the classes as determined by the Board; provided
that all shares of a class shall be identical with each other and with the
shares of each other class of the same series except for such variations
between the classes, including bearing different expenses, as may be authorized
by the Board and not prohibited by the 1940 Act and the rules and regulations
thereunder. All shares issued and outstanding are transferable, have no
pre-emptive or conversion rights (except as may be determined by the Board) and
are redeemable as described in the SAI and in the prospectus. Each share has
equal rights with each other share of the same class of the fund as to voting,
dividends, exchanges, conversion features and liquidation. Shareholders are
entitled to one vote for each full share held and fractional votes for
fractional shares held.
A fund generally is not required to hold meetings of its shareholders. Under
the Declaration of Trust, shareholders only have the power to vote in
connection with the following matters and only to the extent and as provided in
the Declaration of Trust and as required by applicable law: (a) the election,
re-election or removal of one or more Trustees if a meeting of shareholders is
called by or at the direction of the Board for such purpose(s), provided that
the Board shall promptly call a meeting of shareholders for the purpose of
voting upon the question of removal of one or more Trustees as a result of a
request in writing by the holders of not less than ten percent of the
outstanding shares of the Trust; (b) the termination of the Trust or a fund if,
in either case, the Board submits the matter to a vote of shareholders; (c) any
amendment of the Declaration of Trust that (i) would affect the rights of
shareholders to vote under the Declaration of Trust, (ii) requires shareholder
approval under applicable law or (iii) the Board submits to a vote of
shareholders; and (d) such additional matters as may be required by law or as
the Board may determine to be necessary or desirable. Shareholders also vote
upon changes in fundamental policies or restrictions.
The Declaration of Trust provides that shareholder meeting quorum requirements
shall be established in the By-laws. The By-laws of the Trust currently provide
that the presence in person or by proxy of the holders of thirty percent of the
shares entitled to vote at a meeting shall constitute a quorum for the
transaction of business at meetings of shareholders of the Trust (or of an
individual series or class if required to vote separately).
On any matter submitted to a vote of shareholders, all shares of the Trust
entitled to vote shall, except as otherwise provided in the By-laws, be voted
in the aggregate as a single class without regard to series or classes of
shares, except (a) when required by applicable law or when the Board has
determined that the matter affects one or more series or classes of shares
materially differently, shares shall be voted by individual series or class;
and (b) when the Board has determined
I-3
that the matter affects only the interests of one or more series or classes,
only shareholders of such series or classes shall be entitled to vote thereon.
The Declaration of Trust provides that the Board may, in its discretion,
establish minimum investment amounts for shareholder accounts, impose fees on
accounts that do not exceed a minimum investment amount and involuntarily
redeem shares in any such account in payment of such fees. The Board, in its
sole discretion, also may cause the Trust to redeem all of the shares of the
Trust or one or more series or classes held by any shareholder for any reason,
to the extent permissible by the 1940 Act, including (a) if the shareholder
owns shares having an aggregate net asset value of less than a specified
minimum amount, (b) if a particular shareholder's ownership of shares would
disqualify a series from being a regulated investment company, (c) upon a
shareholder's failure to provide sufficient identification to permit the Trust
to verify the shareholder's identity, (d) upon a shareholder's failure to pay
for shares or meet or maintain the qualifications for ownership of a particular
class or series of shares, (e) if the Board determines (or pursuant to policies
established by the Board it is determined) that share ownership by a particular
shareholder is not in the best interests of remaining shareholders, (f) when a
fund is requested or compelled to do so by governmental authority or applicable
law and (g) upon a shareholder's failure to comply with a request for
information with respect to the direct or indirect ownership of shares or other
securities of the Trust. The Declaration of Trust also authorizes the Board to
terminate a fund or any class without shareholder approval, and the Trust may
suspend the right of shareholders to require the Trust to redeem shares to the
extent permissible under the 1940 Act.
The Declaration of Trust provides that, except as otherwise required by
applicable law, the Board may authorize the Trust or any series or class
thereof to merge, reorganize or consolidate with any corporation, association,
trust or series thereof (including another series or class of the Trust) or
other entity (in each case, the "Surviving Entity") or the Board may sell,
lease or exchange all or substantially all of the Trust property (or all or
substantially all of the Trust property allocated or belonging to a particular
series or class) including its good will to any Surviving Entity, upon such
terms and conditions and for such consideration as authorized by the Board.
Such transactions may be effected through share-for-share exchanges, transfers
or sales of assets, in-kind redemptions and purchases, exchange offers or any
other method approved by the Board. The Board shall provide notice to affected
shareholders of each such transaction. The authority of the Board with respect
to the merger, reorganization or consolidation of any class of the Trust is in
addition to the authority of the Board to combine two or more classes of a
series into a single class.
Upon the termination of the Trust or any series or class, after paying or
adequately providing for the payment of all liabilities which may include the
establishment of a liquidating trust or similar vehicle, and upon receipt of
such releases, indemnities and refunding agreements as they deem necessary for
their protection, the Board may distribute the remaining Trust property or
property of the series or class, in cash or in kind or partly each, to the
shareholders of the Trust or the series or class involved, ratably according to
the number of shares of the Trust or such series or class held by the several
shareholders of the Trust or such series or class on the date of termination,
except to the extent otherwise required or permitted by the preferences and
special or relative rights and privileges of any classes of shares of a series
involved, provided that any distribution to the shareholders of a particular
class of shares shall be made to such shareholders pro rata in proportion to
the number of shares of such class held by each of them. The composition of any
such distribution (e.g., cash, securities or other assets) shall be determined
by the Trust in its sole discretion, and may be different among shareholders
(including differences among shareholders in the same series or class).
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
a fund or a fund's trustees. Moreover, the Declaration of Trust provides for
indemnification out of fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the fund and the fund
may be covered by insurance which the Board considers adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which a
disclaimer is inoperative and a fund itself is unable to meet its obligations.
I-4
MANAGEMENT OF EACH FUND
BOARD MEMBERS AND OFFICERS' IDENTIFICATION AND BACKGROUND
The identification and background of the Board Members and officers are set
forth in PART II - APPENDIX II-A.
BOARD COMMITTEES AND COMPENSATION
Compensation paid to the Independent Board Members, for certain specified
periods, as well as information regarding the committees of the Board, is set
forth in PART I - APPENDIX I-B and PART I - APPENDIX I-C.
BOARD MEMBER SHARE OWNERSHIP AND CONTROL PERSONS
Information concerning the ownership of fund shares by Board Members and
officers, as a group, as well as the dollar range value of each Board Member's
share ownership in each fund and, on an aggregate basis, in all DWS funds
overseen, by investors who control the fund, if any, and by investors who own
5% or more of any class of fund shares, if any, is set forth in PART I -
APPENDIX I-A.
PORTFOLIO MANAGEMENT
Information regarding each fund's portfolio manager(s), including other
accounts managed, compensation, ownership of fund shares and possible conflicts
of interest, is set forth in PART I - APPENDIX I-D and PART II - APPENDIX II-B.
This section does not apply to money market funds.
AFFILIATED SERVICE PROVIDER COMPENSATION
Compensation paid by each fund to its affiliated service providers for various
services including investment management, administrative, transfer agency, and,
for certain funds, fund accounting services, is set forth in PART I - APPENDIX
I-E. For information regarding payments made to DIDI, see PART I - APPENDIX
I-F. Fee rates for services of the above referenced affiliated service
providers are included in PART II - APPENDIX II-C.
SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
SALES CHARGES
Sales charges paid in connection with the purchase and sale of fund shares for
the three most recent fiscal years are set forth in PART I - APPENDIX I-F. This
information is not applicable to a fund/class that does not impose sales
charges.
DISTRIBUTION PLAN PAYMENTS
Payments made by each fund for the most recent fiscal year under each fund's
Rule 12b-1 Plans are set forth in PART I - APPENDIX I-G. This information is
not applicable to a fund/class that does not incur expenses paid in connection
with Rule 12b-1 Plans.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
PORTFOLIO TURNOVER
The portfolio turnover rates for the two most recent fiscal years are set forth
in PART I - APPENDIX I-H. This section does not apply to money market funds or
to a new fund that has not completed a fiscal reporting period.
BROKERAGE COMMISSIONS
Total brokerage commissions paid by each fund for the three most recent fiscal
years are set forth in PART I - APPENDIX I-H.
Each fund's policy with respect to portfolio transactions and brokerage is set
forth under "Portfolio Transactions" in Part II of this SAI.
INVESTMENTS
GENERAL INVESTMENT PRACTICES AND TECHNIQUES
PART I - APPENDIX I-I includes a list of the investment practices and
techniques which each fund may employ in pursuing its investment objective.
PART II - APPENDIX II-G includes a description of these investment practices
and techniques as well as the associated risks.
INVESTMENT RESTRICTIONS
Unless otherwise stated, the policies below apply to each fund.
I-5
Except as otherwise indicated, each fund's investment objective and policies
are not fundamental and may be changed without a vote of shareholders. There
can be no assurance that each fund's investment objective will be met.
Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, a fund.
Each fund has elected to be classified as a non-diversified series of an
open-end management investment company. A non-diversified fund may invest a
greater proportion of its assets in the obligations of a small number of
issuers, and may be subject to greater risk and substantial losses as a result
of changes in the financial condition or the market's assessment of the
issuers.
Unless specified to the contrary, the following fundamental policies may not be
changed without the approval of a majority of the outstanding voting securities
of a fund which, under the 1940 Act and the rules thereunder and as used in
this SAI, means the lesser of (1) 67% or more of the voting securities present
at such meeting, if the holders of more than 50% of the outstanding voting
securities of a fund are present or represented by proxy, or (2) more than 50%
of the outstanding voting securities of a fund.
As a matter of fundamental policy, a fund may not do any of the following:
(1) borrow money, except as permitted under the 1940 Act, and as interpreted
or modified by regulatory authority having jurisdiction, from time to
time.
(2) issue senior securities, except as permitted under the 1940 Act, and as
interpreted or modified by regulatory authority having jurisdiction,
from time to time.
(3) purchase or sell commodities, except as permitted by the 1940 Act, and
as interpreted or modified by the regulatory authority having
jurisdiction, from time to time.
(4) engage in the business of underwriting securities issued by others,
except to the extent that the fund may be deemed to be an underwriter in
connection with the disposition of portfolio securities.
(5) purchase or sell real estate, which term does not include securities of
companies which deal in real estate or mortgages or investments secured
by real estate or interests therein, except that the fund reserves
freedom of action to hold and to sell real estate acquired as a result
of the fund's ownership of securities.
(6) make loans except as permitted under the 1940 Act, and as interpreted or
modified by regulatory authority having jurisdiction, from time to time.
(7) (for DWS Communications Fund only) invest less than 65% of its total
assets in the communications field, except as described in the
prospectus, (otherwise the fund will not concentrate more than 25% of
its total assets in securities of issuers in any industry).
(8) (for DWS RREEF Real Estate Securities Fund only) invest 25% or more of
its total assets in securities of companies principally engaged in any
one industry, except that the fund may invest without limitation in
securities of companies engaged principally in the real estate industry.
OTHER INVESTMENT POLICIES. The Board has adopted certain non-fundamental
policies and restrictions which are observed in the conduct of a fund's
affairs. They differ from fundamental investment policies in that they may be
changed or amended by action of the Board without requiring prior notice to, or
approval of, the shareholders.
As a matter of non-fundamental policy:
(1) the fund may not purchase illiquid securities, including time deposits
and repurchase agreements maturing in more than seven days, if, as a
result, more than 15% of the fund's net assets would be invested in such
securities.
(2) the fund may not acquire securities of registered open-end investment
companies or registered unit investment trusts in reliance on Sections
12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
(3) the fund may not acquire securities of other investment companies,
except as permitted by the 1940 Act and the rules, regulations and any
applicable exemptive order issued thereunder.
(4) the fund may not purchase warrants if as a result, such securities,
taken at the lower of cost or market
I-6
value would represent more than 5% of the value of the fund's total
assets (for this purpose, warrants acquired in units or attached to
securities will be deemed to have no value).
(5) (for DWS Communications Fund only) up to 10% of the fund's total assets
(measured at the time of investment) may be invested in lower quality
debt obligations (securities rated BB or lower by S&P or Ba or lower by
Moody's and unrated securities determined to be of comparable quality by
the Adviser). Securities that were investment grade at the time of
purchase but that were subsequently downgraded to BB/BA or lower will be
included in the 10% category. If such a downgrade causes the 10% limit
to be exceeded, the fund will be precluded from investing further in
non-convertible securities that are below investment-grade.
(6) (for DWS RREEF Real Estate Securities Fund only) the fund's investments
in convertible debt securities and other high-yield/high-risk,
non-convertible debt securities rated below investment-grade will
comprise less than 20% of the fund's net assets.
(7) (for DWS RREEF Real Estate Securities Fund only) the fund will limit its
holdings of convertible debt securities to those that, at the time of
purchase, are rated at least B- by S&P or B3 by Moody's, or, if not
rated by S&P or Moody's, are of equivalent investment quality as
determined by the Advisor.
(8) (for DWS RREEF Real Estate Securities Fund only) the fund may invest up
to 5% of its assets in high-yield/high-risk securities.
(9) (for DWS RREEF Real Estate Securities Fund only) the fund will limit
repurchase agreement transactions to securities issued by the US
government and its agencies and instrumentalities and will enter into
such transactions with those banks and securities dealers who are deemed
creditworthy pursuant to criteria adopted by the Board or its designee.
(10) (for DWS Communications Fund only) the fund will not sell put options
if, as a result, more than 50% of the fund's total assets would be
required to be segregated to cover its potential obligations under such
put options other than those with respect to futures and options
thereon.
(11) (for DWS Communications Fund only) the fund may write options contracts
on its securities up to 20% of the value of its net assets at the time
such options are written.
(12) (for DWS Communications Fund only) call options may be purchased by the
fund, but only to terminate an obligation as a writer of a call option.
(13) (for DWS Communications Fund only) only call options that are traded on
a national securities exchange will be written.
(14) (for DWS Communications Fund only) the fund will not sell the securities
against which options have been written (uncover the options) until
after the option period has expired or the closing purchase has been
executed.
(15) (for DWS Communications Fund only) the fund generally will not enter
into a transaction to hedge currency exposure to an extent greater,
after netting all transactions intended wholly or partially to offset
other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio
that are denominated or generally quoted in or currently convertible
into such currency, other than with respect to proxy hedging or cross
hedging.
(16) (for DWS Communications Fund only) the fund will not sell interest rate
caps or floors where it does not own securities or other instruments
providing the income stream the fund may be obligated to pay.
(17) (for DWS RREEF Real Estate Securities Fund only) the fund may enter into
futures contracts, and write and buy put and call options relating to
futures contracts. The fund may not, however, enter into leveraged
futures transactions if it would be possible for the fund to lose more
money than it invested.
(18) (DWS RREEF Real Estate Securities Fund only) the fund may not invest in
a derivative security unless the reference index or the instrument to
which it relates is an eligible investment for the fund.
(19) (DWS RREEF Real Estate Securities Fund only) the fund will limit futures
contracts entered into on behalf of the fund to those traded on national
futures exchanges and for which there appears to be a liquid secondary
market.
I-7
For purposes of non-fundamental policy (1), and for so long as it remains a
position of the SEC, fixed time deposits maturing in more than seven days that
cannot be traded on a secondary market and participation interests in loans
will be treated as illiquid. Restricted securities (including commercial paper
issued pursuant to Section 4(2) of the Securities Act of 1933) that the Board
has determined to be readily marketable will not be deemed to be illiquid for
purposes of non-fundamental policy (1).
TAXES
Important information concerning the tax consequences of an investment in each
fund is contained in PART II - APPENDIX II-H.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, REPORTS TO SHAREHOLDERS AND
FINANCIAL STATEMENTS
The financial highlights of each fund included in the prospectus and the
financial statements incorporated by reference into this SAI have been so
included or incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, 125 High Street, Boston, MA 02110.
PricewaterhouseCoopers LLP is an independent registered public accounting firm.
The report is given on the authority of said firm as experts in auditing and
accounting. The accounting firm audits the financial statements of each fund
and provides other audit, tax and related services. Shareholders will receive
annual audited financial statements and semi-annual unaudited financial
statements.
The financial statements, together with the report of the Independent
Registered Public Accounting Firm, Financial Highlights and notes to financial
statements in the Annual Report to the Shareholders of each fund, dated
December 31, 2009 for DWS Communications Fund (SEC File No. 811-03883) and DWS
RREEF Real Estate Securities Fund (SEC File No. 811-04760), are incorporated
herein by reference and are hereby deemed to be a part of this combined SAI.
ADDITIONAL INFORMATION
For information on CUSIP numbers and fund fiscal year end information, see PART
I - APPENDIX I-J.
I-8
PART I: APPENDIX I-A - BOARD MEMBER SHARE OWNERSHIP AND CONTROL
BOARD MEMBER SHARE OWNERSHIP IN EACH FUND
The following tables show the dollar range of equity securities beneficially
owned by each Board Member in each fund and in DWS funds as of December 31,
2009.
DOLLAR RANGE OF BENEFICIAL OWNERSHIP/(1)/
BOARD MEMBER DWS COMMUNICATIONS FUND DWS RREEF REAL ESTATE SECURITIES FUND
INDEPENDENT BOARD MEMBER:
John W. Ballantine None None
Henry P. Becton, Jr. None None
Dawn-Marie Driscoll None None
Keith R. Fox None None
Paul K. Freeman None None
Kenneth C. Froewiss None None
Richard J. Herring None $10,001-$50,000
William McClayton None None
Rebecca W. Rimel $1 - $10,000 $10,001-$50,000
William N. Searcy, Jr. None None
Jean Gleason Stromberg None None
Robert Wadsworth None None
AGGREGATE DOLLAR RANGE OF BENEFICIAL OWNERSHIP/(1)/
FUNDS OVERSEEN BY
BOARD MEMBER IN THE
BOARD MEMBER DWS FUND COMPLEX
INDEPENDENT BOARD MEMBER:
John W. Ballantine Over $100,000
Henry P. Becton, Jr. Over $100,000
Dawn-Marie Driscoll Over $100,000
Keith R. Fox Over $100,000
Paul K. Freeman Over $100,000
Kenneth C. Froewiss Over $100,000
Richard J. Herring Over $100,000
William McClayton Over $100,000
Rebecca W. Rimel Over $100,000
William N. Searcy, Jr. Over $100,000
Jean Gleason Stromberg Over $100,000
Robert Wadsworth Over $100,000
INTERESTED BOARD MEMBER:
Ingo Gefeke/(2)/ None
(1) Securities beneficially owned as defined under the 1934 Act include
direct and/or indirect ownership of securities where the Board Member's
economic interest is tied to the securities, employment ownership and
securities when the Board Member can exert voting power and when the
Board Member has authority to sell the securities. The dollar ranges are:
None, $1 - $10,000, $10,001 - $50,000, $50,001 - $100,000, over $100,000.
I-9
(2) Mr. Gefeke is a board member of the following trusts and corporations:
Cash Account Trust, DWS Balanced Fund, DWS Blue Chip Fund, DWS Equity
Trust, DWS High Income Series, DWS Money Funds, DWS State Tax-Free Income
Series, DWS Strategic Government Securities Fund, DWS Strategic Income
Fund, DWS Target Fund, DWS Technology Fund, DWS Value Series, Inc., DWS
Variable Series II, Investors Cash Trust, Tax-Exempt California Money
Market Fund, DWS Dreman Value Income Edge Fund, Inc., DWS Global High
Income Fund, Inc., DWS High Income Trust, DWS Multi-Market Income Trust,
DWS Municipal Income Trust, DWS RREEF World Real Estate & Tactical
Strategies Fund, Inc., DWS Strategic Income Trust, and DWS Strategic
Municipal Income Trust.
OWNERSHIP IN SECURITIES OF THE ADVISOR AND RELATED COMPANIES
As reported to each fund, the information in the table below reflects ownership
by the Independent Board Members and their immediate family members of certain
securities as of December 31, 2009. An immediate family member can be a spouse,
children residing in the same household including step and adoptive children
and any dependents. The securities represent ownership in the Advisor or
Distributor and any persons (other than a registered investment company)
directly or indirectly controlling, controlled by, or under common control with
the Advisor or Distributor (including Deutsche Bank AG).
OWNER AND VALUE OF PERCENT OF
INDEPENDENT RELATIONSHIP TO TITLE OF SECURITIES ON AN CLASS ON AN
BOARD MEMBER BOARD MEMBER COMPANY CLASS AGGREGATE BASIS AGGREGATE BASIS
John W. Ballantine None
Henry P. Becton, Jr. None
Dawn-Marie Driscoll None
Keith R. Fox None
Paul K. Freeman None
Kenneth C. Froewiss None
Richard J. Herring None
William McClayton None
Rebecca W. Rimel None
William N. Searcy, Jr. None
Jean Gleason Stromberg None
Robert H. Wadsworth None
As of April 5, 2010, all Board Members and officers owned, as a group, less
than 1% of the outstanding shares of a fund.
25% OR GREATER OWNERSHIP
No investor owns 25% or more of a fund's shares as of April 5, 2010, and
therefore there is no presumed control of a fund.
5% OR GREATER OWNERSHIP OF SHARE CLASSES
The following table identifies those investors who own 5% or more of a fund
share class as of April 5, 2010. All holdings are of record, unless otherwise
indicated.
I-10
DWS COMMUNICATIONS FUND
NAME AND ADDRESS OF INVESTOR SHARES CLASS PERCENTAGE
FIRST CLEARING LLC 610,001.88 A 7.63%
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
ST LOUIS MO 63103-2523
CITIGROUP GLOBAL MARKETS INC 448,550.53 A 5.61%
ATTN PETER BOOTH 7TH FL
NEW YORK NY 10001-2402
CITIGROUP GLOBAL MARKETS INC 4,759.56 B 6.90%
ATTN PETER BOOTH 7TH FL
NEW YORK NY 10001-2402
MORGAN STANLEY & CO. 43,695.84 C 12.04%
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ 07311
CITIGROUP GLOBAL MARKETS INC 42,989.50 C 11.85%
ATTN PETER BOOTH 7TH FL
NEW YORK NY 10001-2402
FIRST CLEARING LLC 28,350.80 C 7.81%
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
ST LOUIS MO 63103-2523
STATE STREET BANK & TRUST CO 46,491.88 Institutional 40.56%
CUST FBO
DWS LIFECOMPASS 2020 FUND
QUINCY MA 02171-2105
STATE STREET BANK & TRUST CO 26,514.12 Institutional 23.13%
CUST FBO
DWS LIFECOMPASS 2015 FUND
QUINCY MA 02171-2105
STATE STREET BANK & TRUST CO 15,927.53 Institutional 13.90%
CUST FBO
DWS LIFECOMPASS 2030 FUND
QUINCY MA 02171-2105
PERSHING LLC 7,769.38 Institutional 6.78%
JERSEY CITY NJ 07303-2052
STATE STREET BANK & TRUST CO 7,504.75 Institutional 6.55%
CUST FBO
DWS LIFECOMPASS 2040 FUND
QUINCY MA 02171-2105
STATE STREET BANK & TRUST CO 6,270.57 Institutional 5.47%
CUST FBO
DWS LIFECOMPASS RETIREMENT FUND
QUINCY MA 02171-2105
I-11
DWS RREEF REAL ESTATE SECURITIES FUND
NAME AND ADDRESS OF INVESTOR SHARES CLASS PERCENTAGE
MORGAN STANLEY & CO. 2,735,074.87 A 8.82%
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ 07311
HARTFORD LIFE INSURANCE COMPANY 2,243,057.28 A 7.24%
ATTN UIT OPERATIONS
HARTFORD CT 06104-2999
MORGAN STANLEY & CO. 32,921.01 B 9.75%
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ 07311
FIRST CLEARING LLC 28,391.08 B 8.40%
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
ST LOUIS MO 63103-2523
MLPF&S FOR THE SOLE BENEFIT OF 25,813.35 B 7.64%
ITS CUSTOMERS
ATTN FUND ADM (9H061)
JACKSONVILLE FL 32246-6484
CITIGROUP GLOBAL MARKETS INC 20,688.87 B 6.12%
ATTN PETER BOOTH 7TH FL
NEW YORK NY 10001-2402
MLPF&S FOR THE SOLE BENEFIT OF 146,666.81 C 8.04%
ITS CUSTOMERS
ATTN FUND ADMINISTRATION
JACKSONVILLE FL 32246
FIRST CLEARING LLC 109,452.50 C 6.00%
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
ST LOUIS MO 63103-2523
MLPF&S FOR THE SOLE BENEFIT OF 9,263,681.64 Institutional 28.82%
ITS CUSTOMERS
ATTN FUND ADM (9LBY5)
JACKSONVILLE FL 32246-6484
CHARLES SCHWAB & CO INC 4,448,800.29 Institutional 13.84%
SPECIAL CUSTODY ACCT FOR THE
BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
SAN FRANCISCO CA 94104-4151
DWS TRUST COMPANY TTEE 3,470,941.05 Institutional 10.80%
FBO DB MATCHED SAVINGS PLAN
ATTN ASSET RECON DEPT # XXXXXX
SALEM NH 03079-1143
EDWARD D JONES & CO 2,451,943.68 Institutional 7.63%
ATTN MUTUAL FUND
SHAREHOLDER ACCOUNTING
MARYLAND HTS MO 63043-3009
I-12
NAME AND ADDRESS OF INVESTOR SHARES CLASS PERCENTAGE
NFS LLC FBO 1,630,830.30 Institutional 5.07%
FIIOC AS AGENT FBO
QUALIFIED EMPLOYEE BENEFIT
PLANS 401K FINOPS-IC FUNDS
COVINGTON KY 41015-1987
HARTFORD LIFE INSURANCE 412,491.01 R 51.62%
COMPANY SEPARATE ACCOUNT
HARTFORD CT 06104-2999
CITIGROUP GLOBAL MARKETS INC 1,431,819.50 S 37.97%
BOOK ENTRY ACCOUNT
MUTUAL FUNDS DEPT
ATTN MATT MAESTRI
NEW YORK NY 10001-2402
CHARLES SCHWAB & CO INC 256,609.57 S 6.80%
SAN FRANCISCO CA 94104-4151
MERRILL LYNCH PIERCE FENNER 191,380.87 S 5.07%
& SMITH FOR THE SOLE BENEFIT OF
ITS CUSTOMERS
ATTN SERVICE TEAM 973Y3
JACKSONVILLE FL 32246-6484
I-13
PART I: APPENDIX I-B - BOARD COMMITTEES AND MEETINGS
INFORMATION CONCERNING COMMITTEES AND MEETINGS OF THE BOARD
The Board oversees the operation of the DWS funds and meets periodically to
oversee fund activities, and to review fund performance and contractual
arrangements with fund service providers. The Board met 10 times during the
most recently completed calendar year. Each Board Member attended at least 75%
of the meetings of the Board and meetings of the Board Committees on which such
Board Member served.
BOARD LEADERSHIP STRUCTURE
A fund's Board is responsible for the general oversight of the fund's affairs
and for assuring that the fund is managed in the best interests of its
shareholders. The Board regularly reviews the fund's investment performance as
well as the quality of other services provided to the fund and its shareholders
by DIMA and its affiliates, including administration and shareholder servicing.
At least annually, the Board reviews and evaluates the fees and operating
expenses paid by the fund for these services and negotiates changes that it
deems appropriate. In carrying out these responsibilities, the Board is
assisted by the fund's auditors, independent counsel and other experts as
appropriate, selected by and responsible to the Board.
Currently, all or in some cases all but one of a fund's Board Members are
Independent Board Members, meaning that they are not considered "interested
persons" (as defined in the 1940 Act) of the fund or its investment adviser.
These Independent Board Members must vote separately to approve all financial
arrangements and other agreements with a fund's investment adviser and other
affiliated parties. The role of the Independent Board Members has been
characterized as that of a "watchdog" charged with oversight to protect
shareholders' interests against overreaching and abuse by those who are in a
position to control or influence a fund. A fund's Independent Board Members
meet regularly as a group in executive session without representatives of the
investment adviser present. An Independent Board Member currently serves as
chairman of the Board.
Taking into account the number, the diversity and the complexity of the funds
overseen by the Board Members and the aggregate amount of assets under
management in the DWS funds, the Board has determined that the efficient
conduct of its affairs makes it desirable to delegate responsibility for
certain specific matters to committees of the Board. These committees, which
are described in more detail below, review and evaluate matters specified in
their charters and make recommendations to the Board as they deem appropriate.
Each committee may utilize the resources of a fund's counsel and auditors as
well as other experts. The committees meet as often as necessary, either in
conjunction with regular meetings of the Board or otherwise. The membership and
chair of each committee are appointed by the Board upon recommendation of the
Nominating and Governance Committee. The membership and chair of each committee
consists exclusively of Independent Board Members.
The Board has determined that this committee structure also allows the Board to
focus more effectively on the oversight of risk as part of its broader
oversight of the fund's affairs. While risk management is the primary
responsibility of a fund's investment adviser, the Board regularly receives
reports regarding investment risks and compliance risks. The Board's committee
structure allows separate committees to focus on different aspects of these
risks and their potential impact on some or all of the DWS funds and to discuss
with the fund's investment adviser and administrator how it monitors and
controls such risks.
I-14
BOARD COMMITTEES. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee,
Equity Oversight Committee, Fixed-Income and Quant Oversight Committee, and
Operations Committee.
NUMBER OF
MEETINGS IN LAST
NAME OF COMMITTEE CALENDAR YEAR FUNCTIONS CURRENT MEMBERS
AUDIT COMMITTEE 10 Assists the Board in fulfilling its responsibility William McClayton (Chair),
for oversight of (1) the integrity of the financial Kenneth C. Froewiss (Vice
statements, (2) the fund's accounting and Chair), Henry P. Becton, Jr.,
financial reporting policies and procedures, (3) Keith R. Fox, Richard J.
the fund's compliance with legal and regulatory Herring and William N.
requirements related to accounting and Searcy, Jr.
financial reporting and (4) the qualifications,
independence and performance of the
independent registered public accounting firm
for the fund. It also approves and recommends
to the Board the appointment, retention or
termination of the independent registered
public accounting firm for the fund, reviews the
scope of audit and internal controls, considers
and reports to the Board on matters relating to
the fund's accounting and financial reporting
practices, and performs such other tasks as
the full Board deems necessary or appropriate.
The Audit Committee receives annual
representations from the independent
registered public accounting firm as to its
independence.
I-15
NUMBER OF
MEETINGS IN LAST
NAME OF COMMITTEE CALENDAR YEAR FUNCTIONS CURRENT MEMBERS
NOMINATING AND 7 Recommends individuals for membership on Henry P. Becton, Jr. (Chair),
GOVERNANCE the Board, nominates officers, Board and Rebecca W. Rimel (Vice
COMMITTEE committee chairs, vice chairs and committee Chair), Paul K. Freeman and
members, and oversees the operations of the William McClayton
Board. The Nominating and Governance
Committee has not established specific,
minimum qualifications that must be met by an
individual to be considered by the Nominating
and Governance Committee for nomination as
a Board Member. The Nominating and
Governance Committee may take into account
a wide variety of factors in considering Board
Member candidates, including, but not limited
to: (i) availability and commitment of a
candidate to attend meetings and perform his
or her responsibilities to the Board, (ii) relevant
industry and related experience, (iii)
educational background, (iv) financial expertise,
(v) an assessment of the candidate's ability,
judgment and expertise, and (vi) the current
composition of the Board. The Committee
generally believes the the Board benefits from
diversity of background, experience and views
among its members, and considers this as a
factor in evaluating the composition of the
Board, but has not adopted any specific policy
in this regard. The Nominating and Governance
Committee reviews recommendations by
shareholders for candidates for Board positions
on the same basis as candidates
recommended by other sources. Shareholders
may recommend candidates for Board
positions by forwarding their correspondence
by US mail or courier service to Paul K.
Freeman, Independent Chairman, DWS Funds,
P.O. Box 101833, Denver, CO 80250-1833.
CONTRACT 7 Reviews at least annually, (a) the fund's Robert H. Wadsworth
COMMITTEE financial arrangements with DIMA and its (Chair), Keith R. Fox (Vice
affiliates, and (b) the fund's expense ratios. Chair), John W. Ballantine,
Dawn-Marie Driscoll and
William N. Searcy, Jr.
EQUITY OVERSIGHT 7 Reviews the investment operations of those John W. Ballantine (Chair),
COMMITTEE funds that primarily invest in equity securities William McClayton (Vice
(except for those funds managed by a Chair), Henry P. Becton, Jr.,
quantitative investment team). Keith R. Fox, Richard J.
Herring and Rebecca W.
Rimel
FIXED INCOME AND 7 Reviews the investment operations of those William N. Searcy, Jr.
QUANT OVERSIGHT funds that primarily invest in fixed-income (Chair), Jean Gleason
COMMITTEE securities or are managed by a quantitative Stromberg (Vice Chair),
investment team. Dawn-Marie Driscoll,
Kenneth C. Froewiss and
Robert H. Wadsworth
I-16
NUMBER OF
MEETINGS IN LAST
NAME OF COMMITTEE CALENDAR YEAR FUNCTIONS CURRENT MEMBERS
OPERATIONS 6 Reviews the administrative operations and Dawn-Marie Driscoll (Chair),
COMMITTEE general compliance matters of the fund. John W. Ballantine ( Vice
Reviews administrative matters related to the Chair), Rebecca W. Rimel,
operations of the fund, policies and procedures Jean Gleason Stromberg
relating to portfolio transactions, custody and Robert H. Wadsworth
arrangements, fidelity bond and insurance
arrangements, valuation of fund assets and
securities and such other tasks as the full
Board deems necessary or appropriate.
Oversees the valuation of the fund's securities
and other assets and determines, as needed,
the fair value of fund securities or other assets
under certain circumstances as described in
the fund's Valuation Procedures.
VALUATION SUB- 0 Appointed by the Operations Committee, the John W. Ballantine, Robert
COMMITTEE Valuation Sub-Committee may make H. Wadsworth, Dawn-Marie
determinations of fair value required when the Driscoll (Alternate), Rebecca
Operations Committee is not in session. W. Rimel (Alternate), and
Jean Gleason Stromberg
(Alternate)
AD HOC COMMITTEES. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.
I-17
PART I: APPENDIX I-C - BOARD MEMBER COMPENSATION
Each Independent Board Member receives compensation from each fund for his or
her services, which includes retainer fees and specified amounts for various
committee services and for the Board Chairperson. No additional compensation is
paid to any Independent Board Member for travel time to meetings, attendance at
directors' educational seminars or conferences, service on industry or
association committees, participation as speakers at directors' conferences or
service on special fund industry director task forces or subcommittees.
Independent Board Members do not receive any employee benefits such as pension
or retirement benefits or health insurance from a fund or any fund in the DWS
fund complex.
Board Members who are officers, directors, employees or stockholders of
Deutsche Asset Management or its affiliates receive no direct compensation from
the fund, although they are compensated as employees of Deutsche Asset
Management, or its affiliates, and as a result may be deemed to participate in
fees paid by a fund. The following tables show, for each Independent Board
Member, compensation from each fund during its most recently completed fiscal
year, and aggregate compensation from all of the funds in the DWS fund complex
during calendar year 2009.
AGGREGATE COMPENSATION FROM EACH FUND
BOARD MEMBER DWS COMMUNICATIONS FUND DWS RREEF REAL ESTATE SECURITIES FUND
INDEPENDENT BOARD MEMBER:
John W. Ballantine $385 $1,884
Henry P. Becton, Jr. $385 $1,884
Dawn-Marie Driscoll $385 $1,884
Keith R. Fox $371 $1,774
Paul K. Freeman $442 $2,337
Kenneth C. Froewiss $371 $1,774
Richard J. Herring $385 $1,884
William McClayton $394 $1,958
Rebecca W. Rimel $371 $1,774
William N. Searcy, Jr. $385 $1,884
Jean Gleason Stromberg $371 $1,774
Robert Wadsworth $394 $1,958
I-18
TOTAL COMPENSATION FROM DWS FUND COMPLEX
TOTAL COMPENSATION
FROM EACH FUND AND
BOARD MEMBER DWS FUND COMPLEX/(1)/
INDEPENDENT BOARD MEMBER:
John W. Ballantine $255,000
Henry P. Becton, Jr. $255,000
Dawn-Marie Driscoll $255,000
Keith R. Fox $240,000
Paul K. Freeman/(2)/ $315,829
Kenneth C. Froewiss $240,000
Richard J. Herring $255,000
William McClayton $265,000
Rebecca W. Rimel $240,000
William N. Searcy, Jr. $255,000
Jean Gleason Stromberg $240,000
Robert Wadsworth $298,000
(1) The DWS Fund Complex was composed of 129 funds as of December 31, 2009.
(2) Includes $75,829 in annual retainer fees received by Dr. Freeman as
Chairperson of DWS funds.
I-19
PART I: APPENDIX I-D - PORTFOLIO MANAGEMENT
FUND OWNERSHIP OF PORTFOLIO MANAGERS
The following table shows the dollar range of shares owned beneficially and of
record by the portfolio management team for each fund as well as in all DWS
Funds as a group (i.e., those funds advised by Deutsche Asset Management or its
affiliates), including investments by their immediate family members sharing
the same household and amounts invested through retirement and deferred
compensation plans. This information is provided as of the fund's most recent
fiscal year end.
DWS COMMUNICATIONS FUND
DOLLAR RANGE OF DOLLAR RANGE OF ALL DWS
NAME OF PORTFOLIO MANAGER FUND SHARES OWNED FUND SHARES OWNED
Walter Holick $0 $0
Frederic L. Fayolle $0 $0
DWS RREEF REAL ESTATE SECURITIES FUND
DOLLAR RANGE OF DOLLAR RANGE OF ALL DWS
NAME OF PORTFOLIO MANAGER FUND SHARES OWNED FUND SHARES OWNED
John W. Vojticek $10,001 - $50,000 $10,001 - $50,000
Jerry W. Ehlinger $100,001 - $500,000 $100,001 - $500,000
John F. Robertson $ 0 $1 - $10,000
Asad Kazim $10,001 - $50,000 $50,001 - $100,000
CONFLICTS OF INTEREST
In addition to managing the assets of each fund, a portfolio manager may have
responsibility for managing other client accounts of the Advisor or its
affiliates. The tables below show, per portfolio manager, the number and asset
size of (1) SEC registered investment companies (or series thereof) other than
each fund, (2) pooled investment vehicles that are not registered investment
companies and (3) other accounts (e.g., accounts managed for individuals or
organizations) managed by a portfolio manager. Total assets attributed to a
portfolio manager in the tables below include total assets of each account
managed, although a portfolio manager may only manage a portion of such
account's assets. The tables also show the number of performance based fee
accounts, as well as the total assets of the accounts for which the advisory
fee is based on the performance of the account. This information is provided as
of the fund's most recent fiscal year end.
DWS COMMUNICATIONS FUND
OTHER SEC REGISTERED INVESTMENT COMPANIES MANAGED:
NUMBER OF TOTAL ASSETS OF NUMBER OF INVESTMENT
REGISTERED REGISTERED COMPANY ACCOUNTS TOTAL ASSETS OF
NAME OF INVESTMENT INVESTMENT WITH PERFORMANCE- PERFORMANCE-BASED
PORTFOLIO MANAGER COMPANIES COMPANIES BASED FEE FEE ACCOUNTS
Walter Holick 2 $769,032,017 0 $0
Frederic L. Fayolle 2 $769,032,017 0 $0
I-20
DWS RREEF REAL ESTATE SECURITIES FUND
OTHER SEC REGISTERED INVESTMENT COMPANIES MANAGED:
NUMBER OF TOTAL ASSETS OF NUMBER OF INVESTMENT
REGISTERED REGISTERED COMPANY ACCOUNTS TOTAL ASSETS OF
NAME OF INVESTMENT INVESTMENT WITH PERFORMANCE- PERFORMANCE-BASED
PORTFOLIO MANAGER COMPANIES COMPANIES BASED FEE FEE ACCOUNTS
John W. Vojticek 8 $786,861,495 0 $0
Jerry W. Ehlinger 4 $265,126,318 0 $0
John F. Robertson 8 $786,861,495 0 $0
Asad Kazim 4 $265,126,318 0 $0
DWS COMMUNICATIONS FUND
OTHER POOLED INVESTMENT VEHICLES MANAGED:
NUMBER OF POOLED
NUMBER OF INVESTMENT VEHICLE TOTAL ASSETS OF
POOLED TOTAL ASSETS OF ACCOUNTS WITH PERFORMANCE-
NAME OF INVESTMENT POOLED INVESTMENT PERFORMANCE- BASED FEE
PORTFOLIO MANAGER VEHICLES VEHICLES BASED FEE ACCOUNTS
Walter Holick 2 $455,602,288
Frederic L. Fayolle 2 $455,602,288
DWS RREEF REAL ESTATE SECURITIES FUND
OTHER POOLED INVESTMENT VEHICLES MANAGED:
NUMBER OF POOLED
NUMBER OF INVESTMENT VEHICLE TOTAL ASSETS OF
POOLED TOTAL ASSETS OF ACCOUNTS WITH PERFORMANCE-
NAME OF INVESTMENT POOLED INVESTMENT PERFORMANCE- BASED FEE
PORTFOLIO MANAGER VEHICLES VEHICLES BASED FEE ACCOUNTS
John W. Vojticek 14 $811,003,320 1 $17,138,934
Jerry W. Ehlinger 14 $811,003,320 1 $17,138,934
John F. Robertson 14 $811,003,320 1 $17,138,934
Asad Kazim 1 $ 61,878,268 0 $ 0
DWS COMMUNICATIONS FUND
OTHER ACCOUNTS MANAGED:
NUMBER OF OTHER TOTAL ASSETS OF
TOTAL ASSETS ACCOUNTS WITH PERFORMANCE-
NAME OF NUMBER OF OF OTHER PERFORMANCE- BASED FEE
PORTFOLIO MANAGER OTHER ACCOUNTS ACCOUNTS BASED FEE ACCOUNTS
Walter Holick 0 $0 0 $0
Frederic L. Fayolle 0 $0 0 $0
I-21
DWS RREEF REAL ESTATE SECURITIES FUND
OTHER ACCOUNTS MANAGED:
NUMBER OF OTHER TOTAL ASSETS OF
TOTAL ASSETS ACCOUNTS WITH PERFORMANCE-
NAME OF NUMBER OF OF OTHER PERFORMANCE- BASED FEE
PORTFOLIO MANAGER OTHER ACCOUNTS ACCOUNTS BASED FEE ACCOUNTS
John W. Vojticek 46 $1,617,850,224 6 $133,860,187
Jerry W. Ehlinger 46 $1,617,850,224 6 $133,860,187
John F. Robertson 46 $1,617,850,224 6 $133,860,187
Asad Kazim 27 $ 816,917,216 4 $ 62,595,487
In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of each fund. The Advisor has in place a Code of Ethics
that is designed to address conflicts of interest and that, among other things,
imposes restrictions on the ability of portfolio managers and other "access
persons" to invest in securities that may be recommended or traded in each fund
and other client accounts.
I-22
PART I: APPENDIX I-E - AFFILIATED SERVICE PROVIDER COMPENSATION
DWS COMMUNICATIONS FUND
GROSS AMOUNT AMOUNT WAIVED GROSS AMOUNT PAID TO AMOUNT WAIVED BY
PAID TO DIMA BY DIMA FOR DIMA FOR GENERAL DIMA FOR GENERAL
FOR ADVISORY ADVISORY ADMINISTRATIVE ADMINISTRATIVE
FISCAL YEAR ENDED SERVICES SERVICES SERVICES SERVICES
2009 $1,122,306 $185,660 $113,898 $0
2008 $1,735,274 $198,469 $182,705 $0
2007 $3,196,146 $ 0 $355,796 $0
GROSS AMOUNT PAID TO AMOUNT WAIVED BY GROSS AMOUNT PAID TO AMOUNT WAIVED BY
DISC FOR TRANSFER DISC FOR TRANSFER DIFA FOR FUND DIFA FOR FUND
FISCAL YEAR ENDED AGENCY SERVICES AGENCY SERVICES ACCOUNTING SERVICES ACCOUNTING SERVICES
2009 $339,245 $322,540 - -
2008 $391,758 $391,758 - -
2007 $546,144 $234,679 - -
DWS RREEF REAL ESTATE SECURITIES FUND
GROSS AMOUNT AMOUNT WAIVED GROSS AMOUNT PAID TO AMOUNT WAIVED BY
PAID TO DIMA BY DIMA FOR DIMA FOR GENERAL DIMA FOR GENERAL
FOR ADVISORY ADVISORY ADMINISTRATIVE ADMINISTRATIVE
FISCAL YEAR ENDED SERVICES SERVICES SERVICES SERVICES
2009 $3,430,826 $0 $ 844,062 $0
2008 $5,070,966 $0 $1,293,415 $0
2007 $7,375,413 $0 $1,924,771 $0
GROSS AMOUNT PAID TO AMOUNT WAIVED BY GROSS AMOUNT PAID TO AMOUNT WAIVED BY
DISC FOR TRANSFER DISC FOR TRANSFER DIFA FOR FUND DIFA FOR FUND
FISCAL YEAR ENDED AGENCY SERVICES AGENCY SERVICES ACCOUNTING SERVICES ACCOUNTING SERVICES
2009 $ 868,379 $ 0 - -
2008 $1,059,576 $ 0 - -
2007 $1,203,337 $26,036 - -
DWS COMMUNICATIONS FUND
The following waivers were in effect during the most recent three fiscal years:
For the period from January 1, 2007 through September 30, 2007, the Advisor had
contractually agreed to waive its fees and/or reimburse certain operating
expenses of the Fund (excluding certain expenses such as extraordinary
expenses, taxes, brokerage, interest, proxy and organizational and offering
expenses) to the extent necessary to maintain the Fund's total annual expenses
at 1.72%, 2.47%, 2.47% and 1.47% for Class A, Class B, Class C and
Institutional Class shares, respectively.
For the period from January 1, 2007 through September 30, 2008, the Advisor had
voluntarily agreed to waive its fees and/or reimburse certain operating
expenses of the Fund (excluding certain expenses such as extraordinary
expenses, taxes, brokerage and interest) to the extent necessary to maintain
the Fund's total annual operating expenses at 1.43%, 2.18%, 2.18% and 1.18% for
Class A, Class B, Class C and Institutional Class shares, respectively.
I-23
For the period from October 1, 2007 through September 30, 2008, the Advisor had
contractually agreed to waive its fees and/or reimburse certain operating
expenses of the Fund (excluding certain expenses such as extraordinary
expenses, taxes, brokerage and interest) to the extent necessary to maintain
the operating expenses of 2.50% for Class B.
For the period from October 1, 2008 through September 30, 2009, the Advisor had
contractually agreed to waive its fees and/or reimburse certain operating
expenses of the Fund to the extent necessary to maintain the Fund's total
annual operating expenses (excluding certain expenses such as extraordinary
expenses, taxes, brokerage and interest) at 1.54%, 2.29%, 2.29% and 1.29% for
Class A, Class B, Class C and Institutional Class shares, respectively.
The following waiver is currently in effect:
Through September 30, 2010, the Advisor has contractually agreed to waive its
fees and/or reimburse certain operating expenses of the Fund to the extent
necessary to maintain the Fund's total annual operating expenses (excluding
certain expenses such as extraordinary expenses, taxes, brokerage and interest)
at 1.76%, 2.51%, 2.51% and 1.51% for Class A, Class B, Class C and
Institutional Class shares.
DWS RREEF REAL ESTATE SECURITIES FUND
The following waivers were in effect during the most recent three fiscal years:
For the period from January 1, 2007 through January 21, 2007, the Advisor had
voluntarily agreed to waive its fees and/or reimburse certain operating
expenses of the Fund (excluding certain expenses such as extraordinary
expenses, taxes, brokerage, interest, proxy and organizational and offering
expenses) to the extent necessary to maintain the Fund's total annual operating
at 0.80%, 1.71%, 1.60%, 1.15%, 1.35% and 0.53% for Class A, Class B, Class C,
Class R, Class S and Institutional Class shares, respectively.
For the period from January 22, 2007 through June 30, 2007, the Advisor had
contractually agreed to waive its fees and/or reimburse certain operating
expenses of the Fund (excluding certain expenses such as extraordinary
expenses, taxes, brokerage, interest, proxy and organizational and offering
expenses) to the extent necessary to maintain the Fund's total annual operating
expenses at 1.60%, 2.35%, 2.35%, 1.85%, 1.35% and 1.35% for Class A, Class B,
Class C, Class R, Class S and Institutional Class shares, respectively.
I-24
PART I: APPENDIX I-F - SALES CHARGES
The following tables show the aggregate amount of underwriting commissions paid
to DIDI, the amount in commissions it paid out to brokers and the amount of
underwriting commissions retained by DIDI for the noted fiscal period(s).
CLASS A INITIAL SALES CHARGE:
AGGREGATE AGGREGATE
AGGREGATE AGGREGATE COMMISSIONS COMMISSIONS
FISCAL SALES COMMISSIONS PAID TO AFFILIATED RETAINED
YEAR COMMISSIONS PAID TO FIRMS FIRMS BY DIDI
DWS Communications Fund 2009 $ 8,000 $ 5,000 $ 1,000 $ 2,000
2008 $11,000 $ 8,000 $ 1,000 $ 2,000
2007 $45,000 $26,000 $40,000 $14,000
DWS RREEF Real Estate Securities Fund 2009 $22,000 $12,000 $ 1,000 $ 9,000
2008 $30,000 $16,000 $ 5,000 $ 9,000
2007 $46,000 $29,000 $ 0 $13,000
CDSC PAID TO DIDI ON:
FISCAL
YEAR CLASS A SHARES CLASS B SHARES CLASS C SHARES
DWS Communications Fund 2009 $ 0 $ 5,400 $ 363
2008 $ 47 $13,234 $ 910
2007 $ 114 $12,287 $ 1,123
DWS RREEF Real Estate Securities Fund 2009 $1,031 $16,866 $ 2,475
2008 $2,247 $46,117 $ 5,375
2007 $9,433 $88,715 $16,120
I-25
PART I: APPENDIX I-G - DISTRIBUTION PLAN PAYMENTS
Expenses of each fund paid in connection with the Rule 12b-1 Plans for each
class of shares that has adopted a Rule 12b-1 Plan are set forth below for the
most recent fiscal year.
12B-1 COMPENSATION TO UNDERWRITER AND FIRMS:
12B-1 DISTRIBUTION 12B-1 SHAREHOLDER
FEES SERVICES FEES
DWS Communications Fund Class A $ 0 $ 229,666
Class B $ 7,825 $ 1,647
Class C $ 32,704 $ 10,061
DWS RREEF Real Estate Securities Fund Class A $ 0 $ 765,712
Class B $ 43,374 $ 14,250
Class C $ 166,703 $ 55,287
Class R $ 21,196 $ 8,797
I-26
PART I: APPENDIX I-H - PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
PORTFOLIO TURNOVER RATES
FUND 2009 2008
DWS Communications Fund 148% 118%
DWS RREEF Real Estate Securities Fund 120%* 84%
*Excludes portfolio securities delivered as a result of processing redemption
in-kind transactions.
BROKERAGE COMMISSIONS
FISCAL BROKERAGE COMMISSIONS
YEAR PAID BY FUND
DWS Communications Fund 2009 $1,088,438
2008 $ 933,600
2007 $ 323,915
DWS RREEF Real Estate Securities Fund 2009 $2,603,638
2008 $2,492,579
2007 $2,887,318
BROKERAGE COMMISSIONS PAID TO AFFILIATED BROKERS
AGGREGATE % OF THE
BROKERAGE AGGREGATE
COMMISSIONS DOLLAR
NAME OF PAID BY FUND % OF THE TOTAL VALUE OF ALL
FISCAL AFFILIATED TO AFFILIATED BROKERAGE PORTFOLIO
YEAR BROKER AFFILIATION BROKERS COMMISSIONS TRANSACTIONS
DWS Communications Fund 2009 None - None - -
2008 None - None - -
2007 None - None - -
DWS RREEF Real Estate Securities Fund 2009 None - None - -
2008 None - None - -
2007 None - None - -
Each fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) that each fund held as of
the end of its most recent fiscal year.
Listed below are the regular broker dealers of each fund whose securities each
fund acquired during the past fiscal year. Also listed is the dollar value of
such securities held by each fund as of the end of the most recent fiscal year
end.
DWS COMMUNICATIONS FUND
NAME OF REGULAR BROKER OR DEALER OR PARENT
(ISSUER) SECURITIES OF REGULAR BROKER DEALERS
Merrill Lynch International $1,115,000
I-27
DWS RREEF REAL ESTATE SECURITIES FUND
NAME OF REGULAR BROKER OR DEALER OR PARENT
(ISSUER) SECURITIES OF REGULAR BROKER DEALERS
Retail Opportunity Investment Corporation $4,714,000
TRANSACTIONS FOR RESEARCH SERVICES
For the most recent fiscal year, each fund allocated the following amount of
transactions, and related commissions, to broker-dealer firms that have been
deemed by the Advisor to provide research services. The provision of research
services was not necessarily a factor in the placement of business with such
firms.
COMMISSIONS PAID
AMOUNT OF TRANSACTIONS ON TRANSACTIONS
FUND WITH RESEARCH FIRMS WITH RESEARCH FIRMS
DWS Communications Fund $186,436,295 $ 671,145/(1)/
DWS RREEF Real Estate Securities Fund $445,294,379 $ 651,174
/(1)/ The fund has commission sharing arrangements (CSA) in place with some
broker-dealers pursuant to which a specified percentage of the total
commissions paid on qualifiying trades are contributed to a CSA pool.
TheAdvisormay utilize the related commissions in the CSA pool to pay for market
data, third-party research and research from certain other broker-dealers with
whom the Advisor either does not trade or does not trade at significant levels.
I-28
PART I: APPENDIX I-I - INVESTMENT PRACTICES AND TECHNIQUES
Below is a list of headings related to investment policies and techniques which
are further described in Appendix II-G.
DWS COMMUNICATIONS FUND
Asset Segregation
Borrowing
Cash Management Vehicles
Common Stock
Convertible Securities
Depository Receipts
Derivatives
Eurodollar Obligations
Foreign Currencies
Foreign Investment(s) and Sovereign Debt and Brady Bonds
High Yield Fixed Income Securities - Junk Bonds
Illiquid Securities
Impact of Large Redemptions and Purchases of Fund Shares
Interfund Borrowing and Lending Program
Investment-Grade Bonds
IPO Risk
Lending of Portfolio Securities
Mortgage-Backed Securities
Repurchase Agreements
Short-Term Securities
Sovereign Debt
DWS RREEF REAL ESTATE SECURITIES FUND
Asset Segregation
Borrowing
Cash Management Vehicles
Common Stock
Convertible Securities
Derivatives
Fixed Income Securities
High Yield Fixed Income Securities- Junk Bonds
Illiquid Securities
Impact of Large Redemptions and Purchases of Fund Shares
Interfund Borrowing and Lending Program
Investment Company Securities
Investment Grade Bonds
Lending of Portfolio Securities
Mortgage-Backed Securities
Real Estate Investment Trusts (REITs)
Repurchase Agreements
Short Sales
Short-Term Securities
When-Issued and Delayed Delivery Securities
I-29
PART I: APPENDIX I-J - ADDITIONAL INFORMATION
FUND CLASS CUSIP NUMBER
DWS Communications Fund Class A 23339G108
Fiscal Year End: 12/31 Class B 23339G207
Class C 23339G306
Institutional Class 23339G405
DWS RREEF Real Estate Securities Fund Class A 23339E491
Fiscal Year End: 12/31 Class B 23339E483
Class C 23339E475
Class R 23339E467
Class S 23339E459
Institutional Class 23339E442
I-30
STATEMENT OF ADDITIONAL INFORMATION (SAI) - PART II
PAGE
Part II................................................................................... II-1
Management of the Funds................................................................. II-1
Board Members.......................................................................... II-6
Purchase and Redemption of Shares....................................................... II-10
Purchases.............................................................................. II-11
Redemptions............................................................................ II-16
Distribution and Service Agreements and Plans........................................... II-24
Investments............................................................................. II-30
General Investment Practices and Techniques............................................ II-30
Portfolio Transactions.................................................................. II-31
Portfolio Holdings Information.......................................................... II-33
Net Asset Value......................................................................... II-34
Proxy Voting Guidelines................................................................. II-37
Miscellaneous........................................................................... II-38
Ratings Of Investments.................................................................. II-38
Part II: Appendix II-A - Board Members and Officers..................................... II-44
Part II: Appendix II-B - Portfolio Management Compensation.............................. II-49
Part II: Appendix II-C - Fee Rates of Service Providers................................. II-55
Part II: Appendix II-D - Financial Services Firms' Compensation......................... II-68
Part II: Appendix II-E - Firms With Which Deutsche Asset Management Has Revenue Sharing II-72
Arrangements
Part II: Appendix II-F - Class A Sales Charge Schedule.................................. II-75
Part II: Appendix II-G - Investment Practices and Techniques............................ II-77
Part II: Appendix II-H - Taxes.......................................................... II-126
Part II: Appendix II-I - Proxy Voting Guidelines........................................ II-142
PART II
Part II of this SAI includes policies, investment techniques and information
that apply to the DWS funds. Unless otherwise noted, the use of the term "fund"
applies to all funds in the DWS funds complex.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISOR. DIMA, with headquarters at 345 Park Avenue, New York, New
York, is the investment advisor for each fund. Under the oversight of the
Board, DIMA on behalf of a fund makes the investment decisions, buys and sells
securities and conducts research that leads to these purchase and sale
decisions. DIMA manages the fund's daily investment and business affairs
subject to the policies established by the Board. DIMA and its predecessors
have more than 80 years of experience managing mutual funds.
DIMA is an indirect, wholly-owned subsidiary of Deutsche Bank AG, a
multi-national financial services company with limited liability organized
under the laws of the Federal Republic of Germany. As a result, DIMA, which is
part of DeAM, is affiliated with a variety of entities that provide, and/or
engage in commercial banking, insurance, brokerage, investment banking,
financial advisory, broker-dealer activities (including sales and trading),
hedge funds, real estate and private equity investing, in addition to the
provision of investment management services to institutional and individual
investors. DWS Investments is part of the Asset Management division of Deutsche
Bank AG and, within the US, represents the retail asset management activities
of Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company.
DIMA provides investment advisory services to many individuals and
institutions, including insurance companies, corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end registered investment companies.
DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide
range of investing expertise and resources, including hundreds of portfolio
managers and analysts and an office network that reaches the world's major
investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight, across
industries, regions, asset classes and investing styles.
In some instances, the investments for a fund may be managed by the same
individuals who manage one or more other mutual funds advised by DIMA that have
similar names, objectives and investment styles. A fund may differ from these
other mutual funds in size, cash flow patterns, distribution arrangements,
expenses and tax matters. Accordingly, the holdings and performance of a fund
may be expected to vary from those of other mutual funds.
Certain investments may be appropriate for a fund and also for other clients
advised by DIMA. Investment decisions for a fund and other clients are made
with a view to achieving their respective investment objectives and after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investments generally. Frequently, a
particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by DIMA to be equitable to each. In some cases, this procedure could
have an adverse effect on the price or amount of the securities purchased or
sold by a fund. Purchase and sale orders for a fund may be combined with those
of other clients of DIMA in the interest of achieving the most favorable net
results to a fund.
DIMA, its parent or its subsidiaries, or affiliates may have deposit, loan and
other commercial banking relationships with the issuers of obligations which
may be purchased on behalf of a fund, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities so purchased. Such affiliates deal, trade and invest for their own
accounts in such obligations and are among the leading dealers of various types
of such obligations. DIMA has informed a fund that, in making its investment
decisions, it does not obtain or use material inside information in its
possession or in the possession of any of its affiliates. In making investment
recommendations for a fund, DIMA will not inquire or take into consideration
whether an
II-1
issuer of securities proposed for purchase or sale by a fund is a customer of
DIMA, its parent or its subsidiaries or affiliates. Also, in dealing with its
customers, the Advisor, its parent, subsidiaries, and affiliates will not
inquire or take into consideration whether securities of such customers are
held by any fund managed by DIMA or any such affiliate.
Officers and employees of the Advisor from time to time may have transactions
with various banks, including a fund's custodian bank. It is the Advisor's
opinion that the terms and conditions of those transactions which have occurred
were not influenced by existing or potential custodial or other fund
relationships.
From time to time, DIMA, Deutsche Bank AG or their affiliates may at their sole
discretion invest their own assets in shares of a fund for such purposes it
deems appropriate, including investments designed to assist in the management
of a fund. Any such investment may be hedged by DIMA, Deutsche Bank AG or their
affiliates and, in that event, the return on such investment, net of the effect
of the hedge, would be expected to differ from the return of a fund. DIMA,
Deutsche Bank AG or their affiliates have no obligation to make any investment
in a fund and the amount of any such investment may or may not be significant
in comparison to the level of assets of a fund. In the event that such an
investment is made, except as otherwise required under the 1940 Act, DIMA,
Deutsche Bank AG or their affiliates would be permitted to redeem the
investment at such time that they deem appropriate.
CONSULTANTS. DWS Health Care Fund and DWS Health Care VIP: Thomas E. Bucher,
CFA provides consulting services to DIMA in connection with the investment
management services it provides to the fund. Mr. Bucher is employed by Deutsche
Asset Management International GmbH, Mainzer Landstrasse 178-190, 60325
Frankfurt am Main, Germany. Deutsche Asset Management International GmbH is an
investment advisor registered with the U.S. Securities and Exchange Commission.
Deutsche Asset Management International GmbH is an affiliate of DIMA and a
subsidiary of Deutsche Bank AG.
TERMS OF THE INVESTMENT MANAGEMENT AGREEMENTS. Pursuant to the Investment
Management Agreements, DIMA provides continuing investment management of the
assets of a fund. In addition to the investment management of the assets of a
fund, the Advisor determines the investments to be made for each fund,
including what portion of its assets remain uninvested in cash or cash
equivalents, and with whom the orders for investments are placed, consistent
with a fund's policies as stated in its prospectus and SAI, or as adopted by a
fund's Board. DIMA will also monitor, to the extent not monitored by a fund's
administrator or other agent, a fund's compliance with its investment and tax
guidelines and other compliance policies.
DIMA provides assistance to a fund's Board in valuing the securities and other
instruments held by a fund, to the extent reasonably required by valuation
policies and procedures that may be adopted by a fund.
Pursuant to the Investment Management Agreement, (unless otherwise provided in
the agreement or as determined by a fund's Board and to the extent permitted by
applicable law), DIMA pays the compensation and expenses of all the Board
members, officers, and executive employees of a fund, including a fund's share
of payroll taxes, who are affiliated persons of DIMA.
The Investment Management Agreement provides that a fund, except as noted
below, is generally responsible for expenses that include, but are not limited
to: fees payable to the Advisor; outside legal, accounting or auditing
expenses, including with respect to expenses related to negotiation,
acquisition or distribution of portfolio investments; maintenance of books and
records that are maintained by a fund, a fund's custodian, or other agents of a
fund; taxes and governmental fees; fees and expenses of a fund's accounting
agent, custodian, sub-custodians, depositories, transfer agents, dividend
reimbursing agents and registrars; payment for portfolio pricing or valuation
services to pricing agents, accountants, bankers and other specialists, if any;
brokerage commissions or other costs of acquiring or disposing of any portfolio
securities or other instruments of a fund; and litigation expenses and other
extraordinary expenses not incurred in the ordinary course of a fund's
business.
DWS S&P 500 Plus Fund pays DIMA a single fee (Unitary Fee) under the Investment
Management Agreement and Unitary Fee Agreement (UFA) that covers not only
DIMA's investment management services, but also all of the fund's day-to-day
expenses in the ordinary course of business, except as noted below. DIMA is
responsible under the UFA for the payment of all of the fund's day-to-day
operating expenses other than distribution fees and expenses (i.e., sales
charges and 12b-1 fees), brokerage and other portfolio trading expenses and
taxes, as well as extraordinary expenses, as determined by the Board. DIMA will
pay, among other expenses, the fees of the fund's custodian, administrator,
transfer agent and other service providers to the fund.
II-2
For Money Market Portfolio, DWS Dreman Mid Cap Value Fund, DWS Dreman Small Cap
Value Fund, and DWS Strategic Value Fund, the Investment Management Agreement
also provides that DIMA shall render administrative services (not otherwise
provided by third parties) necessary for a fund's operation as an open-end
investment company including, but not limited to, preparing reports and notices
to the Board and shareholders; supervising, negotiating contractual
arrangements with, and monitoring various third-party service providers to the
Registrant (such as the Registrant's transfer agent, pricing agents, custodian,
accountants and others); preparing and making filings with the SEC and other
regulatory agencies; assisting in the preparation and filing of the
Registrant's federal, state and local tax returns; preparing and filing the
Registrant's federal excise tax returns; assisting with investor and public
relations matters; monitoring the valuation of securities and the calculation
of net asset value; monitoring the registration of shares of the Registrant
under applicable federal and state securities laws; maintaining the
Registrant's books and records to the extent not otherwise maintained by a
third party; assisting in establishing accounting policies of the Registrant;
assisting in the resolution of accounting and legal issues; establishing and
monitoring the Registrant's operating budget; processing the payment of the
Registrant's bills; assisting the Registrant in, and otherwise arranging for,
the payment of distributions and dividends; and otherwise assisting the
Registrant in the conduct of its business, subject to the direction and control
of the Board.
On behalf of Money Market Portfolio, DWS Dreman Mid Cap Value Fund, DWS Dreman
Small Cap Value Fund, and DWS Strategic Value Fund, DIMA may enter into
arrangements with affiliates and third party service providers to perform
various administrative, back-office and other services relating to client
accounts. Such service providers may be located in the US or in non-US
jurisdictions. Pursuant to a sub-administration agreement between DIMA and
State Street Bank & Trust Company (SSB), DIMA has delegated certain
administrative functions for each of these funds to SSB under the Investment
Management Agreement. The costs and expenses of such delegation are borne by
DIMA, not by a fund.
The Investment Management Agreement allows DIMA to delegate any of its duties
under the Investment Management Agreement to a sub-advisor, subject to a
majority vote of the Board, including a majority of the Board who are not
interested persons of a fund, and, if required by applicable law, subject to a
majority vote of a fund's shareholders.
The Investment Management Agreement provides that DIMA shall not be liable for
any error of judgment or mistake of law or for any loss suffered by a fund in
connection with matters to which the agreement relates, except a loss resulting
from willful malfeasance, bad faith or gross negligence on the part of DIMA in
the performance of its duties or from reckless disregard by DIMA of its
obligations and duties under the agreement. The Investment Management Agreement
may be terminated at any time, without payment of penalty, by either party or
by vote of a majority of the outstanding voting securities of a fund on 60
days' written notice.
The Investment Management Agreement continues in effect from year to year only
if its continuance is approved annually by the vote of a majority of the Board
Members who are not parties to such agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval, and either by a vote of the Board or of a majority of the outstanding
voting securities of a fund.
Under the Investment Management Agreement, a fund, except as otherwise noted,
pays DIMA a management fee calculated daily based on the prior day's net assets
and then aggregated for a particular month. For Money Market Portfolio, a
series of Cash Account Trust, DWS Dreman Mid Cap Value Fund, DWS Dreman Small
Cap Value Fund, and DWS Strategic Value Fund, the management fee paid to DIMA
is calculated and payable monthly based on the average daily net assets for the
particular month. The annual management fee rate for each fund, except for DWS
S&P 500 Plus Fund, is set forth in PART II - APPENDIX II-C.
Under the Investment Management Agreement between DWS S&P 500 Plus Fund and
DIMA, a fund pays DIMA a Unitary Fee calculated daily and payable monthly equal
to a base fee rate that beginning January 1, 2010 will be adjusted based upon
the performance of a fund relative to a benchmark as further described in PART
II - APPENDIX II-C.
The management fee or Unitary Fee is payable monthly, provided that a fund will
make such interim payments as may be requested by DIMA not to exceed 75% of the
amount of the fee then accrued on the books of a fund and unpaid.
Under a separate agreement between Deutsche Bank AG and the funds, Deutsche
Bank AG has granted a license to the funds to utilize the trademark "DWS."
II-3
SUB-ADVISORS (APPLICABLE ONLY TO THOSE FUNDS THAT HAVE SUB-ADVISORY
ARRANGEMENTS AS DESCRIBED IN PART I). Each Sub-Advisor serves as a sub-advisor
to a fund pursuant to the terms of a sub-advisor agreement between it and DIMA
(Sub-Advisory Agreement).
Deutsche Asset Management International GmbH (DeAMi), Mainzer Landstrasse
178-190, 60325 Frankfurt am Main, Germany, serves as a Sub-Advisor of all or a
portion of the assets of certain funds. DeAMi is an investment advisor
registered with the SEC and is an affiliate of DIMA and a subsidiary of
Deutsche Bank AG.
Dreman Value Management, L.L.C. (Dreman), 520 East Cooper Avenue Suite 230-4,
Aspen, Colorado 81611, serves as a Sub-Advisor of all the assets of certain
funds. Dreman was formed in April 1977 and is an investment advisor registered
with the SEC. DVM is controlled by David Dreman.
Northern Trust Investments, N.A. (NTI), 50 South LaSalle Street, Chicago, IL
60603, serves as a Sub-Advisor of all the assets of certain funds. NTI is a
national banking association and an investment advisor registered under the
1940 Act. NTI is a subsidiary of The Northern Trust Company (TNTC). TNTC is an
Illinois state chartered banking organization and a member of the Federal
Reserve System. Formed in 1889, TNTC administers and manages assets for
individuals, personal trusts, defined contribution and benefit plans and other
institutional and corporate clients. TNTC is the principal subsidiary of
Northern Trust Corporation, a company that is regulated by the Board of
Governors of the Federal Reserve System as a financial holding company under
the U.S. Bank Holding Company Act of 1956, as amended.
RREEF America L.L.C. (RREEF), 875 North Michigan Avenue, 41st Floor, Chicago,
Illinois 60611, serves as a Sub-Advisor of all or a portion of the assets of
certain funds. RREEF is an investment advisor registered with the SEC. RREEF is
an affiliate of DIMA and a subsidiary of Deutsche Bank AG. RREEF has provided
real estate investment management services to institutional investors since
1975 and has been an investment advisor of real estate securities since 1993.
Aberdeen Asset Management Inc. (AAMI), 1735 Market Street, Philadelphia, PA
19103, serves as a Sub-Advisor of a portion of the assets for DWS Lifecycle
Long Range Fund. AAMI is an investment advisor registered with the SEC. AAMI is
a direct wholly owned subsidiary of Aberdeen Asset Management PLC, the parent
company of an asset management group formed in 1983. AAMI provides a full range
of international investment advisory services to institutional and retail
clients.
Turner Investment Partners, Inc. (Turner), 1205 Westlakes Drive, Suite 100,
Berwyn, PA 19312, serves as a Sub-Advisor to DWS Turner Mid Cap VIP. Turner is
an investment advisor registered with the SEC and is controlled by Robert E.
Turner and Mark D. Turner.
TERMS OF THE SUB-ADVISORY AGREEMENTS. Pursuant to the terms of the applicable
Sub-Advisory Agreement, a Sub-Advisor makes the investment decisions, buys and
sells securities, and conducts the research that leads to these purchase and
sale decisions for a fund. A Sub-Advisor is also responsible for selecting
brokers and dealers to execute portfolio transactions and for negotiating
brokerage commissions and dealer charges on behalf of a fund. Under the terms
of the Sub-Advisory Agreement, a Sub-Advisor manages the investment and
reinvestment of a fund's assets and provides such investment advice, research
and assistance as DIMA may, from time to time, reasonably request.
Each Sub-Advisory Agreement provides that the Sub-Advisor will not be liable
for any error of judgment or mistake of law or for any loss suffered by a fund
in connection with matters to which the Sub-Advisory Agreement relates, except
a loss resulting from willful misconduct, bad faith or gross negligence on the
part of the Sub-Advisor in the performance of its duties or from reckless
disregard by the Sub-Advisor of its obligations and duties under the
Sub-Advisory Agreement.
A Sub-Advisory Agreement continues from year to year only as long as such
continuance is specifically approved at least annually (a) by a majority of the
Board Members who are not parties to such agreement or interested persons of
any such party, and (b) by the shareholders or the Board of the Registrant. A
Sub-Advisory Agreement may be terminated at any time upon 60 days' written
notice by DIMA or by the Board of the Registrant or by majority vote of the
outstanding shares of a fund, and will terminate automatically upon assignment
or upon termination of a fund's Investment Management Agreement.
Under the Sub-Advisory Agreements between DIMA and the Sub-Advisors, DIMA, not
the fund, pays each Sub-Advisor a sub-advisory fee based on the percentage of
the assets overseen by the Sub-Advisor or based on a percentage of the fee
received by DIMA from a fund.
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The Sub-Advisor fee is paid directly by DIMA at specific rates negotiated
between DIMA and the Sub-Advisor. No fund is responsible for paying the
Sub-Advisor.
SUB-SUBADVISORS (APPLICABLE ONLY TO THOSE FUNDS THAT HAVE SUB-SUBADVISORY
ARRANGEMENTS AS DESCRIBED IN PART I). Each Sub-Subadvisor serves as a
sub-subadvisor with respect to a fund pursuant to the terms of a sub-subadvisor
agreement between it and the Sub-Advisor (Sub-Subadvisory Agreement).
RREEF Global Advisors Limited (RGAL), 1 Great Winchester Street, London, United
Kingdom, EC2N 2DB, serve as Sub-Subadvisor to a fund. RGAL is an investment
advisor registered with the SEC. In addition, RGAL is an affiliate of DIMA and
indirect, wholly owned subsidiaries of Deutsche Bank AG.
Deutsche Asset Management (Hong Kong) Limited (DeAM Hong Kong), 48/F Cheung
Kong Center, 2 Queen's Road Central, Hong Kong, China, serve as Sub-Subadvisors
to a fund. DeAM Hong Kong is an investment advisor registered with the SEC. In
addition, DeAM Hong Kong is an affiliate of DIMA and indirect, wholly owned
subsidiaries of Deutsche Bank AG.
Deutsche Investments Australia Limited (DIAL), Level 16, 126 Phillip Street,
Sydney NSW 200, Australia, serve as Sub-Subadvisors to a fund. DIAL is an
investment advisor registered with the SEC. In addition, DIAL is an affiliate
of DIMA and indirect, wholly owned subsidiaries of Deutsche Bank AG.
TERMS OF THE SUB-SUBADVISORY AGREEMENT. Pursuant to the terms of the applicable
Sub-Subadvisory Agreement and under the oversight of the Board, DIMA and the
Sub-Advisor, the Sub-Subadvisors provide investment management services with
respect to a fund's assets related to specific foreign markets and provides
such investment advice, research and assistance as the Sub-Advisor may, from
time to time, reasonably request. The Sub-Advisor allocates, and reallocates as
it deems appropriate, each of a fund's assets among the Sub-Subadvisors. A
Sub-Subadvisor is also responsible for selecting brokers and dealers to execute
portfolio transactions and for negotiating brokerage commissions and dealer
charges on behalf of a fund. Under the terms of the Sub-Subadvisory Agreement,
a Sub-Subadvisor manages the investment and reinvestment of a portion of a
fund's assets.
Each Sub-Subadvisory Agreement provides that the Sub-Subadvisor shall not be
subject to any liability for any act or omission in the course of providing
investment management services to a fund, except a loss resulting from willful
misconduct, bad faith or gross negligence on the part of the Sub-Subadvisor in
the performance of its duties or from reckless disregard by the Sub-Subadvisor
of its obligations and duties under the Sub-Subadvisory Agreement.
A Sub-Subadvisory Agreement continues from year to year only as long as such
continuance is specifically approved at least annually (a) by a majority of the
Board Members who are not parties to such agreement or interested persons of
any such party, and (b) by the shareholders or the Board of the
Trust/Corporation. A Sub-Subadvisory Agreement may be terminated at any time
upon 60 days' written notice by the Board of the Trust/Corporation or by
majority vote of the outstanding shares of a fund, and will terminate
automatically upon assignment or upon termination of a fund's Sub-Advisory
Agreement.
Under the Sub-Subadvisory Agreements, the Sub-Advisor, not a fund, pays each
Sub-Subadvisor a sub-subadvisory fee based on the percentage of the assets
overseen by the Sub-Subadvisor from the fee received by the Sub-Advisor from
DIMA. The Sub-Subadvisor fee is paid directly by the Sub-Advisor at specific
rates negotiated between the Sub-Advisor and the Sub-Subadvisor. No fund is
responsible for paying the Sub-Subadvisor.
AGREEMENT TO INDEMNIFY INDEPENDENT BOARD MEMBERS FOR CERTAIN EXPENSES. In
connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS funds (Affected Funds), DIMA has agreed to
indemnify and hold harmless the Affected Funds (Fund Indemnification Agreement)
against any and all loss, damage, liability and expense, arising from market
timing or marketing and sales matters alleged in any enforcement actions
brought by governmental authorities involving or potentially affecting the
Affected Funds or DIMA (Enforcement Actions) or that are the basis for private
actions brought by shareholders of the Affected Funds against the Affected
Funds, their directors and officers, DIMA and/or certain other parties (Private
Litigation), or any proceedings or actions that may be threatened or commenced
in the future by any person (including governmental authorities), arising from
or similar to the matters alleged in the Enforcement Actions or Private
Litigation. In recognition of its undertaking to indemnify the Affected Funds
and in light of the rebuttable presumption generally afforded to independent
directors/trustees of investment companies that they have not engaged in
disabling
II-5
conduct, DIMA has also agreed, subject to applicable law and regulation, to
indemnify certain (or, with respect to certain Affected Funds, all) of the
Independent Board Members of the Affected Funds, against certain liabilities
the Independent Board Members may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Board Members in connection
with any Enforcement Actions or Private Litigation. DIMA is not, however,
required to provide indemnification and advancement of expenses: (1) with
respect to any proceeding or action which the Affected Funds' Board determines
that the Independent Board Members ultimately would not be entitled to
indemnification or (2) for any liability of the Independent Board Members or
their shareholders to which the Independent Board Member would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the Independent Board Member's duties as a director or
trustee of the Affected Funds as determined in a final adjudication in such
action or proceeding. The estimated amount of any expenses that may be advanced
to the Independent Board Members or indemnity that may be payable under the
indemnity agreements is currently unknown. These agreements by DIMA will
survive the termination of the Investment Management Agreements between DIMA
and the Affected Funds.
BOARD MEMBERS
BOARD MEMBERS AND OFFICERS' IDENTIFICATION AND BACKGROUND. The identification
and background of the Board Members and Officers of the Registrant are set
forth in PART II - APPENDIX II-A.
BOARD COMMITTEES AND COMPENSATION. Information regarding the Committees of the
Board, as well as compensation paid to the Independent Board Members and to
Board Members who are not officers of the Registrant, for certain specified
periods, is set forth in PART I - APPENDIX I-B AND PART I - APPENDIX II-C.
ADMINISTRATOR, FUND ACCOUNTING AGENT, TRANSFER AGENT AND SHAREHOLDER SERVICE
AGENT, AND CUSTODIAN
ADMINISTRATOR. For all funds except Money Market Portfolio, DWS Dreman Mid Cap
Value Fund, DWS Dreman Small Cap Value Fund, and DWS Strategic Value Fund. DIMA
serves as a fund's administrator pursuant to an Administrative Services
Agreement.
For its services under the Administrative Services Agreement, the Administrator
receives a fee at the rate set forth in PART II - APPENDIX II-C. For all funds
except Money Market Portfolio, DWS Dreman Mid Cap Value Fund, DWS Dreman Small
Cap Value Fund and DWS Strategic Value Fund, the Administrator will pay
Accounting Agency fees out of the Administrative Services fee.
Under the Administrative Services Agreement, the Administrator is obligated on
a continuous basis to provide such administrative services as the Board of a
fund reasonably deems necessary for the proper administration of a fund. The
Administrator provides a fund with personnel; arranges for the preparation and
filing of a fund's tax returns; prepares and submits reports and meeting
materials to the Board and the shareholders; prepares and files updates to a
fund's prospectus and statement of additional information as well as other
reports required to be filed by the SEC; maintains a fund's records; provides a
fund with office space, equipment and services; supervises, negotiates the
contracts of and monitors the performance of third parties contractors;
oversees the tabulation of proxies; monitors the valuation of portfolio
securities and monitors compliance with Board-approved valuation procedures;
assists in establishing the accounting and tax policies of a fund; assists in
the resolution of accounting issues that may arise with respect to a fund;
establishes and monitors a fund's operating expense budgets; reviews and
processes a fund's bills; assists in determining the amount of dividends and
distributions available to be paid by a fund, prepares and arranges dividend
notifications and provides information to agents to effect payments thereof;
provides to the Board periodic and special reports; provides assistance with
investor and public relations matters; and monitors the registration of shares
under applicable federal and state law. The Administrator also performs certain
fund accounting services under the Administrative Services Agreement.
The Administrative Services Agreement provides that the Administrator will not
be liable under the Administrative Services Agreement except for willful
misfeasance, bad faith or negligence in the performance of its duties or from
the reckless disregard by it of its duties and obligations thereunder. Pursuant
to an agreement between the Administrator and SSB, the Administrator has
delegated certain administrative functions to SSB. The costs and expenses of
such delegation are borne by the Administrator, not by a fund.
II-6
Pursuant to the Advisor's procedures, approved by the Board, proof of claim
forms are routinely filed on behalf of a fund by a third party service
provider, with certain limited exceptions. The Board receives periodic reports
regarding the implementation of these procedures.
FUND ACCOUNTING AGENT. For Money Market Portfolio, DWS Dreman Mid Cap Value
Fund, DWS Dreman Small Cap Value Fund, and DWS Strategic Value Fund, DIFA, One
Beacon Street, Boston, Massachusetts 02108, a subsidiary of DIMA, is
responsible for determining net asset value per share and maintaining the
portfolio and general accounting records for a fund pursuant to a Fund
Accounting Agreement. For its services under a Fund Accounting Agreement, DIFA
receives a fee at the rate set forth in PART II - APPENDIX II-C.
Pursuant to an agreement between DIFA and SSB, DIFA has delegated certain fund
accounting functions to SSB under the Fund Accounting Agreement. The costs and
expenses of such delegation are borne by DIFA, not by a fund.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGENT. DISC, 210 W. 10th Street, Kansas
City, Missouri 64105-1614, an affiliate of the Advisor, is each fund's transfer
agent, dividend-paying agent and shareholder service agent pursuant to the
Transfer Agency and Services Agreement. Pursuant to a sub-transfer agency
agreement between DISC and DST Systems, Inc. (DST), DISC has delegated certain
transfer agent, dividend paying agent and shareholder servicing agent functions
to DST. The costs and expenses of such delegation are borne by DISC, not by a
fund. For its services under the Transfer Agency and Services Agreement, DISC
receives a fee at the rate set forth in PART II - APPENDIX II-C. Each fund, or
the Advisor (including any affiliate of the Advisor), or both, may pay
unaffiliated third parties for providing recordkeeping and other administrative
services with respect to accounts of participants in retirement plans or other
beneficial owners of shares whose interests are generally held in an omnibus
account.
CUSTODIAN. Under its custody agreement with a fund, the Custodian (i) maintains
separate accounts in the name of a fund, (ii) holds and transfers portfolio
securities on account of a fund, (iii) accepts receipts and makes disbursements
of money on behalf of a fund, and (iv) collects and receives all income and
other payments and distributions on account of a fund's portfolio securities.
The Custodian has entered into agreements with foreign subcustodians approved
by the Board pursuant to Rule 17f-5 under the 1940 Act.
In some instances, the Custodian may use Deutsche Bank AG or its affiliates, as
subcustodian (DB Subcustodian) in certain countries. To the extent a fund holds
any securities in the countries in which the Custodian uses a DB Subcustodian
as a subcustodian, those securities will be held by DB Subcustodian as part of
a larger omnibus account in the name of the Custodian (Omnibus Account). For
its services, DB Subcustodian receives (1) an annual fee based on a percentage
of the average daily net assets of the Omnibus Account and (2) transaction
charges with respect to transactions that occur within the Omnibus Account. To
the extent that a DB Subcustodian receives any brokerage commissions for any
transactions, such transactions and amount of brokerage commissions paid by the
fund are set forth in PART I - APPENDIX I-H.
The Custodian's fee may be reduced by certain earnings credits in favor of a
fund.
FUND LEGAL COUNSEL. Provides legal services to the funds.
BOARD LEGAL COUNSEL. Serves as legal counsel to the Independent Board Members.
PRINCIPAL UNDERWRITER AND DISTRIBUTION AGREEMENT. Pursuant to a distribution
agreement (Distribution Agreement) with a fund, DIDI, 222 South Riverside
Plaza, Chicago, Illinois 60606, an affiliate of the Advisor, is the principal
underwriter and distributor for each class of shares of a fund and acts as
agent of a fund in the continuous offering of its shares. The Distribution
Agreement remains in effect for a class from year to year only if its
continuance is approved for the class at least annually by a vote of the Board,
including the Board Members who are not parties to the Distribution Agreement
or interested persons of any such party.
The Distribution Agreement automatically terminates in the event of its
assignment and may be terminated for a class at any time without penalty by a
fund or by DIDI upon 60 days' notice. Termination by a fund with respect to a
class may be by vote of (i) a majority of the Board Members who are not
interested persons of a fund and who have no direct or indirect financial
interest in the Distribution Agreement or any related agreement, or (ii) a
"majority of the outstanding voting securities" of the class of a fund, as
defined under the 1940 Act. All material amendments must be approved by the
Board in the manner described above with respect to the continuation of the
Distribution Agreement. The provisions
II-7
concerning continuation, amendment and termination of a Distribution Agreement
are on a series by series and class by class basis.
Under the Distribution Agreement, DIDI uses reasonable efforts to sell shares
of a fund and and may appoint various financial services firms to sell shares
of a fund. DIDI bears all of its expenses of providing services pursuant to the
Distribution Agreement, including the payment of any commissions, concessions,
and distribution fees to financial services firms. A fund pays the cost of the
registration of its shares for sale under the federal securities laws and the
registration or qualification of its shares for sale under the securities laws
of the various states. A fund also pays the cost for the prospectus and
shareholder reports to be typeset and printed for existing shareholders, and
DIDI, as principal underwriter, pays for the printing and distribution of
copies thereof used in connection with the offering of shares to prospective
investors. DIDI also pays for supplementary sales literature and advertising
costs. DIDI receives any sales charge upon the purchase of shares of a class
with an initial sales charge and pays commissions, concessions and distribution
fees to firms for the sale of a fund's shares. DIDI also receives any
contingent deferred sales charges paid with respect to the redemption of any
shares having such a charge. DIDI receives no compensation from a fund as
principal underwriter and distributor except with respect to certain fund
classes in amounts authorized by a Rule 12b-1 Plan adopted for a class by a
fund (see Distribution and Service Agreements and Plans).
SHAREHOLDER AND ADMINISTRATIVE SERVICES. Shareholder and administrative
services are provided to certain fund classes under a shareholder services
agreement (Services Agreement) with DIDI. The Services Agreement continues in
effect for each class from year to year so long as such continuance is approved
for the class at least annually by a vote of the Board, including the Board
Members who are not interested persons of a fund and who have no direct or
indirect financial interest in the Services Agreement or in any related
agreement. The Services Agreement automatically terminates in the event of its
assignment and may be terminated for a class at any time without penalty by a
fund or by DIDI upon 60 days' notice. Termination by a fund with respect to a
class may be by a vote of (i) the majority of the Board Members who are not
interested persons of a fund and who have no direct or indirect financial
interest in the Services Agreement or in any related agreement, or (ii) a
"majority of the outstanding voting securities" of the class of such fund, as
defined under the 1940 Act. The Services Agreement may not be amended for a
class to increase materially the fee to be paid by a fund without approval of a
majority of the outstanding voting securities of such class of a fund, and all
material amendments must in any event be approved by the Board in the manner
described above with respect to the continuation of the Services Agreement.
Under the Services Agreement, DIDI provides, and may appoint various financial
services firms to provide, information and services to investors in certain
classes of a fund. Firms appointed by DIDI provide such office space and
equipment, telephone facilities and personnel as is necessary or beneficial for
providing information and services to shareholders in the applicable classes of
a fund. Such services and assistance may include, but are not limited to,
establishing and maintaining accounts and records, processing purchase and
redemption transactions, answering routine inquiries regarding a fund,
providing assistance to clients in changing dividend and investment options,
account designations and addresses and such other administrative services as
may be agreed upon from time to time and permitted by applicable statute, rule
or regulation.
DIDI bears all of its expenses of providing those services pursuant to the
Services Agreement, including the payment of any service fees to financial
services firms appointed by DIDI to provide such services and DIDI receives
compensation from a fund for its services under the Services Agreement in
amounts authorized by a Rule 12b-1 Plan adopted for a class by a fund (see
Distribution and Service Agreements and Plans).
DIDI may itself provide some of the above distribution and shareholder and
administrative services and may retain any portion of the fees received under
the Distribution Agreement and/or the Services Agreement not paid to financial
services firms to compensate itself for such distribution and shareholder and
administrative functions performed for a fund. Firms to which DIDI may pay
commissions, concessions, and distribution fees or service fees or other
compensation may include affiliates of DIDI.
REGULATORY MATTERS AND LEGAL PROCEEDINGS. On December 21, 2006, Deutsche Asset
Management (DeAM) settled proceedings with the Securities and Exchange
Commission (SEC) and the New York Attorney General on behalf of Deutsche Asset
Management, Inc. (DAMI) and DIMA, the investment advisors to many of the DWS
Investments funds, regarding allegations of improper trading of fund shares at
DeAM and at the legacy Scudder and Kemper organizations prior to their
acquisition by DeAM in April 2002. These regulators alleged
II-8
that although the prospectuses for certain funds in the regulators' view
indicated that the funds did not permit market timing, DAMI and DIMA breached
their fiduciary duty to those funds in that their efforts to limit trading
activity in the funds were not effective at certain times. The regulators also
alleged that DAMI and DIMA breached their fiduciary duty to certain funds by
entering into certain market timing arrangements with investors. These trading
arrangements originated in businesses that existed prior to the currently
constituted DeAM organization, which came together as a result of various
mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the
arrangements were terminated prior to the start of the regulatory
investigations that began in the summer of 2003. No current DeAM employee
approved these trading arrangements. Under the terms of the settlements, DAMI
and DIMA neither admitted nor denied any wrongdoing.
The terms of the SEC settlement, which identified improper trading in the
legacy Deutsche and Kemper mutual funds only, provide for payment of
disgorgement in the amount of $17.2 million. The terms of the settlement with
the New York Attorney General provide for payment of disgorgement in the amount
of $102.3 million, which is inclusive of the amount payable under the SEC
settlement, plus a civil penalty in the amount of $20 million. The total amount
payable by DeAM, approximately $122.3 million, will be distributed to
shareholders of the affected funds in accordance with a distribution plan to be
developed by a distribution consultant. The funds' investment advisors do not
believe these amounts will have a material adverse financial impact on them or
materially affect their ability to perform under their investment management
agreements with the DWS funds. The above-described amounts are not material to
Deutsche Bank, and have already been reserved.
Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight
responsibility of the advisors; engagement of an Independent Compliance
Consultant to conduct a comprehensive review of the advisors' supervisory
compliance and other policies and procedures designed to prevent and detect
breaches of fiduciary duty, breaches of the Code of Ethics and federal
securities law violations by the advisors and their employees; and commencing
in 2008, the advisors shall undergo a compliance review by an independent third
party.
In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS funds continue to be
independent of DeAM; the Chairmen of the DWS funds' Boards of Trustees continue
to be independent of DeAM; DeAM maintain existing management fee reductions for
certain funds for a period of five years and not increase management fees for
these certain funds during this period; the funds retain a senior officer (or
independent consultants, as applicable) responsible for assisting in the review
of fee arrangements and monitoring compliance by the funds and the investment
advisors with securities laws, fiduciary duties, codes of ethics and other
compliance policies, the expense of which shall be borne by DeAM; and periodic
account statements, fund prospectuses and the mutual funds' web site contain
additional disclosure and/or tools that assist investors in understanding the
fees and costs associated with an investment in the funds and the impact of
fees and expenses on fund returns.
DeAM has also settled proceedings with the Illinois Secretary of State
regarding market timing matters. The terms of the Illinois settlement provide
for investor education contributions totaling approximately $4 million and a
payment in the amount of $2 million to the Securities Audit and Enforcement
Fund.
On September 28, 2006, the SEC and the National Association of Securities
Dealers (NASD) (now known as the Financial Industry Regulatory Authority, or
FINRA) announced final agreements in which Deutsche Investment Management
Americas Inc. (DIMA), Deutsche Asset Management, Inc. (DAMI) and DWS Scudder
Distributors, Inc. (now known as DWS Investments Distributors, Inc. ("DIDI"))
settled administrative proceedings regarding disclosure of brokerage allocation
practices in connection with sales of the DWS funds' (now known as the DWS
Investments Funds) shares during 2001-2003. The agreements with the SEC and
NASD are reflected in orders which state, among other things, that DIMA and
DAMI failed to disclose potential conflicts of interest to the funds' Boards
and to shareholders relating to DIDI's use of certain funds' brokerage
commissions to reduce revenue sharing costs to broker dealer firms with whom it
had arrangements to market and distribute DWS fund shares. These directed
brokerage practices were discontinued in October 2003.
Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay
II-9
disgorgement, prejudgment interest and civil penalties in the total amount of
$19.3 million. The portion of the settlements distributed to the funds was
approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker dealers who sold fund
shares.
As part of the settlements, DIMA, DAMI and DIDI also agreed to implement
certain measures and undertakings relating to revenue sharing payments
including making additional disclosures in the funds' prospectuses or
Statements of Additional Information, adopting or modifying relevant policies
and procedures and providing regular reporting to the fund Boards.
Additional information announced by DeAM regarding the terms of the settlements
is available at www.dws investments.com/regulatory_settlements.
The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the
DWS funds. These lawsuits name as defendants various persons, including certain
DWS funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/ Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.
Based on currently available information, the funds' investment advisors
believe the likelihood that the pending lawsuits will have a material adverse
financial impact on a DWS fund is remote and such actions are not likely to
materially affect their ability to perform under their investment management
agreements with the DWS funds.
CODES OF ETHICS. Each fund, the Advisor, a fund's principal underwriter and, if
applicable, a fund's sub-advisor (and sub-subadvisor) have each adopted codes
of ethics under Rule 17j-1 under the 1940 Act. Board Members, officers of a
Registrant and employees of the Advisor and principal underwriter are permitted
to make personal securities transactions, including transactions in securities
that may be purchased or held by a fund, subject to requirements and
restrictions set forth in the applicable Code of Ethics. The Advisor's Code of
Ethics contains provisions and requirements designed to identify and address
certain conflicts of interest between personal investment activities and the
interests of a fund. Among other things, the Advisor's Code of Ethics prohibits
certain types of transactions absent prior approval, imposes time periods
during which personal transactions may not be made in certain securities, and
requires the submission of duplicate broker confirmations and quarterly
reporting of securities transactions. Additional restrictions apply to
portfolio managers, traders, research analysts and others involved in the
investment advisory process. Exceptions to these and other provisions of the
Advisor's or sub-advisors Codes of Ethics may be granted in particular
circumstances after review by appropriate personnel.
PURCHASE AND REDEMPTION OF SHARES
GENERAL INFORMATION. Policies and procedures affecting transactions in a fund's
shares can be changed at any time without notice, subject to applicable law.
Transactions may be contingent upon proper completion of application forms and
other documents by shareholders and their receipt by a fund's agents.
Transaction delays in processing (and changing account features) due to
circumstances within or beyond the control of a fund and its agents may occur.
Shareholders (or their financial service firms) are responsible for all losses
and fees resulting from bad checks, cancelled orders or the failure to
consummate transactions effected pursuant to instructions reasonably believed
to be genuine.
The Board and DIDI each may suspend (in whole or in part) or terminate the
offering of shares of a fund at any time for any reason and may limit the
amount of purchases by, and refuse to sell to, any person. During the period of
such suspension, the Board or DIDI potentially may permit certain persons (for
example, persons who are already shareholders the fund) to continue to purchase
additional shares of a fund and to have dividends reinvested.
Orders will be confirmed at a price based on the net asset value of a fund next
determined after receipt in good order by DIDI of the order accompanied by
payment in the case of a purchase order. Except as described below, orders
received by certain dealers or other financial services firms prior to the
close of a fund's business day will be confirmed at a price based on the net
asset value determined on that day (trade date).
USE OF FINANCIAL SERVICES FIRMS. Dealers and other financial services firms
provide varying arrangements for their clients to purchase and redeem a fund's
shares, including different minimum investments, and may assess transaction or
other fees. In addition, certain privileges
II-10
with respect to the purchase and redemption of shares or the reinvestment of
dividends may not be available through such firms. Firms may arrange with their
clients for other investment or administrative services. Such firms may
independently establish and charge additional amounts to their clients for such
services. Firms also may hold a fund's shares in nominee or street name as
agent for and on behalf of their customers. In such instances, the Shareholder
Service Agent will have no information with respect to or control over the
accounts of specific shareholders. Such shareholders may obtain access to their
accounts and information about their accounts only from their firm. Certain of
these firms may receive compensation from a fund through the Shareholder
Service Agent for record-keeping and other expenses relating to these nominee
accounts. Some firms may participate in a program allowing them access to their
clients' accounts for servicing including, without limitation, transfers of
registration and dividend payee changes; and may perform functions such as
generation of confirmation statements and disbursement of cash dividends. Such
firms, including affiliates of DIDI, may receive compensation from a fund
through the Shareholder Service Agent for these services.
A fund has authorized one or more financial service institutions, including
certain members of the Financial Industry Regulatory Authority (FINRA) other
than DIDI (financial institutions), to accept purchase and redemption orders
for a fund's shares. Such financial institutions may also designate other
parties, including plan administrator intermediaries, to accept purchase and
redemption orders on a fund's behalf. Orders for purchases or redemptions will
be deemed to have been received by a fund when such financial institutions or,
if applicable, their authorized designees accept the orders. Subject to the
terms of the contract between a fund and the financial institution, ordinarily
orders will be priced at a fund's net asset value next computed after
acceptance by such financial institution or its authorized designees. Further,
if purchases or redemptions of a fund's shares are arranged and settlement is
made at an investor's election through any other authorized financial
institution, that financial institution may, at its discretion, charge a fee
for that service.
TAX-SHELTERED RETIREMENT PLANS. The Shareholder Service Agent and DIDI provide
retirement plan services and documents and can establish investor accounts in
any of the following types of retirement plans:
o Traditional, Roth and Education IRAs. This includes Savings Incentive
Match Plan for Employees of Small Employers (SIMPLE), Simplified Employee
Pension Plan (SEP) IRA accounts and prototype documents.
o 403(b)(7) Custodial Accounts. This type of plan is available to employees
of most non-profit organizations.
o Prototype money purchase pension and profit-sharing plans may be adopted
by employers.
Materials describing these plans as well as model defined benefit plans, target
benefit plans, 457 plans, 401(k) plans, simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon
request. DIDI may pay commissions to dealers and other financial services firms
in connection with shares sold to retirement plans. For further information
about such compensation, see Compensation Schedules #1 and #2 as set forth in
PART II - APPENDIX II-D. Additional fees and transaction policies and
procedures may apply to such plans. Investors should consult their own tax
advisors before establishing a retirement plan.
PURCHASES
A fund may offer only certain of the classes of shares referred to in the
subsections below. Thus, the information provided below in regard to the
purchase of certain classes of shares is only applicable to funds offering such
classes of shares.
PURCHASE OF CLASS A SHARES. The public offering price of Class A shares is the
net asset value plus a sales charge based on investment amount, as set forth in
the relevant prospectus and the "DWS Sales Charge and Dealer Commission
Schedule" set forth in PART II - APPENDIX II-F.
CLASS A SHARES REDUCED SALES CHARGES
QUANTITY DISCOUNTS. An investor or the investor's dealer or other financial
services firm must notify the Shareholder Service Agent or DIDI whenever a
quantity discount or reduced sales charge is applicable to a purchase. In order
to qualify for a lower sales charge, all orders from an organized group will
have to be placed through a single dealer or other firm and identified as
originating from a qualifying purchaser.
COMBINED PURCHASES. A fund's Class A shares may be purchased at the rate
applicable to the sales charge discount bracket attained by combining same day
investments in Class A shares of any DWS funds that bear a sales charge.
II-11
CUMULATIVE DISCOUNT. Class A shares of a fund may also be purchased at the rate
applicable to the discount bracket attained by adding to the cost of shares
being purchased, the value of all Class A shares of DWS funds that bear a sales
charge (computed at the maximum offering price at the time of the purchase for
which the discount is applicable) already owned by the investor or his or her
immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).
LETTER OF INTENT. The reduced sales charges for Class A shares, as shown in the
relevant prospectus and the "DWS Sales Charge and Dealer Commission Schedule"
set forth in PART II - APPENDIX II-F, also apply to the aggregate amount of
purchases of Class A shares of DWS funds that bear a sales charge made by any
purchaser within a 24-month period under a written Letter of Intent (Letter)
provided to DIDI. The Letter, which imposes no obligation to purchase or sell
additional Class A shares, provides for a price adjustment depending upon the
actual amount purchased within such period. The Letter provides that the first
purchase following execution of the Letter must be at least 5% of the amount of
the intended purchase, and that 5% of the amount of the intended purchase
normally will be held in escrow in the form of shares pending completion of the
intended purchase. If the total investments under the Letter are less than the
intended amount and thereby qualify only for a higher sales charge than
actually paid, the appropriate number of escrowed shares are redeemed and the
proceeds used toward satisfaction of the obligation to pay the increased sales
charge. The Letter for an employer-sponsored employee benefit plan maintained
on the subaccount record keeping system available through ADP, Inc. (or
ExpertPlan for Flex Plans) under an alliance between ADP, Inc. (or ExpertPlan
for Flex Plans) and DIDI and its affiliates may have special provisions
regarding payment of any increased sales charge resulting from a failure to
complete the intended purchase under the Letter. A shareholder may include the
value (at the maximum offering price, which is determined by adding the maximum
applicable sales load charged to the net asset value) of all Class A shares of
such DWS funds held of record as of the initial purchase date under the Letter
as an "accumulation credit" toward the completion of the Letter, but no price
adjustment will be made on such shares.
RETIREMENT PLANS ON FLEX SYSTEM. For purposes of the Combined Purchases,
Cumulative Discount and Letter of Intent features described above,
employer-sponsored employee benefit plans using the Flex subaccount record
keeping system available through ExpertPlan under an alliance with DIDI and its
affiliates may include: (a) Money Market funds as "DWS funds," (b) all classes
of shares of any DWS fund and (c) the value of any other plan investments, such
as guaranteed investment contracts and employer stock, maintained on such
subaccount record keeping system.
CLASS A NAV SALES. Class A shares may be sold at net asset value without a
sales charge to:
(1) a current or former director or trustee of Deutsche or DWS mutual funds;
(2) an employee (including the employee's spouse or life partner and
children or stepchildren age 21 or younger) of Deutsche Bank AG or its
affiliates or of a subadvisor to any fund in the DWS family of funds or
of a broker-dealer authorized to sell shares of a fund or service agents
of a fund;
(3) certain professionals who assist in the promotion of DWS funds pursuant
to personal services contracts with DIDI, for themselves or immediate
members of their families;
(4) any trust, pension, profit-sharing or other benefit plan for only such
persons listed under the preceding paragraphs (a) and (b);
(5) persons who purchase such shares through bank trust departments that
process such trades through an automated, integrated mutual fund
clearing program provided by a third party clearing firm;
(6) selected employees (including their spouses or life partners and
children or stepchildren age 21 or younger) of banks and other financial
services firms that provide administrative services related to order
placement and payment to facilitate transactions in shares of a fund for
their clients pursuant to an agreement with DIDI or one of its
affiliates. Only those employees of such banks and other firms who as
part of their usual duties provide services related to transactions in
fund shares qualify;
(7) unit investment trusts sponsored by Ranson & Associates, Inc. and
unitholders of unit investment trusts sponsored by Ranson & Associates,
Inc. or its predecessors through reinvestment programs described in the
prospectuses of such trusts that have such programs;
(8) through certain investment advisors registered under the Investment
Advisers Act of 1940 and other
II-12
financial services firms acting solely as agent for their clients, that
adhere to certain standards established by DIDI, including a requirement
that such shares be sold for the benefit of their clients participating
in an investment advisory program or agency commission program under
which such clients pay a fee to the investment advisor or other firm for
portfolio management or agency brokerage services. Such shares are sold
for investment purposes and on the condition that they will not be
resold except through redemption or repurchase by a fund;
(9) employer-sponsored employee benefit plans using the Flex subaccount
recordkeeping system (Flex Plans) made available through ExpertPlan
under an alliance with DIDI and its affiliates, established prior to
October 1, 2003, provided that the Flex Plan is a participant-directed
plan that has not less than 200 eligible employees;
(10) investors investing $1 million or more ($250,000 or more for DWS
Alternative Asset Allocation Plus Fund, DWS California Tax-Free Income
Fund, DWS Disciplined Market Neutral Fund, DWS Floating Rate Plus Fund,
DWS Global Thematic Fund, DWS GNMA Fund, DWS Intermediate Tax/AMT Free
Fund, DWS Large Cap Value Fund, DWS Managed Municipal Bond Fund, DWS
Massachusetts Tax-Free Fund, DWS New York Tax-Free Income Fund, DWS
Short-Term Municipal Bond Fund, DWS Short Duration Plus Fund, DWS
Strategic High Yield Tax-Free Fund, DWS Select Alternative Allocation
Fund, DWS Strategic Government Securities Fund and DWS Strategic Income
Fund), either as a lump sum or through the Combined Purchases, Letter of
Intent and Cumulative Discount features referred to above (collectively,
the Large Order NAV Purchase Privilege). The Large Order NAV Purchase
Privilege is not available if another net asset value purchase privilege
is available;
(11) defined contribution investment only plans with a minimum of $1 million
in plan assets regardless of the amount allocated to the DWS funds;
In addition, Class A shares may be sold at net asset value without a sales
charge in connection with:
(12) the acquisition of assets or merger or consolidation with another
investment company, and under other circumstances deemed appropriate by
DIDI and consistent with regulatory requirements;
(13) a direct "roll over" of a distribution from a Flex Plan or from
participants in employer sponsored employee benefit plans maintained on
the OmniPlus subaccount record keeping system made available through
ExpertPlan under an alliance between ExpertPlan and DIDI and its
affiliates into a DWS Investments IRA;
(14) reinvestment of fund dividends and distributions; and
(15) exchanging an investment in Class A shares of another fund in the DWS
family of funds for an investment in a fund.
Class A shares also may be purchased at net asset value without a sales charge
in any amount by members of the plaintiff class in the proceeding known as
Howard and Audrey Tabankin, et al. v. Kemper Short-Term Global Income Fund, et
al., Case No. 93 C 5231 (N.D. IL). This privilege is generally non-transferable
and continues for the lifetime of individual class members and has expired for
non-individual class members. To make a purchase at net asset value under this
privilege, the investor must, at the time of purchase, submit a written request
that the purchase be processed at net asset value pursuant to this privilege
specifically identifying the purchaser as a member of the "Tabankin Class."
Shares purchased under this privilege will be maintained in a separate account
that includes only shares purchased under this privilege. For more details
concerning this privilege, class members should refer to the Notice of (i)
Proposed Settlement with Defendants; and (ii) Hearing to Determine Fairness of
Proposed Settlement, dated August 31, 1995, issued in connection with the
aforementioned court proceeding. For sales of fund shares at net asset value
pursuant to this privilege, DIDI may in its discretion pay dealers and other
financial services firms a concession, payable quarterly, at an annual rate of
up to 0.25% of net assets attributable to such shares maintained and serviced
by the firm. A firm becomes eligible for the concession based upon assets in
accounts attributable to shares purchased under this privilege in the month
after the month of purchase and the concession continues until terminated by
DIDI. The privilege of purchasing Class A shares of a fund at net asset value
under this privilege is not available if another net asset value purchase
privilege also applies.
PURCHASE OF CLASS B SHARES. Class B shares of a fund are offered at net asset
value. No initial sales charge is imposed, which allows the full amount of the
investor's purchase payment to be invested in Class B shares for
II-13
his or her account. Class B shares are subject to a contingent deferred sales
charge of 4.00% that declines over time (for shares sold within six years of
purchase) and Rule 12b-1 fees, as described in the relevant prospectus (see DWS
Sales Charge and Dealer Commission Schedule set forth in PART II - APPENDIX
II-F, and the discussion of Rule 12b-1 Plans under Distribution and Service
Agreements and Plans below). Class B shares automatically convert to Class A
shares after six years.
As described in the prospectus, effective March 1, 2010, Class B shares will be
closed to new purchases, except for exchanges and the reinvestment of dividends
or other distributions.
PURCHASE OF CLASS C SHARES. Class C shares of a fund are offered at net asset
value. No initial sales charge is imposed, which allows the full amount of the
investor's purchase payment to be invested in Class C shares for his or her
account. Class C shares are subject to a contingent deferred sales charge of
1.00% (for shares sold within one year of purchase) and Rule 12b-1 fees, as
described in the relevant prospectus (see DWS Sales Charge and Dealer
Commission Schedule set forth in PART II - APPENDIX II-F, and the discussion of
Rule 12b-1 Plans under Distribution and Service Agreements and Plans below).
PURCHASE OF CLASS R SHARES. Class R shares of a fund are offered at net asset
value. No initial sales charge is imposed, which allows the full amount of the
investor's purchase payment to be invested in Class R shares for his or her
account. Class R shares are subject to Rule 12b-1 fees, as described in the
relevant prospectus (see DWS Sales Charge and Dealer Commission Schedule set
forth in PART II - APPENDIX II-H, and the discussion of Rule 12b-1 Plans under
Distribution and Service Agreements and Plans below).
The Shareholder Service Agent monitors transactions in Class R shares to help
to ensure that investors purchasing Class R shares meet the eligibility
requirements described in the prospectus. If the Shareholder Service Agent is
unable to verify that an investor meets the eligibility requirements for Class
R, either following receipt of a completed application form within time frames
established by a fund or as part of its ongoing monitoring, the Shareholder
Service Agent may take corrective action up to and including canceling the
purchase order or redeeming the account.
PURCHASE OF INSTITUTIONAL CLASS SHARES. Institutional Class shares of a fund
are offered at net asset value without a sales charge to certain eligible
investors as described in the section entitled "Buying and Selling Shares" in a
fund's prospectus.
Investors may invest in Institutional Class shares by setting up an account
directly with the Shareholder Service Agent or through an authorized service
agent. Investors who establish shareholder accounts directly with the
Shareholder Service Agent should submit purchase and redemption orders as
described in the relevant prospectus.
PURCHASE OF CLASS S. Class S shares are generally only available to new
investors through fee-based programs of investment dealers that have special
agreements with a fund's distributor, through certain group retirement plans
and through certain registered investment advisors. These dealers and advisors
typically charge ongoing fees for services they provide.
MULTI-CLASS SUITABILITY FOR CLASSES A, B AND C. DIDI has established the
following procedures regarding the purchase of Class A, Class B and Class C
shares. Orders to purchase Class B shares of $100,000 or more and orders to
purchase Class C shares of $500,000 or more (certain funds have a $250,000
maximum for Class C purchases, see the applicable fund's prospectus) will be
declined with the exception of orders received from financial representatives
acting for clients whose shares are held in an omnibus account and
employer-sponsored employee benefit plans using the subaccount record keeping
system (System) maintained for DWS Investments-branded plans on record keeping
systems made available through ExpertPlan under an alliance between ExpertPlan
and DIDI and its affiliates (DWS Investments Flex Plans). The foregoing Class C
order limit of $500,000 or more is $250,000 or more for the certain funds, see
the relevant prospectus for additional information.
The following provisions apply to DWS Investments Flex Plans.
(1) Class B Share DWS Investments Flex Plans. Class B shares have not been
sold to DWS Investments Flex Plans that were established on the System
after October 1, 2003. Orders to purchase Class B shares for a DWS
Investments Flex Plan established on the System prior to October 1, 2003
that has regularly been purchasing Class B shares will be invested
instead in Class A shares at net asset value when the combined
subaccount value in DWS
II-14
funds or other eligible assets held by the plan is $100,000 or more.
This provision will be imposed for the first purchase after eligible
plan assets reach the $100,000 threshold. A later decline in assets
below the $100,000 threshold will not affect the plan's ability to
continue to purchase Class A shares at net asset value.
(2) Class C Share DWS Investments Flex Plans. Orders to purchase Class C
shares for a DWS Investments Flex Plan, regardless of when such plan was
established on the System, will be invested instead in Class A shares at
net asset value when the combined subaccount value in DWS funds or other
eligible assets held by the plan is $1,000,000 or more. This provision
will be imposed for the first purchase after eligible plan assets reach
the $1,000,000 threshold. A later decline in assets below the $1,000,000
threshold will not affect the plan's ability to continue to purchase
Class A shares at net asset value.
The procedures described above do not reflect in any way the suitability of a
particular class of shares for a particular investor and should not be relied
upon as such. A suitability determination must be made by investors with the
assistance of their financial representative.
PURCHASE PRIVILEGES FOR DWS AFFILIATED INDIVIDUALS. Current or former Board
members of the DWS funds, employees, their spouses or life partners and
children or step-children age 21 or younger, of Deutsche Bank AG or its
affiliates or a sub-adviser to any DWS fund or a broker-dealer authorized to
sell shares of a fund are generally eligible to purchase shares in the class of
a fund with the lowest expense ratio, usually the Institutional Class shares.
If a fund does not offer Institutional Class shares, these individuals are
eligible to buy Class A shares at NAV. Each fund also reserves the right to
waive the minimum account balance requirement for employee and director
accounts. Fees generally charged to IRA accounts will be charged to accounts of
employees and directors.
MONEY MARKET FUNDS. Shares of a fund are sold at net asset value (normally,
$1.00) directly from a fund or through selected financial services firms, such
as broker-dealers and banks. Each fund seeks to have its investment portfolio
as fully invested as possible at all times in order to achieve maximum income.
Since each fund will be investing in instruments that normally require
immediate payment in Federal Funds (monies credited to a bank's account with
its regional Federal Reserve Bank), as described in the applicable prospectus,
each fund has adopted procedures for the convenience of its shareholders and to
ensure that each fund receives investable funds.
VARIABLE INSURANCE FUNDS. Shares of DWS Variable Series I, DWS Variable Series
II and DWS Investments VIT Fund are continuously offered to separate accounts
of participating insurance companies at the net asset value per share next
determined after a proper purchase request has been received by the insurance
company. The insurance companies offer to variable annuity and variable life
insurance contract owners units in its separate accounts which directly
correspond to shares in a fund. Each insurance company submits purchase and
redemption orders to a fund based on allocation instructions for premium
payments, transfer instructions and surrender or partial withdrawal requests
which are furnished to the insurance company by such contract owners. Contract
owners can send such instructions and requests to the insurance companies in
accordance with procedures set forth in the prospectus for the applicable
variable insurance product offered by the insurance company.
PURCHASES IN-KIND. This section is applicable only to the following funds: DWS
High Income Plus Fund, DWS Mid Cap Growth Fund, DWS Small Cap Growth Fund, DWS
Equity 500 Index VIP and DWS Small Cap Index VIP. A fund may, at its own
option, accept securities in payment for shares. The securities delivered in
payment for shares are valued by the method described under "Net Asset Value"
as of the day a fund receives the securities. This is a taxable transaction to
the shareholder. Securities may be accepted in payment for shares only if they
are, in the judgment of the Advisor, appropriate investments for a fund. In
addition, securities accepted in payment for shares must: (i) meet the
investment objective and policies of the acquiring fund; (ii) be acquired by
the applicable fund for investment and not for resale; (iii) be liquid
securities which are not restricted as to transfer either by law or liquidity
of market; and (iv) if stock, have a value which is readily ascertainable as
evidenced by a listing on a stock exchange, over-the-counter market or by
readily available market quotations from a dealer in such securities. The
shareholder will be charged the costs associated with receiving or delivering
the securities. These costs include security movement costs and taxes and
registration costs. A fund reserves the right to accept or reject at its own
option any and all securities offered in payment for its shares.
II-15
REDEMPTIONS
A fund may offer only certain of the classes of shares referred to in the
subsections below. Thus, the information provided below in regard to the
redemption of certain classes of shares is only applicable to funds offering
such classes of shares.
A request for repurchase (confirmed redemption) may be communicated by a
shareholder through a financial services firm to DIDI, which firms must
promptly submit orders to be effective.
Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the relevant prospectus, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.
WIRES. The ability to send wires is limited by the business hours and holidays
of the firms involved. A fund is not responsible for the efficiency of the
federal wire system or the account holder's financial services firm or bank.
The account holder is responsible for any charges imposed by the account
holder's firm or bank. To change the designated account to receive wire
redemption proceeds, send a written request to the Shareholder Service Agent
with signatures guaranteed as described above or contact the firm through which
fund shares were purchased.
CONTINGENT DEFERRED SALES CHARGE (CDSC). The following example will illustrate
the operation of the CDSC for Class A (when applicable), Class B and Class C
shares, to the extent applicable. Assume that an investor makes a single
purchase of $10,000 of a fund's Class B shares and that 16 months later the
value of the shares has grown by $1,000 through reinvested dividends and by an
additional $1,000 of share appreciation to a total of $12,000. If the investor
were then to redeem the entire $12,000 in share value, the CDSC would be
payable only with respect to $10,000 because neither the $1,000 of reinvested
dividends nor the $1,000 of share appreciation is subject to the charge. The
charge would be at the rate of 3.00% ($300) because the redemption was in the
second year after the purchase was made.
The rate of the CDSC is determined by the length of the period of ownership.
Investments are tracked on a monthly basis. The period of ownership for this
purpose begins the first day of the month in which the order for the investment
is received. For example, an investment made in March of the year of investment
will be eligible for the second year's charge if redeemed on or after the first
day of March of the following year. In the event no specific order is requested
when redeeming shares subject to a CDSC, the redemption will be made first from
shares representing reinvested dividends and then from the earliest purchase of
shares. DIDI receives any CDSC directly. The CDSC will not be imposed upon
redemption of reinvested dividends or share appreciation.
The Class A CDSC for shares purchased through the Large Order NAV Purchase
Privilege will be waived in the event of:
(1) redemptions by a participant-directed qualified retirement plan
described in Code Section 401(a), a participant-directed non-qualified
deferred compensation plan described in Code Section 457 or a
participant-directed qualified retirement plan described in Code Section
403(b)(7) which is not sponsored by a K-12 school district;
(2) redemptions by employer-sponsored employee benefit plans using the
subaccount record keeping system made available through ADP, Inc. (or
ExpertPlan for Flex Plans) under an alliance between ADP, Inc. (or
ExpertPlan for Flex Plans) and DIDI and its affiliates;
(3) redemption of shares of a shareholder (including a registered joint
owner) who has died;
(4) redemption of shares of a shareholder (including a registered joint
owner) who after purchase of the shares being redeemed becomes totally
disabled (as evidenced by a determination by the federal Social Security
Administration);
(5) redemptions under a fund's Automatic Withdrawal Plan at a maximum of 12%
per year of the net asset value of the account;
(6) redemptions of shares whose dealer of record at the time of the
investment notifies DIDI that the dealer waives the discretionary
commission applicable to such Large Order NAV Purchase; and
II-16
(7) redemptions for certain loan advances, hardship provisions or returns of
excess contributions from retirement plans.
The Class B CDSC will be waived for the circumstances set forth in items (3),
(4), (5) and (7) above for Class A shares. In addition, this CDSC will be
waived:
(a) for redemptions made pursuant to any IRA systematic withdrawal based
on the shareholder's life expectancy including, but not limited to,
substantially equal periodic payments described in Code Section
72(t)(2)(A)(iv) prior to age 59 1/2;
(b) for redemptions to satisfy required minimum distributions after age
70 1/2 from an IRA account (with the maximum amount subject to this
waiver being based only upon the shareholder's DWS Investments IRA
accounts); and
(c) in connection with the following redemptions of shares held by
employer-sponsored employee benefit plans maintained on the
subaccount record keeping system made available by ADP, Inc. under
an alliance between ADP, Inc. and DIDI and its affiliates: (1) to
satisfy participant loan advances (note that loan repayments
constitute new purchases for purposes of the CDSC and the conversion
privilege), (2) in connection with retirement distributions (limited
at any one time to 12% of the total value of plan assets invested in
a fund), (3) in connection with distributions qualifying under the
hardship provisions of the Internal Revenue Code, (4) representing
returns of excess contributions to such plans and (5) in connection
with direct "roll over" distributions from a Flex Plan into a DWS
Investments IRA under the Class A net asset value purchase
privilege.
The Class C CDSC will be waived for the circumstances set forth in items (2),
(3), (4), (5) and (7) above for Class A shares and for the circumstances set
forth in items (a) and (b) above for Class B shares. In addition, this CDSC
will be waived for:
(i) redemption of shares by an employer-sponsored employee benefit plan
that offers funds in addition to DWS funds and whose dealer of record
has waived the advance of the first year administrative service and
distribution fees applicable to such shares and agrees to receive such
fees quarterly; and
(ii) redemption of shares purchased through a dealer-sponsored asset
allocation program maintained on an omnibus record-keeping system
provided the dealer of record had waived the advance of the first year
administrative services and distribution fees applicable to such shares
and has agreed to receive such fees quarterly.
REDEMPTIONS IN-KIND. A fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in readily
marketable securities. These securities will be chosen by a fund and valued as
they are for purposes of computing a fund's net asset value. A shareholder may
incur transaction expenses in converting these securities to cash. Please see
the prospectus for any requirements that may be applicable to certain funds to
provide cash up to certain amounts. For the following funds, this right may
only be exercised upon the consent of the shareholder: Money Market Portfolio
and Government & Agency Securities Portfolio, each a series of Cash Account
Trust; Cash Reserves Fund Institutional, a series of DWS Institutional Funds;
DWS Money Market Series, a series of DWS Money Market Trust; and Treasury
Portfolio, a series of Investors Cash Trust.
CHECKWRITING FOR CLASS A, B AND C SHARES (applicable to DWS Short Duration Plus
Fund, DWS Intermediate Tax/AMT Free Fund and DWS Massachusetts Tax-Free Fund
only). The Checkwriting Privilege is not offered to new investors. The
Checkwriting Privilege is available for shareholders of DWS Intermediate
Tax/AMT Free Fund and DWS Short Term Bond Fund (which was acquired by DWS Short
Duration Plus Fund) who previously elected this privilege prior to August 19,
2002, and to shareholders of DWS Massachusetts Tax-Free Fund who were
shareholders of the Scudder Massachusetts Limited Term Tax Free Fund prior to
July 31, 2000. Checks may be used to pay any person, provided that each check
is for at least $100 and not more than $5 million. By using the checks, the
shareholder will receive daily dividend credit on his or her shares until the
check has cleared the banking system. Investors who purchased shares by check
may write checks against those shares only after they have been on a fund's
book for 10 calendar days. Shareholders who use this service may also use other
redemption procedures. No shareholder may write checks against certificated
shares. A fund pays the bank charges for this service. However, each fund will
review the cost of operation periodically and reserve the right to determine if
direct charges to the persons who avail themselves of this service would be
appropriate. Each fund, State Street
II-17
Bank and Trust Company and the Transfer Agent reserve the right at any time to
suspend or terminate the Checkwriting procedure.
MONEY MARKET FUNDS ONLY
The following sections relate to Money Market Funds (except DWS Cash Investment
Trust Class A, B and C Shares of DWS Money Market Prime Series.
REDEMPTION BY CHECK/ACH DEBIT DISCLOSURE. A fund will accept Automated Clearing
House (ACH) debit entries for accounts that have elected the checkwriting
redemption privilege (see Redemptions by Draft below). Please consult the
prospectus for the availability of the checkwriting privilege for a specific
fund. An example of an ACH debit is a transaction in which you have given your
insurance company, mortgage company, credit card company, utility company,
health club, etc., the right to withdraw your monthly payment from your fund
account or the right to convert your mailed check into an ACH debit. Sometimes,
you may give a merchant from whom you wish to purchase goods the right to
convert your check to an ACH debit. You may also authorize a third party to
initiate an individual payment in a specific amount from your account by
providing your account information and authorization to such third party via
the Internet or telephone. You authorize a fund upon receipt of an ACH debit
entry referencing your account number, to redeem fund shares in your account to
pay the entry to the third party originating the debit. A fund will make the
payment on the basis of the account number that you provide to your merchant
and will not compare this account number with the name on the account. A fund,
the Shareholder Service Agent or any other person or system handling the
transaction are not required to determine if there is a discrepancy between the
name and the account number shown on the transfer instructions.
The payment of any ACH debit entry will be subject to sufficient funds being
available in the designated account; a fund will not be able to honor an ACH
debit entry if sufficient funds are not available. ACH debit entry transactions
to your fund account should not be initiated or authorized by you in amounts
exceeding the amount of Shares of a fund then in the account and available for
redemption. A fund may refuse to honor ACH debit entry transactions whenever
the right of redemption has been suspended or postponed, or whenever the
account is otherwise impaired. Your fund account statement will show any ACH
debit entries in your account; you will not receive any other separate notice.
(Merchants are permitted to convert your checks into ACH debits only with your
prior consent.)
You may authorize payment of a specific amount to be made from your account
directly by a fund to third parties on a continuing periodic basis. To arrange
for this service, you should contact the person or company you will be paying.
Any preauthorized transfers will be subject to sufficient funds being available
in the designated account. A preauthorized transfer will continue to be made
from the account in the same amount and frequency as initially established
until you terminate the preauthorized transfer instructions with the person or
company whom you have been paying. If regular preauthorized payments may vary
in amount, the person or company you are going to pay should tell you ten (10)
days before each payment will be made and how much the payment will be. If you
have told a fund in advance to make regular payments out of your account, you
may stop any of these payments by writing or calling the Shareholder Service
Agent at the address and telephone number listed in the next paragraph in time
for the Shareholder Service Agent to receive your request three (3) business
days or more before the payment is scheduled to be made. If you call, a fund
may also require that you put your request in writing so that a fund will
receive it within 14 days after you call. If you order a fund to stop one of
these payments three (3) business days or more before the transfer is scheduled
and a fund does not do so, a fund will be liable for your loss or damages but
not in an amount exceeding the amount of the payment. A stop payment order will
stop only the designated periodic payment. If you wish to terminate the
periodic preauthorized transfers, you should do so with the person or company
to whom you have been making payments.
IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR ACH DEBIT ENTRY TRANSACTIONS please
telephone (800-621-1048 but for Class S shares use 800-728-3337 and for
Institutional class shares use 800-730-1313) or write (DWS Investments Service
Company, P.O. Box 219151, Kansas City, MO 64121-9151) the Shareholder Service
Agent as soon as possible if you think your statement is wrong or shows an
improper transfer or if you need more information about a transfer listed on
the statement. Our business days are Monday through Friday except holidays. The
Shareholder Service Agent must hear from you no later than 60 days after a fund
sent you the first fund account statement on which the problem or error
appeared. If you do not notify the Shareholder Service Agent within sixty (60)
days after a fund sends you the account statement, you may not get back any
money you have lost, and you may not get back any additional money you lose
after the sixty (60) days if a fund or the
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Shareholder Service Agent could have stopped someone from taking that money if
you had notified the Shareholder Service Agent in time.
Tell us your name and account number, describe the error or the transfer you
are unsure about, and explain why you believe it is an error or why you need
more information. Tell us the dollar amount of the suspected error. If you tell
the Shareholder Service Agent orally, the Shareholder Service Agent may require
that you send your complaint or questions in writing within ten (10) business
days. The Shareholder Service Agent will determine whether an error occurred
within ten (10) business days after it hears from you and will correct any
error promptly. If the Shareholder Service Agent needs more time, however, it
may take up to 45 days (90 days for certain types of transactions) to
investigate your complaint or question. If the Shareholder Service Agent
decides to do this, your account will be credited with escrowed fund shares
within ten (10) business days for the amount you think is in error so that you
will have the use of the money during the time it takes the Shareholder Service
Agent to complete its investigation. If the Shareholder Service Agent asks you
to put your complaint or questions in writing and the Shareholder Service Agent
does not receive it within ten (10) business days, your account may not be
credited. The Shareholder Service Agent will tell you the results within three
(3) business days after completing its investigation. If the Shareholder
Service Agent determines that there was no error, the Shareholder Service Agent
will send you a written explanation. You may ask for copies of documents that
were used by the Shareholder Service Agent in the investigation.
In the event a fund or the Shareholder Service Agent does not complete a
transfer from your account on time or in the correct amount according to a
fund's agreement with you, a fund may be liable for your losses or damages. A
fund will not be liable to you if (i) there are not sufficient funds available
in your account, (ii) circumstances beyond our control (such as fire or flood
or malfunction of equipment) prevent the transfer, (iii) you or another
shareholder have supplied a merchant with incorrect account information, or
(iv) a merchant has incorrectly formulated an ACH debit entry. In any case, a
fund's liability shall not exceed the amount of the transfer in question.
A fund or the Shareholder Service Agent will disclose information to third
parties about your account or the transfers you make: (1) where it is necessary
for completing the transfers, (2) in order to verify the existence or condition
of your account for a third party such as a credit bureau or a merchant, (3) in
order to comply with government agencies or court orders or (4) if you have
given a fund written permission.
The acceptance and processing of ACH debit entry transactions is established
solely for your convenience and a fund reserves the right to suspend, terminate
or modify your ability to redeem fund shares by ACH debit entry transactions at
any time. ACH debit entry transactions are governed by the rules of the
National Automated Clearing House Association (NACHA) Operating Rules and any
local ACH operating rules then in effect, as well as Regulation E of the
Federal Reserve Board.
REDEMPTIONS BY DRAFT. Upon request, shareholders of certain Money Market Funds
will be provided with drafts to be drawn on a fund (Redemption Checks). Please
consult the prospectus for the availability of the checkwriting redemption
privilege for a specific Money Market Fund. These Redemption Checks may be made
payable to the order of any person for not more than $5 million. When a
Redemption Check is presented for payment, a sufficient number of full and
fractional shares in the shareholder's account will be redeemed as of the next
determined net asset value to cover the amount of the Redemption Check. This
will enable the shareholder to continue earning dividends until a fund receives
the Redemption Check. A shareholder wishing to use this method of redemption
must complete and file an Account Application which is available from a fund or
firms through which shares were purchased. Redemption Checks should not be used
to close an account since the account normally includes accrued but unpaid
dividends. A fund reserves the right to terminate or modify this privilege at
any time. This privilege may not be available through some firms that
distribute shares of a fund. In addition, firms may impose minimum balance
requirements in order to offer this feature. Firms may also impose fees to
investors for this privilege or establish variations of minimum check amounts.
Unless more than one signature is required pursuant to the Account Application,
only one signature will be required on Redemption Checks. Any change in the
signature authorization must be made by written notice to the Shareholder
Service Agent. Shares purchased by check or through certain ACH transactions
may not be redeemed by Redemption Check until the shares have been on a fund's
books for at least 10 days. Shareholders may not use this procedure to redeem
shares held in certificate form. A fund reserves the right to terminate or
modify this privilege at any time.
II-19
A fund may refuse to honor Redemption Checks whenever the right of redemption
has been suspended or postponed, or whenever the account is otherwise impaired.
A $10 service fee will be charged when a Redemption Check is presented to
redeem fund shares in excess of the value of a fund account or in an amount
less than the minimum Redemption Check amount specified in the prospectus; when
a Redemption Check is presented that would require redemption of shares that
were purchased by check or certain ACH transactions within 10 days; or when
"stop payment" of a Redemption Check is requested.
SPECIAL REDEMPTION FEATURES. Certain firms that offer Shares of the Money
Market Funds also provide special redemption features through charge or debit
cards and checks that redeem fund shares. Various firms have different charges
for their services. Shareholders should obtain information from their firm with
respect to any special redemption features, applicable charges, minimum balance
requirements and special rules of the cash management program being offered.
EXCHANGES
A fund may offer only certain of the classes of shares referred to in the
subsections below. Thus, the information provided below in regard to the
exchange of certain classes of shares is only applicable to funds offering such
classes of shares.
GENERAL. Shareholders may request a taxable exchange of their shares for shares
of the corresponding class of other DWS funds without imposition of a sales
charge, subject to the provisions below. If you exchange shares that have a
CDSC, the CDSC is not imposed on the exchange; however, the later redemption of
the acquired shares would be subject to the CDSC schedule of the acquired fund
(which, for Class A shares only, may differ from the schedule for a fund you
are exchanging out of), based on original cost and purchase date of the shares
you exchanged out of.
Shareholders who exchange their shares out of a DWS money market fund into
Class A shares of certain other DWS funds will generally be subject to the
applicable sales charge (not including shares acquired by dividend reinvestment
or by exchange from Class A shares of another DWS fund).
Certain DWS funds may not be available to shareholders on an exchange. To learn
more about which DWS funds may be available on exchange, please contact your
financial services firm or visit our Web site at: www.dws-investments.com or
call 800-621-1048 (for Class S shares use 800-728-3337 and for Institutional
class shares use 800-730-1313).
Shareholders must obtain prospectus(es) of the DWS fund they are exchanging
into from dealers, other firms or DIDI.
MULTI-CLASS CONVERSIONS. For purposes of conversion to Class A shares, shares
purchased through the reinvestment of dividends and other distributions paid
with respect to Class B shares in a shareholder's fund account will be
converted to Class A shares on a pro rata basis.
EXCHANGES INVOLVING INSTITUTIONAL SHARES. The following persons may, subject to
certain limitations, exchange the DWS Money Market Fund shares of DWS Money
Market Prime Series, for shares of the institutional class of other DWS funds,
and may exchange shares of the institutional class of other DWS funds for DWS
Money Market Fund shares: (1) a current or former director or trustee of the
Deutsche or DWS mutual funds; and (2) an employee, the employee's spouse or
life partner and children or stepchildren age 21 or younger of Deutsche Bank or
its affiliates or a subadvisor to any fund in the DWS family of funds or a
broker-dealer authorized to sell shares of a fund.
CLASS A TO CLASS S IN THE SAME FUND EXCHANGE PRIVILEGE: Investors who have
invested in Class A shares through a comprehensive or "wrap" fee program, or
other fee-based program sponsored by a broker-dealer, bank or registered
investment adviser may become eligible to invest in Class S shares. Subject to
the discretion of DWS Investments Distributors, Inc., such shareholders may
exchange their Class A shares for Class S shares of equal aggregate value of
the same fund. No sales charge or other charges will apply to any such
exchanges. Investors should contact their selling and/or servicing agents to
learn more about the details of this exchange feature.
COMPENSATION OF FINANCIAL INTERMEDIARIES
INCENTIVE PLAN FOR DWS INVESTMENTS DISTRIBUTORS PERSONNEL. DIDI has adopted an
Incentive Plan (Plan) covering wholesalers that are regional vice presidents
(DWS Investments Wholesalers). Generally, DWS Investments Wholesalers market
shares of the DWS funds to financial advisors, who in turn may recommend that
investors purchase shares of a DWS fund. The Plan is an incentive program that
combines a monthly incentive component with an annual outperformance award
II-20
potential, based on achieving certain sales and other performance metrics.
Under the Plan, DWS Investments Wholesalers will receive a monetary monthly
incentive based on the amount of sales generated from their marketing of the
funds, and that incentive will differ depending on the product tier of a fund.
Each fund is assigned to one of four product tiers - Tier I: cornerstone or
capital market compass funds; Tier II: core or baseline funds; Tier III:
non-core funds; and Tier IV: index or passive funds - taking into
consideration, among other things, the following criteria, where applicable:
o a fund's consistency with DWS Investments' branding and long-term
strategy
o a fund's competitive performance
o a fund's Morningstar rating
o The length of time a fund's Portfolio Managers have managed a
fund/Strategy
o Market size for the fund tier
o a fund's size, including sales and redemptions of a fund's shares
This information and other factors are presented to a senior management
committee comprised of representatives from various groups within DWS
Investments, who review on a regular basis the funds assigned to each product
tier described above, and may make changes to those assignments periodically.
No one factor, whether positive or negative, determines a fund's placement in a
given product tier; all these factors together are considered, and the
designation of funds in a particular tier represents management's judgment
based on the above criteria. In addition, management may consider a fund's
profile over the course of several review periods before making a change to its
tier assignment. These tier assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com/EN/ wholesaler-compensation.jsp,
approximately one month after the end of each quarter. DWS Investments
Wholesalers receive the highest compensation for Tier I funds, successively
less for Tier II (within which there are two payout sub-tiers) and Tier III
funds, and the lowest for Tier IV funds. The level of compensation among these
product tiers may differ significantly.
In the normal course of business, DWS Investments will from time to time
introduce new funds into the DWS family of funds. As a general rule, new funds
will be assigned to the product tier that is most appropriate to the type of
fund at the time of its launch based on the criteria described above. As
described above, the fund tier assignments are reviewed periodically and are
subject to change.
The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing funds in higher payout tiers over funds in lower payout tiers. The
Plan, however, will not change the price that investors pay for shares of a
fund. The DWS Investments Compliance Department monitors DWS Investments
Wholesaler sales and other activity in an effort to detect unusual activity in
the context of the compensation structure under the Plan. However, investors
may wish to take the Plan and the product tier of the fund into account when
considering purchasing a fund or evaluating any recommendations relating to
fund shares.
FINANCIAL SERVICES FIRMS' COMPENSATION. DIDI may pay compensation to financial
intermediaries in connection with the sale of fund shares as described in PART
II - APPENDIX II-D. In addition, financial intermediaries may receive
compensation for post-sale administrative services from DIDI or directly from a
fund as described in PART II - APPENDIX II-D.
COMPENSATION FOR RECORDKEEPING SERVICES. Certain financial institutions,
including affiliates of DIDI, may receive compensation from a fund for
recordkeeping and other expenses relating to nominee accounts or for providing
certain services to their client accounts. Generally, payments by a fund to
financial institutions for providing such services are not expected to exceed
0.25% of shareholder assets for which such services are provided. Normally,
compensation for these financial institutions is paid by the Transfer Agent,
which is in turn reimbursed by the applicable fund. To the extent that record
keeping compensation in excess of the amount reimbursed by a fund is owed to a
financial institution, the Transfer Agent, Distributor or Advisor may pay
compensation from their own resources (see Financial Intermediary Support
Payments below).
COMPENSATION FOR RECORDKEEPING SERVICES: VARIABLE INSURANCE FUNDS. Technically,
the shareholders of DWS Variable Series I, DWS Variable Series II and DWS
Investments VIT Funds are the participating insurance companies that offer
shares of the funds as investment options for holders of certain variable
annuity contracts and variable life insurance policies. Effectively, ownership
of fund shares is passed through to insurance company contract and policy
holders. The holders of the shares of a fund
II-21
on the records of a fund are the insurance companies and no information
concerning fund holdings of specific contract and policy holders is maintained
by a fund. The insurance companies place orders for the purchase and redemption
of fund shares with a fund reflecting the investment of premiums paid,
surrender and transfer requests and other matters on a net basis; they maintain
all records of the transactions and holdings of fund shares and distributions
thereon for individual contract and policy holders; and they prepare and mail
to contract and policy holders confirmations and periodic account statements
reflecting such transactions and holdings.
A fund may compensate certain insurance companies for record keeping and other
administrative services performed with regard to holdings of Class B shares as
an expense of the Class B shares up to 0.15%. These fees are included within
the "Other Expenses" category in the fee table for each portfolio in the Class
B Shares Prospectus (see How Much Investors Pay in the applicable fund's
prospectus). In addition, the Advisor may, from time to time, pay from its own
resources certain insurance companies for record keeping and other
administrative services related to Class A and Class B shares of the Portfolios
held by such insurance companies on behalf of their contract and policy holders
(see Financial Intermediary Support Payments below).
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS. In light of recent regulatory
developments, the Advisor, the Distributor and their affiliates have undertaken
to furnish certain additional information below regarding the level of payments
made by them to selected affiliated and unaffiliated brokers, dealers,
participating insurance companies or other financial intermediaries (financial
advisors) in connection with the sale and/or distribution of fund shares or the
retention and/or servicing of investors and fund shares (revenue sharing).
The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to each
fund, to financial advisors in connection with the sale and/or distribution of
fund shares or the retention and/or servicing of fund investors and fund
shares. Such revenue sharing payments are in addition to any distribution or
service fees payable under any Rule 12b-1 or service plan of any fund, any
record keeping/sub-transfer agency/networking fees payable by each fund
(generally through the Distributor or an affiliate) and/or the Distributor to
certain financial advisors for performing such services and any sales charges,
commissions, non-cash compensation arrangements expressly permitted under
applicable rules of FINRA or other concessions described in the fee table or
elsewhere in the prospectuses or the SAI as payable to all financial advisors.
For example, the Advisor, the Distributor and/or their affiliates may
compensate financial advisors for providing each fund with "shelf space" or
access to a third party platform or fund offering list, or other marketing
programs including, without limitation, inclusion of each fund on preferred or
recommended sales lists, mutual fund "supermarket" platforms and other formal
sales programs; granting the Distributor access to the financial advisor's
sales force; granting the Distributor access to the financial advisor's
conferences and meetings; assistance in training and educating the financial
advisor's personnel; and, obtaining other forms of marketing support. The level
of revenue sharing payments made to financial advisors may be a fixed fee or
based upon one or more of the following factors: gross sales, current assets
and/or number of accounts of each fund attributable to the financial advisor,
the particular fund or fund type or other measures as agreed to by the Advisor,
the Distributor and/or their affiliates and the financial advisors or any
combination thereof. The amount of these payments is determined at the
discretion of the Advisor, the Distributor and/or their affiliates from time to
time, may be substantial, and may be different for different financial advisors
based on, for example, the nature of the services provided by the financial
advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares, or the retention and/or servicing of
investors, to financial advisors in amounts that generally range from 0.01% up
to 0.26% of assets of a fund serviced and maintained by the financial advisor,
0.05% to 0.25% of sales of a fund attributable to the financial advisor, a flat
fee of $4,000 up to $500,000, or any combination thereof. These amounts are
annual figures typically paid on a quarterly basis and are subject to change at
the discretion of the Advisor, the Distributor and/or their affiliates. Receipt
of, or the prospect of receiving, this additional compensation, may influence
your financial advisor's recommendation of a fund or of any particular share
class of a fund. You should review your financial advisor's compensation
disclosure and/or talk to your financial advisor to obtain more information on
how this compensation may have influenced your financial advisor's
recommendation of a fund.
The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain
II-22
record keeping services from ADP, Inc. or ExpertPlan, Inc. on the DWS
Investments branded retirement plan platform (the "Platform") with the level of
revenue sharing payments being based upon sales of both the DWS funds and the
non-DWS funds by the financial advisor on the Platform or current assets of
both the DWS funds and the non-DWS funds serviced and maintained by the
financial advisor on the Platform.
As of the date hereof, each fund has been advised that the Advisor, the
Distributor and their affiliates expect that the firms listed in PART II -
APPENDIX II-E will receive revenue sharing payments at different points during
the coming year as described above.
The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements
with financial advisors at any time without notice.
The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales
of shares of the DWS funds or a particular DWS fund over sales of shares of
mutual funds (or non-mutual fund investments) with respect to which the
financial advisor does not receive additional compensation or promotional
incentives, or receives lower levels of additional compensation or promotional
incentives. Similarly, financial advisors may receive different compensation or
incentives that may influence their recommendation of any particular share
class of a fund or of other funds. These payment arrangements, however, will
not change the price that an investor pays for fund shares or the amount that a
fund receives to invest on behalf of an investor and will not increase fund
expenses. You may wish to take such payment arrangements into account when
considering and evaluating any recommendations relating to fund shares and you
should discuss this matter with your financial advisor and review your
financial advisor's disclosures.
It is likely that broker-dealers that execute portfolio transactions for a fund
will include firms that also sell shares of the DWS funds to their customers.
However, the Advisor will not consider sales of DWS fund shares as a factor in
the selection of broker-dealers to execute portfolio transactions for the DWS
funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for a fund. In addition, the Advisor, the Distributor and/or their
affiliates will not use fund brokerage to pay for their obligation to provide
additional compensation to financial advisors as described above.
DIVIDENDS (FOR ALL FUNDS EXCEPT MONEY FUNDS). A fund, other than a money fund,
intends to distribute, at least annually: (i) substantially all of its
investment company taxable income (computed without regard to the
dividends-paid deduction), which includes any excess of net realized short-term
capital gains over net realized long-term capital losses and net tax-exempt
income, if any; and (ii) the entire excess of net realized long-term capital
gains over net realized short-term capital losses. However, if a fund
determines that it is in the interest of its shareholders, a fund may decide to
retain all or part of its net realized long-term capital gains for
reinvestment, after paying the related federal taxes. In such a case,
shareholders will generally be treated for federal income tax purposes as
having received their share of such gains, but will then be able to claim a
credit against their federal income tax liability for the federal income tax a
fund pays on such gain. If a fund does not distribute the amount of ordinary
income and/or capital gain required to be distributed by an excise tax
provision of the Code, a fund may be subject to that excise tax on the
undistributed amounts. In certain circumstances, a fund may determine that it
is in the interest of shareholders to distribute less than the required amount.
A fund has a schedule for paying out any earnings to shareholders (see
Understanding Distributions and Taxes in each fund's prospectus).
Additional distributions may also be made in November or December (or treated
as made on December 31) if necessary to avoid an excise tax imposed under the
Code. Both types of distributions will be made in shares of a fund and
confirmations will be mailed to each shareholder unless a shareholder has
elected to receive cash, in which case a check will be sent.
Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.
Dividends paid by a fund with respect to each class of its shares will be
calculated in the same manner, at the same time and on the same day.
II-23
The level of income dividends per share (as a percentage of net asset value)
will be lower for Class B and C shares than for other share classes primarily
as a result of the distribution services fee applicable to Class B and C
shares. Distributions of capital gains, if any, will be paid in the same amount
for each class.
Income dividends and capital gain dividends (see Taxation of US Shareholders -
Dividends and Distributions), if any, of a fund will be credited to shareholder
accounts in full and fractional shares of the same class of that fund at net
asset value on the reinvestment date, unless shareholders indicate to the
Shareholder Service Agent, in writing, that they wish to receive them in cash
or in shares of other DWS funds as provided in the fund's prospectus.
Shareholders must maintain the required minimum account balance in the fund
distributing the dividends in order to use this privilege of investing
dividends of a fund in shares of another DWS fund. A fund will reinvest
dividend checks (and future dividends) in shares of that same fund and class if
checks are returned as undeliverable. Dividends and other distributions of a
fund in the aggregate amount of $10 or less are automatically reinvested in
shares of that fund and class unless the shareholder requests in writing that a
check be issued for that particular distribution.
If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of that fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen
to receive cash, a check will be sent. Distributions of investment company
taxable income and net realized capital gains are generally taxable, whether
made in shares or cash.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal income tax
purposes. Early each year, a fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.
A fund may at any time vary its foregoing distribution practices and,
therefore, reserves the right from time to time to either distribute or retain
for reinvestment such of its net investment income and its net short-term and
net long-term capital gains as its Board determines appropriate under the
then-current circumstances. In particular, and without limiting the foregoing,
a fund may make additional distributions of net investment income or capital
gain net income in order to satisfy the minimum distribution requirements
contained in the Code.
DIVIDENDS (MONEY FUNDS). Dividends are declared daily and paid monthly.
Shareholders will receive dividends in additional shares unless they elect to
receive cash, as provided in a fund's prospectus. Dividends will be reinvested
monthly in shares of a fund at net asset value on the last business day of the
month. A fund will pay shareholders that redeem their entire accounts all
unpaid dividends at the time of the redemption not later than the next dividend
payment date.
Each money fund calculates its dividends based on its daily net investment
income. For this purpose, the net investment income of a money fund generally
consists of (a) accrued interest income plus or minus amortized discount or
premium, (b) plus or minus all short-term realized gains and losses on
investments and (c) minus accrued expenses allocated to the applicable fund.
Expenses of each money fund are accrued each day. Dividends are reinvested
monthly and shareholders will receive monthly confirmations of dividends and of
purchase and redemption transactions except that confirmations of dividend
reinvestment for Individual Retirement Accounts and other fiduciary accounts
for which SSB acts as trustee will be sent quarterly.
Distributions of a fund's pro rata share of a fund's net realized long-term
capital gains in excess of net realized short-term capital losses, if any, and
any undistributed net realized short-term capital gains in excess of net
realized long-term capital losses are normally declared and paid annually at
the end of the fiscal year in which they were earned to the extent they are not
offset by any capital loss carryforwards.
If the shareholder elects to receive dividends or distributions in cash, checks
will be mailed monthly, within five business days of the reinvestment date, to
the shareholder or any person designated by the shareholder. A fund reinvests
dividend checks (and future dividends) in shares of a fund if checks are
returned as undeliverable. Dividends and other distributions in the aggregate
amount of $10 or less are automatically reinvested in shares of a fund unless
the shareholder requests that such policy not be applied to the shareholder's
account.
Dividends and distributions are treated the same for federal income tax
purposes, whether made in shares or cash.
DISTRIBUTION AND SERVICE AGREEMENTS AND PLANS
I. RETAIL FUNDS
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A fund may offer only certain of the classes of shares referred to in the
subsections below. Thus, the information provided below in regard to certain
classes of shares is only applicable to funds offering such classes of shares.
RULE 12B-1 PLANS. Certain funds, as described in the applicable prospectuses,
have adopted plans pursuant to Rule 12b-1 under the 1940 Act (each a Rule 12b-1
Plan) on behalf of their Class A, B, C and R shares, as applicable, that
authorize payments out of class assets for distribution and/or shareholder and
administrative services as described in more detail below. Because Rule 12b-1
fees are paid out of class assets on an ongoing basis, they will, over time,
increase the cost of an investment and may cost more than other types of sales
charges.
Rule 12b-1 Plans provide alternative methods for paying sales charges and
provide compensation to DIDI or intermediaries for post-sale servicing, which
may help funds grow or maintain asset levels to provide operational
efficiencies and economies of scale. Each Rule 12b-1 Plan is approved and
reviewed separately for each applicable class in accordance with Rule 12b-1
under the 1940 Act, which regulates the manner in which an investment company
may, directly or indirectly, bear the expenses of distributing its shares. A
Rule 12b-1 Plan may not be amended to increase the fee to be paid by a fund
with respect to a class without approval by a majority of the outstanding
voting securities of such class.
If a Rule 12b-1 Plan is terminated in accordance with its terms, the obligation
of the applicable class to make payments to DIDI pursuant to the Rule 12b-1
Plan will cease and a fund will not be required to make any payments not
previously accrued past the termination date. Thus, there is no legal
obligation for a class to pay any expenses incurred by DIDI other than fees
previously accrued and payable under a Rule 12b-1 Plan, if for any reason the
Rule 12b-1 Plan is terminated in accordance with its terms. Because the Rule
12b-1 Plans are compensation plans, future fees under a Rule 12b-1 Plan may or
may not be sufficient to cover DIDI for its expenses incurred. On the other
hand, under certain circumstances, DIDI might collect in the aggregate over
certain periods more in fees under the applicable Rule 12b-1 Plan than it has
expended over that same period in providing distribution services for a fund.
For example, if Class B shares of a fund were to appreciate (resulting in
greater asset base against which Rule 12b-1 fees are charged) and sales of a
fund's Class B shares were to decline (resulting in lower expenditures by DIDI
under the Rule 12b-1 Plan), fees payable could exceed expenditures. Similarly,
fees paid to DIDI could exceed DIDI's expenditures over certain periods shorter
than the life of the Rule 12b-1 Plan simply due to the timing of expenses
incurred by DIDI that is not matched to the timing of revenues received (e.g.,
a sales commission may be paid by DIDI related to an investment in Class B
shares in year 1, while the Rule 12b-1 fee to DIDI related to that investment
may accrue during year 1 through year 6 prior to conversion of the Class B
shares investment to Class A shares). Under these or other circumstances where
DIDI's expenses are less than the Rule 12b-1 fees, DIDI will retain its full
fees and make a profit.
CLASS B, CLASS C AND CLASS R SHARES
FEES FOR DISTRIBUTION SERVICES. For its services under the Distribution
Agreement, DIDI receives a fee from a fund under its Rule 12b-1 Plan, payable
monthly, at the annual rate of 0.75% of average daily net assets of a fund
attributable to its Class B shares. This fee is accrued daily as an expense of
Class B shares. Under the Distribution Agreement, DIDI also receives any
contingent deferred sales charges paid with respect to Class B shares. DIDI
currently compensates firms for sales of Class B shares at a commission rate of
3.75%.
For its services under the Distribution Agreement, DIDI receives a fee from a
fund under its Rule 12b-1 Plan, payable monthly, at the annual rate of 0.75% of
average daily net assets of a fund attributable to Class C shares. This fee is
accrued daily as an expense of Class C shares. DIDI currently advances to firms
the first year distribution fee at a rate of 0.75% of the purchase price of
Class C shares. DIDI does not advance the first year distribution fee to firms
for sales of Class C shares to employer-sponsored employee benefit plans using
the OmniPlus subaccount record keeping system made available through ADP, Inc.
under an alliance between ADP, Inc. and DIDI and its affiliates. For periods
after the first year, DIDI currently pays firms for sales of Class C shares a
distribution fee, payable quarterly, at an annual rate of 0.75% of net assets
attributable to Class C shares maintained and serviced by the firm. This fee
continues until terminated by DIDI or the applicable fund. Under the
Distribution Agreement, DIDI also receives any contingent deferred sales
charges paid with respect to Class C shares.
For its services under the Distribution Agreement, DIDI receives a fee from a
fund under its Rule 12b-1 Plan, payable monthly, at the annual rate of 0.25% of
average daily net assets of a fund attributable to Class R shares. This fee is
accrued daily as an expense of Class R shares. DIDI currently pays firms for
sales of Class R shares a distribution fee, payable quarterly, at an annual
rate of
II-25
0.25% of net assets attributable to Class R shares maintained and serviced by
the firm. This fee continues until terminated by DIDI or the applicable fund.
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
FEES FOR SHAREHOLDER SERVICES. For its services under the Services Agreement,
DIDI receives a shareholder services fee from a fund under a Rule 12b-1 Plan,
payable monthly, at an annual rate of up to 0.25% of the average daily net
assets of Class A, B, C and R shares of a fund, as applicable.
With respect to Class A and Class R Shares of a fund, DIDI pays each firm a
service fee, payable quarterly, at an annual rate of up to 0.25% of the net
assets in fund accounts that it maintains and services attributable to Class A
and Class R Shares of a fund, generally commencing with the month after
investment. With respect to Class B and Class C Shares of a fund, DIDI
currently advances to firms the first-year service fee at a rate of up to 0.25%
of the purchase price of such shares. DIDI does not advance the first year
service fee to firms for sales of Class C shares to employer-sponsored employee
benefit plans using the OmniPlus subaccount record keeping system made
available through ADP, Inc. under an alliance between ADP, Inc. and DIDI and
its affiliates. For periods after the first year, DIDI currently intends to pay
firms a service fee at a rate of up to 0.25% (calculated monthly and paid
quarterly) of the net assets attributable to Class B and Class C shares of a
fund maintained and serviced by the firm.
Firms to which service fees may be paid include affiliates of DIDI. In addition
DIDI may, from time to time, pay certain firms from it own resources additional
amounts for ongoing administrative services and assistance provided to their
customers and clients who are shareholders of a fund.
DIDI also may provide some of the above services and may retain any portion of
the fee under the Services Agreement not paid to firms to compensate itself for
shareholder or administrative functions performed for a fund. Currently, the
shareholder services fee payable to DIDI is payable at an annual rate of up to
0.25% of net assets based upon fund assets in accounts for which a firm
provides administrative services and at the annual rate of 0.15% of net assets
based upon fund assets in accounts for which there is no firm of record (other
than DIDI) listed on a fund's records. The effective shareholder services fee
rate to be charged against all assets of each fund while this procedure is in
effect will depend upon the proportion of fund assets that is held in accounts
for which a firm of record provides shareholder services. The Board of each
fund, in its discretion, may approve basing the fee to DIDI at the annual rate
of 0.25% on all fund assets in the future.
II. MONEY MARKET FUNDS (EXCEPT DWS CASH INVESTMENT TRUST CLASS A, B AND C
SHARES, WHICH ARE ADDRESSED UNDER RETAIL FUNDS ABOVE)
RULE 12B-1 PLANS. Certain Money Market Funds have adopted for certain classes
of shares a plan pursuant to Rule 12b-1 under the 1940 Act (each a Rule 12b-1
Plan) that provides for fees payable as an expense of the class that are used
by DIDI to pay for distribution services for those classes. Additionally, in
accordance with the Rule 12b-1 Plan for certain classes, shareholder and
administrative services are provided to the applicable fund for the benefit of
the relevant classes under a fund's Services Agreement with DIDI. With respect
to certain classes, shareholder and administrative services may be provided
outside of a Rule 12b-1 Plan either by DIDI pursuant to the Services Agreement
or by financial services firms under a Shareholder Services Plan. Because Rule
12b-1 fees are paid out of fund assets on an ongoing basis, they will, over
time, increase the cost of an investment and may cost more than other types of
sales charges.
The Rule 12b-1 Plans provide alternative methods for paying for distribution
services and provide compensation to DIDI or financial services firms for
post-sales servicing, which may help funds grow or maintain asset levels to
provide operational efficiencies and economies of scale. Each Rule 12b-1 Plan
is approved and reviewed separately for each such class in accordance with Rule
12b-1 under the 1940 Act, which regulates the manner in which an investment
company may, directly or indirectly, bear the expenses of distributing its
shares. A Rule 12b-1 Plan may not be amended to increase the fee to be paid by
a fund with respect to a class without approval by a majority of the
outstanding voting securities of such class of a fund.
If a Rule 12b-1 Plan is terminated in accordance with its terms, the obligation
of the applicable fund to make payments to DIDI pursuant to the Rule 12b-1 Plan
will cease and a fund will not be required to make any payments not previously
accrued past the termination date. Thus, there is no legal obligation for a
fund to pay any expenses incurred by DIDI other than fees previously accrued
and payable under a Rule 12b-1 Plan, if for any reason the Rule 12b-1 Plan is
terminated in accordance with its terms. Because the Rule 12b-1 Plans are
compensation plans, future fees under a Rule 12b-1 Plan
II-26
may or may not be sufficient to cover DIDI for its expenses incurred. On the
other hand, under certain circumstances, DIDI might collect in the aggregate
over certain periods more in fees under the applicable Rule 12b-1 Plan than it
has expended over that same period.
DISTRIBUTION AND SHAREHOLDER SERVICES
Service Shares - Cash Account Trust. The Distribution Agreement authorizes the
fund to pay DIDI, as an expense of the Service Shares classes of the Money
Market Portfolio, the Government & Agency Securities Portfolio and the
Tax-Exempt Portfolio of Cash Account Trust, a distribution services fee,
payable monthly, at an annual rate of 0.60% of average daily net assets of the
Service Shares of the applicable fund. This fee is paid pursuant to a Rule
12b-1 Plan. DIDI normally pays firms a fee for distribution and administrative
services, payable monthly, at a maximum annual rate of up to 0.60% of average
daily net assets of Service Shares held in accounts that they maintain and
service.
Premier Shares - Tax-Exempt California Money Market Fund. The Distribution
Agreement authorizes the fund to pay DIDI, as an expense of the Premier Shares
class of the Tax-Exempt California Money Market Fund, a distribution services
fee, payable monthly, at an annual rate of 0.33% of average daily net assets of
the Premier Shares of the fund. This fee is paid pursuant to a Rule 12b-1 Plan.
DIDI normally pays firms a fee for distribution and administrative services,
payable monthly, at a maximum annual rate of up to 0.33% of average daily net
assets of Premier Shares held in accounts that they maintain and service.
Tax-Exempt New York Money Market Fund - NY Tax Free Money Fund. The
Distribution Agreement authorizes the fund to pay DIDI, as an expense of
Tax-Exempt New York Money Market Fund shares, a class of NY Tax Free Money
fund, a series of DWS Advisor funds, a distribution services fee, payable
monthly, at an annual rate of 0.50% of average daily net assets of the
Tax-Exempt New York Money Market Fund shares of the fund. This fee is paid
pursuant to a Rule 12b-1 Plan. DIDI normally pays firms a fee for distribution
and administrative services, payable monthly, at a maximum annual rate of up to
0.50% of average daily net assets of Tax-Exempt New York Money Market Fund
shares held in accounts that they maintain and service.
Premium Reserve Money Market Shares - Cash Account Trust. The Services
Agreement authorizes the fund to pay DIDI, as an expense of the Premium Reserve
Money Market Shares class of the Money Market Portfolio of Cash Account Trust,
an administrative service fee, payable monthly, at an annual rate of 0.25% of
average daily net assets of the Premium Reserve Money Market Shares of the
fund. A portion of this administrative service fee (0.10% of the 0.25% fee) is
paid pursuant to a Rule 12b-1 Plan. The Premium Money Market Reserve Shares pay
the full amount authorized by the Plan as part of its 0.25% administrative
service rate. DIDI normally pays firms a fee for administrative services,
payable monthly, at a maximum annual rate of up to 0.25% of average daily net
assets of Premium Reserve Money Market Shares held in accounts that they
maintain and service.
Institutional Money Market Shares-Cash Account Trust. The Services Agreement
authorizes the fund to pay DIDI, as an expense of the Institutional Money
Market Shares class of the Money Market Portfolio of Cash Account Trust, an
administrative service fee, payable monthly, at an annual rate of 0.15% of
average daily net assets of the Institutional Money Market Shares of the fund.
A portion of this administrative service fee (0.075% of the 0.15% fee) is paid
pursuant to a Rule 12b-1 Plan. Currently, the fee is limited to 0.02% but may
be increased to the full 0.15% level by the Board. Currently, one-half of the
0.02% administrative service fee rate that is being paid by the Institutional
Money Market Shares is paid pursuant to the Rule 12b-1 Plan. DIDI normally pays
firms a fee for administrative services, payable monthly, at a maximum annual
rate of up to 0.15% (currently, limited to 0.02%) of average daily net assets
of Institutional Money Market Shares held in accounts that they maintain and
service.
Premier Money Market Shares - Cash Account Trust and Investors Cash Trust. The
Distribution Agreement authorizes a fund to pay DIDI, as an expense of the
Premier Money Market Shares classes of the Money Market Portfolio, the
Government & Agency Securities Portfolio and the Tax-Exempt Portfolio of Cash
Account Trust and of the Treasury Portfolio of Investors Cash Trust, a
distribution services fee, payable monthly, at an annual rate of 0.25% of
average daily net assets of the Premier Money Market Shares of the applicable
fund. This fee is paid pursuant to a Rule 12b-1 Plan. DIDI normally pays firms
a fee for distribution services, payable monthly, at a maximum annual rate of
up to 0.25% of average daily net assets of Premier Money Market Shares held in
accounts that they maintain and service. The Services Agreement authorizes a
fund to pay DIDI, as an expense of the Premier Money Market Shares of the
aforementioned funds, an administrative service fee, payable monthly, at an
annual rate of 0.25% of average daily net
II-27
assets of the Premier Money Market Shares of the applicable fund. This
administrative service fee is not paid pursuant to a Rule 12b-1 Plan. DIDI
normally pays firms a fee for administrative services, payable monthly, at a
maximum annual rate of up to 0.25% of average daily net assets of Premier Money
Market Shares held in accounts that they maintain and service.
Davidson Cash Equivalent Shares - Cash Account Trust. The Distribution
Agreement authorizes a fund to pay DIDI, as an expense of the Davidson Cash
Equivalent Shares and the Davidson Cash Equivalent Plus Shares classes of the
Money Market Portfolio, the Government & Agency Securities Portfolio and the
Tax-Exempt Portfolio of Cash Account Trust, a distribution services fee,
payable monthly, at an annual rate of 0.30% in the case of the Davidson Cash
Equivalent Shares and 0.25% in the case of the Davidson Cash Equivalent Plus
Shares of average daily net assets of the applicable class of a fund. This fee
is paid pursuant to a Rule 12b-1 Plan. DIDI normally pays the sole
sub-distributor for the classes, D.A. Davidson & Co., a fee for distribution
services, payable monthly, at a maximum annual rate of up to 0.30% of average
daily net assets of those accounts in the Davidson Cash Equivalent Shares that
it maintains and services and 0.25% of average daily net assets in the case of
those accounts in the Davidson Cash Equivalent Plus Shares that it maintains
and services. The Services Agreement authorizes a fund to pay DIDI, as an
expense of the aforementioned classes, an administrative service fee, payable
monthly, at an annual rate of 0.25% in the case of the Davidson Cash Equivalent
Shares and 0.25% (currently limited to 0.20%) in the case of the Davidson Cash
Equivalent Plus Shares of average daily net assets of those shares of a fund.
This administrative service fee is not paid pursuant to a Rule 12b-1 Plan. DIDI
normally pays the sole sub-distributor a fee for administrative services,
payable monthly, at a maximum annual rate of up to 0.25% of average daily net
assets of those accounts in the Davidson Cash Equivalent Shares that it
maintains and services and 0.20% of average daily net assets in the case of
those accounts in the Davidson Cash Equivalent Plus Shares that it maintains
and services. The Davidson Cash Equivalent Plus Shares class is limited to the
Money Market Portfolio and the Government & Agency Securities Portfolio.
Capital Assets Funds - Cash Account Trust. The Distribution Agreement
authorizes a fund to pay DIDI, as an expense of the Capital Assets Funds Shares
and the Capital Assets Funds Preferred Shares classes of the Money Market
Portfolio, the Government & Agency Securities Portfolio and the Tax-Exempt
Portfolio of Cash Account Trust, a distribution services fee, payable monthly,
at an annual rate of 0.33% in the case of the Capital Assets Funds Shares and
0.20% in the case of the Capital Assets Funds Preferred Shares of average daily
net assets of the applicable class of a fund. This fee is paid pursuant to a
Rule 12b-1 Plan. DIDI normally pays the sole sub-distributor for the classes,
RIDGE Clearing and Outsourcing Services, Inc., a fee for distribution services,
payable monthly, at a maximum annual rate of up to 0.33% of average daily net
assets of those accounts in the Capital Assets Funds Shares that it maintains
and services and 0.20% of average daily net assets in the case of those
accounts in the Capital Assets Funds Preferred Shares that it maintains and
services. The Services Agreement authorizes a fund to pay DIDI, as an expense
of the aforementioned classes, an administrative service fee, payable monthly,
at an annual rate of 0.25% in the case of the Capital Assets Funds Shares and
0.10% in the case of the Capital Assets Funds Preferred Shares of average daily
net assets of the applicable class of a fund. This administrative service fee
is not paid pursuant to a Rule 12b-1 Plan. DIDI normally pays the sole
sub-distributor a fee for administrative services, payable monthly, at a
maximum annual rate of up to 0.25% of average daily net assets of those
accounts in the Capital Assets Funds Shares that it maintains and services and
0.10% of average daily net assets in the case of those accounts in the Capital
Assets Funds Preferred Shares that it maintains and services. The Capital
Assets Funds Preferred Shares class is limited to the Money Market Portfolio.
Managed Shares - Cash Account Trust. The Services Agreement currently
authorizes a fund to pay DIDI, as an expense of the Government Cash Managed
Shares class of the Government & Agency Securities Portfolio of Cash Account
Trust and the Tax-Exempt Cash Managed Shares class of the Tax-Exempt Portfolio
of Cash Account Trust, an administrative service fee, payable monthly, at an
annual rate of 0.15% of average daily net assets of the Managed Shares of a
fund. This fee is paid pursuant to a Rule 12b-1 Plan. The Rule 12b-1 Plan
authorizes the payment of up to 0.25% of average daily net assets of those
shares of a fund and, at the discretion of the Board, the administrative
service fee may be increased from the current level to a maximum of 0.25% of
average daily net assets. DIDI normally pays firms a fee for administrative
services, payable monthly, at a maximum annual rate of up to 0.15% of average
daily net assets of Managed Shares held in accounts that they maintain and
service.
Institutional Shares - Investors Cash Trust. The Services Agreement authorizes
the fund to pay DIDI, as an expense of the Institutional Shares class of the
Treasury Portfolio of Investors Cash Trust, an administrative service fee,
II-28
payable monthly, at an annual rate of 0.05% of average daily net assets of the
Institutional Shares of the fund, which may be increased to 0.10% in the
discretion of the Board. This fee is not paid pursuant to a Rule 12b-1 Plan.
DIDI normally pays firms a fee for administrative services, payable monthly, at
a maximum annual rate of up to 0.05% of average daily net assets of
Institutional Shares held in accounts that they maintain and service.
Tax-Free Investment Class - Cash Account Trust and Investment Class - Investors
Cash Trust. The Distribution Agreement authorizes a fund to pay DIDI, as an
expense of the Tax-Free Investment Class of the Tax-Exempt Portfolio of Cash
Account Trust and the Investment Class of the Treasury Portfolio of Investors
Cash Trust (collectively, Investment Class), a distribution services fee,
payable monthly, at an annual rate of 0.25% of average daily net assets of the
Investment Class shares of the applicable fund. This fee is paid pursuant to a
Rule 12b-1 Plan. DIDI normally pays firms a fee for distribution services,
payable monthly, at a maximum annual rate of up to 0.25% of average daily net
assets of shares of the Investment Class held in accounts that they maintain
and service. The Services Agreement authorizes a fund to pay DIDI, as an
expense of the Investment Class of the aforementioned funds, an administrative
service fee, payable monthly, at an annual rate of 0.07% of average daily net
assets of the Investment Class shares of the applicable fund. This
administrative service fee is not paid pursuant to Rule 12b-1 Plan. DIDI
normally pays firms a fee for administrative services, payable monthly, at a
maximum annual rate of up to 0.07% of average daily net assets of shares of the
Investment Class held in accounts that they maintain and service.
Cash Reserve Prime Shares - Cash Reserve Fund, Inc. The Distribution Agreement
authorizes the fund to pay DIDI, as an expense of the Cash Reserve Prime Shares
class of the Prime Series of Cash Reserve Fund Inc., a distribution services
fee, payable monthly, at an annual rate of 0.25% of average daily net assets of
the Cash Reserve Prime Shares of the fund. This fee is paid pursuant to a Rule
12b-1 Plan. DIDI normally pays firms a fee for distribution services, payable
monthly, at a maximum annual rate of up to 0.25% of average daily net assets of
shares of the Cash Reserve Prime Shares held in accounts that they maintain and
service. The Distribution Agreement also authorizes the fund to pay DIDI, as an
expense of the Cash Reserve Prime Shares, an administrative service fee,
payable monthly, at an annual rate of 0.07% of average daily net assets of the
Cash Reserve Prime Shares of the fund. This administrative service fee is not
paid pursuant to a Rule 12b-1 Plan. DIDI normally pays firms a fee for
administrative services, payable monthly, at a maximum annual rate of up to
0.07% of average daily net assets of shares of the Cash Reserve Prime Shares
held in accounts that they maintain and service.
Shareholder Services Plan for Cash Management Fund - Institutional and Cash
Reserves Fund - Institutional, each a series of DWS Institutional Funds, and NY
Tax Free Money Fund Investment Class and Tax-Free Money Fund Investment Premier
Shares, each a series and class of DWS Advisor Funds. Each fund has adopted for
the classes specified (Class) a shareholder service plan (Plan). Under the
Plan, which is not a Rule 12b-1 Plan, a fund may pay financial services firms a
service fee at an annual rate of up to 0.25 of 1% of the average daily net
assets of shares of the Class held in accounts that the firm maintains and
services. The service fee is accrued daily as an expense of the Class. A fund
together with DIDI may enter into agreements with firms pursuant to which the
firms provide personal service and/or maintenance of shareholder accounts
including, but not limited to, establishing and maintaining shareholder
accounts and records, distributing monthly statements, processing purchase and
redemption transactions, automatic investment in fund shares of client account
cash balances, answering routine client inquiries regarding a fund, assistance
to clients in changing dividend options, account designations and addresses,
aggregating trades of all the firm's clients, providing account information to
clients in client sensitive formats and such other services as a fund may
reasonably request. Service fees are not payable for advertising, promotion or
other distribution services.
The Plan continues in effect from year to year so long as its continuance is
approved at least annually by the vote of a majority of (a) the Board, and (b)
the Board Members who are not "interested persons" of a fund and who have no
direct or indirect financial interest in the operation of the Plan, or any
related agreements. The Plan may be terminated with respect to the Class at any
time by vote of the Board, including a vote by the Board Members who are not
"interested persons" of a fund and who have no direct or indirect financial
interest in the operation of the Plan, or any related agreements. The Plan may
not be amended to increase materially the amount of service fees provided for
in the Plan unless the amendment is approved in the manner provided for annual
continuance of the Plan discussed above. If the Plan is terminated or not
renewed, a fund will not be obligated to make any payments of service fees that
accrued after the termination date.
II-29
III. DWS VARIABLE SERIES I AND DWS VARIABLE SERIES II
RULE 12B-1 PLAN. Each fund of DWS Variable Series I and DWS Variable Series II
that has authorized the issuance of Class B shares has adopted a distribution
plan under Rule 12b-1 (Plan) that provides for fees payable as an expense of
the Class B shares. Under the Plan, a fund may make quarterly payments as
reimbursement to DIDI for distribution and shareholder servicing related
expenses incurred or paid by the Distributor or a participating insurance
company. No such payment shall be made with respect to any quarterly period in
excess of an amount determined for such period at the annual rate of 0.25% of
the average daily net assets of Class B shares during that quarterly period.
The fee is payable by a fund, on behalf of Class B shares, of up to 0.25% of
the average daily net assets attributable to Class B shares of the fund.
Because 12b-1 fees are paid out of fund assets on an ongoing basis, they will,
over time, increase the cost of investment and may cost more than other types
of sales charges. The Plan and any Rule 12b-1 related agreement that is entered
into by a fund or the Distributor in connection with the Plan will continue in
effect for a period of more than one year only so long as continuance is
specifically approved at least annually by a vote of a majority of the Board,
and of a majority of the Board Members who are not interested persons (as
defined in the 1940 Act) of a fund, cast in person at a meeting called for the
purpose of voting on the Plan, or the Rule 12b-1 related agreement, as
applicable. In addition, the Plan and any Rule 12b-1 related agreement may be
terminated as to Class B shares of a fund at any time, without penalty, by vote
of a majority of the outstanding Class B shares of that fund or by vote of a
majority of the Board Members who are not interested persons of a fund and who
have no direct or indirect financial interest in the operation of the Plan or
any Rule 12b-1 related agreement. The Plan provides that it may not be amended
to increase materially the amount that may be spent for distribution of Class B
shares of a fund without the approval of Class B shareholders of that fund.
IV. DWS INVESTMENTS VIT FUNDS
RULE 12B-1 PLAN. DWS Equity 500 Index VIP and DWS Small Cap Index VIP of DWS
Investments VIT Funds have each adopted a distribution plan under Rule 12b-1
(Plan) that provides for fees payable as an expense of the Class B shares and,
in the case of the DWS Equity 500 Index VIP, the Class B-2 shares. Under the
Plan, a fund may make payments to DIDI for remittance directly or indirectly to
a participating dealer, shareholder service agent, life insurance company or
other applicable party a fee in an amount not to exceed the annual rate of
0.25% of the average daily net assets of the Class B shares or Class B-2
shares, as applicable, under a participation agreement, service agreement,
sub-distribution agreement or other similar agreement which provides for Class
B shares or Class B-2 shares. DIDI is authorized pursuant to the Plan to pay
for anything reasonably designed to enhance sales or retention of shareholders
and for the provision of services to shareholders of the Class B shares or
Class B-2 shares. Because 12b-1 fees are paid out of fund assets on an ongoing
basis, they will, over time, increase the cost of investment in Class B or
Class B-2 shares, and may cost more than other types of sales charges. The Plan
and any Rule 12b-1 related agreement that is entered into by a fund or the
Distributor in connection with the Plan will continue in effect for a period of
more than one year only so long as continuance is specifically approved at
least annually by a vote of a majority of the Board, and of a majority of the
Board Members who are not interested persons (as defined in the 1940 Act) of a
fund, cast in person at a meeting called for the purpose of voting on the Plan,
or the Rule 12b-1 related agreement, as applicable. In addition, the Plan and
any Rule 12b-1 related agreement may be terminated as to Class B shares or
Class B-2 shares of a fund at any time, without penalty, by vote of a majority
of the outstanding Class B shares or Class B-2 shares, as applicable, of that
fund or by vote of a majority of the Board Members who are not interested
persons of a fund and who have no direct or indirect financial interest in the
operation of the Plan or any Rule 12b-1 related agreement. The Plan provides
that it may not be amended to increase materially the amount that may be spent
for distribution of Class B shares or Class B-2 shares of a fund without the
approval of the shareholders of such class.
INVESTMENTS
GENERAL INVESTMENT PRACTICES AND TECHNIQUES
PART II - APPENDIX II-G includes a description of the investment practices and
techniques which a fund may employ in pursuing its investment objective, as
well as the associated risks. Descriptions in this SAI of a particular
investment practice or technique in which a fund may engage are meant to
describe the spectrum of investments that the Advisor (and/or sub-advisor or
sub-subadvisor, if applicable) in its discretion might, but is not required to,
use in managing a fund. The Advisor (and/or sub-advisor or sub-subadvisor, if
applicable) may in its discretion at any time employ such practice, technique
or instrument for one or more funds but not for all funds advised by it.
Furthermore, it is possible that certain types of financial instruments or
investment
II-30
techniques described herein may not be available, permissible, economically
feasible or effective for their intended purposes in all markets. Certain
practices, techniques or instruments may not be principal activities of the
fund, but, to the extent employed, could from time to time have a material
impact on a fund's performance.
IT IS POSSIBLE THAT CERTAIN INVESTMENT PRACTICES AND TECHNIQUES MAY NOT BE
PERMISSIBLE FOR A FUND BASED ON ITS INVESTMENT RESTRICTIONS, AS DESCRIBED
HEREIN, AND IN A FUND'S PROSPECTUS.
PORTFOLIO TRANSACTIONS
The Advisor is generally responsible for placing orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages a fund's
investments, references in this section to the "Advisor" should be read to mean
the Subadvisor, except as noted below.
The policy of the Advisor in placing orders for the purchase and sale of
securities for a fund is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities
to execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the funds
to reported commissions paid by others. The Advisor routinely reviews
commission rates, execution and settlement services performed and makes
internal and external comparisons.
Commission rates on transactions in equity securities on US securities
exchanges are subject to negotiation. Commission rates on transactions in
equity securities on foreign securities exchanges are generally fixed.
Purchases and sales of fixed-income securities and certain over-the-counter
securities are effected on a net basis, without the payment of brokerage
commissions. Transactions in fixed income and certain over-the-counter
securities are generally placed by the Advisor with the principal market makers
for these securities unless the Advisor reasonably believes more favorable
results are available elsewhere. Transactions with dealers serving as market
makers reflect the spread between the bid and asked prices. Purchases of
underwritten issues will include an underwriting fee paid to the underwriter.
Money market instruments are normally purchased in principal transactions
directly from the issuer or from an underwriter or market maker.
It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the funds
to their customers. However, the Advisor does not consider sales of shares of
the funds as a factor in the selection of broker-dealers to execute portfolio
transactions for the funds and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the funds as a factor in the selection of broker-dealers to execute
portfolio transactions for the funds.
The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended (1934 Act), when placing portfolio transactions for a fund, to
cause a fund to pay brokerage commissions in excess of that which another
broker-dealer might charge for executing the same transaction in order to
obtain research and brokerage services if the Advisor determines that such
commissions are reasonable in relation to the overall services provided. The
Advisor may from time to time, in reliance on Section 28(e) of the 1934 Act,
execute portfolio transactions with broker-dealers that provide research and
brokerage services to the Advisor. Consistent with the Advisor's policy
regarding best execution, where more than one broker is believed to be capable
of providing best execution for a particular trade, the Advisor may take into
consideration the receipt of research and brokerage services in selecting the
broker-dealer to execute the trade. Although certain research and brokerage
services from broker-dealers may be useful to a fund and to the Advisor, it is
the opinion of the Advisor that such information only supplements its own
research effort since the information must still be analyzed, weighed and
reviewed by the Advisor's staff. To the extent that research and brokerage
services of value are received by the Advisor, the Advisor may avoid expenses
that it might otherwise incur. Research and brokerage services received from a
broker-dealer may be useful to the Advisor and its affiliates in providing
investment management services to all or some of its clients, which includes a
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fund. Services received from broker-dealers that executed securities
transactions for a fund will not necessarily be used by the Advisor
specifically to service that fund.
Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services
are typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.
The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.
Research and brokerage services may include products obtained from third
parties if the Advisor determines that such product or service constitutes
brokerage and research as defined in Section 28(e) and interpretations
thereunder. Provided a Subadvisor is acting in accordance with any instructions
and directions of the Advisor or the Board, the Subadvisor is authorized to pay
to a broker or dealer who provides third party brokerage and research services
a commission for executing a portfolio transaction for a fund in excess of what
another broker or dealer may charge, if the Subadvisor determines in good faith
that such commission was reasonable in relation to the value of the third party
brokerage and research services provided by such broker or dealer.
The Advisor may use brokerage commissions to obtain certain brokerage products
or services that have a mixed use (i.e., it also serves a function that does
not relate to the investment decision-making process). In those circumstances,
the Advisor will make a good faith judgment to evaluate the various benefits
and uses to which it intends to put the mixed use product or service and will
pay for that portion of the mixed use product or service that it reasonably
believes does not constitute research and brokerage services with its own
resources.
The Advisor will monitor regulatory developments and market practice in the use
of client commissions to obtain research and brokerage services and may adjust
its portfolio transactions policies in response thereto.
Investment decisions for a fund and for other investment accounts managed by
the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more
of such accounts. In such cases, simultaneous transactions are inevitable. To
the extent permitted by law, the Advisor may aggregate the securities to be
sold or purchased for a fund with those to be sold or purchased for other
accounts in executing transactions. Purchases or sales are then averaged as to
price and commission and allocated as to amount in a manner deemed equitable to
each account. While in some cases this practice could have a detrimental effect
on the price paid or received by, or on the size of the position obtained or
disposed of for, a fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to a fund.
The Advisor and its affiliates and each fund's management team manage other
mutual funds and separate accounts, some of which use short sales of securities
as a part of its investment strategy. The simultaneous management of long and
short portfolios creates potential conflicts of interest including the risk
that short sale activity could adversely affect the market value of the long
positions (and vice versa), the risk arising from sequential orders in long and
short positions, and the risks associated with receiving opposing orders at the
same time. The Advisor has adopted procedures that it believes are reasonably
designed to mitigate these potential conflicts of interest. Incorporated in the
procedures are specific guidelines developed to ensure fair and equitable
treatment for all clients. The Advisor and the investment team have established
monitoring procedures and a protocol for supervisory reviews, as well as
compliance oversight to ensure that potential conflicts of interest relating to
this type of activity are properly addressed.
Deutsche Bank AG or one of its affiliates (or in the case of a Subadvisor, the
Subadvisor or one of its affiliates) may act as a broker for the funds and
receive brokerage commissions or other transaction-related compensation from
the funds in the purchase and sale of securities, options or futures contracts
when, in the judgment of
II-32
the Advisor, and in accordance with procedures approved by the Board, the
affiliated broker will be able to obtain a price and execution at least as
favorable as those obtained from other qualified brokers and if, in the
transaction, the affiliated broker charges the funds a rate consistent with
that charged to comparable unaffiliated customers in similar transactions.
PORTFOLIO TURNOVER. Portfolio turnover rate is defined by the SEC as the ratio
of the lesser of sales or purchases to the monthly average value of such
securities owned during the year, excluding all securities whose remaining
maturities at the time of acquisition were one year or less.
Higher levels of activity by a fund result in higher transaction costs and may
also result in taxes on realized capital gains to be borne by a fund's
shareholders. Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet a fund's objective.
PORTFOLIO HOLDINGS INFORMATION
In addition to the public disclosure of fund portfolio holdings through
required Securities and Exchange Commission (SEC) quarterly filings, each fund
may make its portfolio holdings information publicly available on the DWS
funds' Web site as described in a fund's prospectus. Each fund does not
disseminate non-public information about portfolio holdings except in
accordance with policies and procedures adopted by a fund.
Each fund's procedures permit non-public portfolio holdings information to be
shared with Deutsche Asset Management and its affiliates (DeAM), subadvisors,
if any, custodians, independent registered public accounting firms, attorneys,
officers and trustees/directors and each of their respective affiliates and
advisers who require access to this information to fulfill their duties to the
fund and are subject to the duties of confidentiality, including the duty not
to trade on non-public information, imposed by law or contract, or by a fund's
procedures. This non-public information may also be disclosed, subject to the
requirements described below, to certain third parties, such as securities
lending agents, financial printers, proxy voting firms, mutual fund analysts
and rating and tracking agencies, or to shareholders in connection with in-kind
redemptions (Authorized Third Parties).
Prior to any disclosure of a fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by the Board must make a good
faith determination in light of the facts then known that a fund has a
legitimate business purpose for providing the information, that the disclosure
is in the best interest of a fund, and that the recipient assents or otherwise
has a duty to keep the information confidential and to not trade based on the
information received while the information remains non-public. No compensation
is received by a fund or DeAM for disclosing non-public holdings information.
Periodic reports regarding these procedures will be provided to the Board.
Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about a fund and
information derived therefrom, including, but not limited to, how the fund's
investments are divided among various sectors, industries, countries, value and
growth stocks, bonds, small, mid and large cap stocks, currencies and cash,
types of bonds, bond maturities, duration, bond coupons and bond credit quality
ratings, alpha, beta, tracking error, default rate, portfolio turnover, and
risk and style characteristics so long as the identity of the fund's holdings
could not be derived from such information.
Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor the
Board exercise control over such policies. In addition, separate account
clients of DeAM have access to their portfolio holdings and are not subject to
a fund's portfolio holdings disclosure policy. The portfolio holdings of some
of the funds subadvised by DeAM and some of the separate accounts managed by
DeAM may substantially overlap with the portfolio holdings of a fund.
DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of a fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.
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There is no assurance that a fund's policies and procedures with respect to the
disclosure of portfolio holdings information will protect the fund from the
potential misuse of portfolio holdings information by those in possession of
that information.
NET ASSET VALUE
APPLICABLE TO FUNDS OTHER THAN MONEY MARKET FUNDS. The net asset value per
share of a fund is normally computed as of the close of regular trading on the
New York Stock Exchange (Exchange) on each day the Exchange is open for trading
(Value Time). The Exchange is scheduled to be closed on the following holidays:
New Year's Day (except 2011), Dr. Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas, and on the preceding Friday or subsequent Monday when one of these
holidays falls on a Saturday or Sunday, respectively. Net asset value per share
is determined separately for each class of shares by dividing the value of the
total assets of the fund attributable to the shares of that class, less all
liabilities attributable to that class, by the total number of shares of that
class outstanding. The per share net asset value may be lower for certain
classes of the fund because of higher expenses borne by these classes.
An equity security is valued at its most recent sale price on the security's
primary exchange or over-the-counter (OTC) market as of the Value Time. Lacking
any sales, the security is valued at the calculated mean between the most
recent bid quotation and the most recent asked quotation (Calculated Mean) on
such exchange or OTC market as of the Value Time. If it is not possible to
determine the Calculated Mean, the security is valued at the most recent bid
quotation on such exchange or OTC market as of the Value Time. In the case of
certain foreign exchanges or OTC markets, the closing price reported by the
foreign exchange or OTC market (which may sometimes be referred to by the
exchange or one or more pricing agents as the "official close" or the "official
closing price" or other similar term) will be considered the most recent sale
price.
Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued
at prices supplied by an approved pricing agent (which are intended to reflect
the mean between the bid and asked prices), if available, and otherwise at the
mean of the most recent bid and asked quotations or evaluated prices, as
applicable, based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors, including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of the most recent
bid and asked quotations or evaluated prices obtained from a broker-dealer.
Other debt securities are valued at prices supplied by an approved pricing
agent, if available, and otherwise at the most recent bid quotation or
evaluated price, as applicable, obtained from one or more broker-dealers. If it
is not possible to value a particular debt security pursuant to the above
methods, the security is valued on the basis of factors including (but not
limited to) maturity, coupon, creditworthiness, currency denomination, and the
movement of the market in which the security is normally traded.
An exchange-traded option contract on securities, currencies and other
financial instruments is valued at its most recent sale price on the relevant
exchange. Lacking any sales, the option contract is valued at the Calculated
Mean. If it is not possible to determine the Calculated Mean, the option
contract is valued at the most recent bid quotation in the case of a purchased
option contract or the most recent asked quotation in the case of a written
option contract, in each case as of the Value Time. An option contract on
securities, currencies and other financial instruments traded in the OTC market
is valued as of the Value Time at the evaluated price provided by the
broker-dealer with which it was traded. Futures contracts (and options thereon)
are valued at the most recent settlement price, if available, on the exchange
on which they are traded most extensively. With the exception of stock index
futures contracts which trade on the Chicago Mercantile Exchange, closing
settlement times are prior to the close of trading on the Exchange. For stock
index futures contracts which trade on the Chicago Mercantile Exchange, closing
settlement prices are normally available at approximately 4:20 pm Eastern time.
If no settlement price is available, the last traded price on such exchange
will be used.
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If market quotations for a fund asset are not readily available or if the
Advisor believes that the value of a fund asset as determined in accordance
with Board-approved procedures is unreliable, the value of the fund asset is
taken to be an amount which, in the opinion of a fund's Pricing Committee (or,
in some cases, the Board's Valuation Committee), represents fair market value.
The value of other holdings is determined in a manner which is intended to
fairly reflect the fair market value of the asset on the valuation date, based
on valuation procedures adopted by the Board and overseen primarily by a fund's
Pricing Committee.
The following paragraph applies to: DWS Life Compass Retirement Fund, DWS Life
Compass 2015 Fund, DWS Life Compass 2020 Fund, DWS Life Compass 2030 Fund, DWS
Life Compass 2040 Fund, DWS Alternative Asset Allocation Plus Fund, DWS Select
Alternative Asset Allocation Fund and DWS Alternative Asset Allocation Plus
VIP. The net asset value of each Underlying DWS Fund is determined based upon
the nature of the securities as set forth in the prospectus and statement of
additional information of such Underlying DWS Fund. Shares of each Underlying
DWS Fund in which the fund may invest are valued at the net asset value per
share of each Underlying DWS Fund as of the close of regular trading on the
Exchange on each day the Exchange is open for trading. The net asset value per
share of the Underlying DWS Funds will be calculated and reported to the fund
by each Underlying DWS Fund's accounting agent.
The following additional paragraphs apply to: DWS Equity 500 Index Fund and DWS
S&P 500 Index Fund (feeder funds). Each feeder fund pursues its investment
objective by investing substantially all of its assets in a master portfolio -
the DWS Equity 500 Index Portfolio (Portfolio), which has the same investment
objective and is subject to the same investment risks as the feeder fund.
Net asset value per share of a feeder fund is determined as of the Value Time
separately for each class of shares by dividing the value of the total assets
of the feeder fund (i.e., the value of the feeder fund's investment in the
Portfolio and any other assets) attributable to the shares of that class, less
all liabilities attributable to that class, by the total number of shares of
that class outstanding.
As of the Value Time, the Portfolio determines its net value (i.e., the value
of the Portfolio's portfolio instruments and any other assets less all
liabilities) using the valuation procedures for securities and other assets
described above.
Each investor in the Portfolio, including a feeder fund, may add to or reduce
its investment in the Portfolio on each day that net asset value of the feeder
fund and the Portfolio are computed as described above. At the close of a Value
Time, the value of each investor's beneficial interest in the Portfolio will be
determined by multiplying the net value of the Portfolio, determined as
provided above, by the percentage, effective for that day, which represents
that investor's share of the aggregate beneficial interests in the Portfolio.
Any additions or withdrawals, which are to be effected as of the Value Time on
that day, will then be effected. The percentage of the aggregate beneficial
interests in the Portfolio held by each investor in the Portfolio, including a
feeder fund, will then be recomputed as the percentage equal to the fraction
(i) the numerator of which is the value of the investor's investment in the
Portfolio as of the Value Time on such day plus or minus, as the case may be,
the amount of net additions to or withdrawals from such investor's investment
in the Portfolio effected as of the Value Time on such day, and (ii) the
denominator of which is the aggregate net value of the Portfolio, determined as
provided above, as of the Value Time on such day plus or minus, as the case may
be, the amount of net additions to or withdrawals from the aggregate
investments in the Portfolio by all investors, including the feeder fund, in
the Portfolio. The percentage so determined for a feeder fund will then be
applied to determine the value of the feeder fund's interest in the Portfolio
as of the Value Time on the following day that net asset value is determined.
Applicable to money market funds other than DWS Money Market Series, Cash
Management Fund-Institutional, Cash Reserves Fund-Institutional and Prime
Series. The net asset value (NAV) per share of a fund is calculated on each day
(Valuation Day) on which the fund is open for business as of the time described
in the fund's prospectus. A fund is open for business each day the New York
Stock Exchange (Exchange) is open for trading, and the fund may, but is not
required to, accept certain types of purchase and redemption orders (not
including exchanges) on days that the Exchange is not open or beyond an early
Exchange closing time, as described in the fund's prospectus. The Exchange is
scheduled to be closed on the following holidays: New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas, and on the preceding Friday or
subsequent Monday when one of these holidays falls on a Saturday or Sunday,
respectively. Net asset value per share is determined separately for each class
of shares by dividing the value of the total assets of the fund attributable to
the shares of that class, less all liabilities attributable to that
II-35
class, by the total number of shares of that class outstanding. Although there
is no guarantee, a fund's NAV per share will normally be $1.00.
A fund values its portfolio instruments at amortized cost, which does not take
into account unrealized capital gains or losses. This involves initially
valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price the
fund would receive if it sold the instrument.
The Board has established procedures reasonably designed to stabilize a fund's
NAV per share at $1.00. Under the procedures, the Advisor will monitor and
notify the Board of circumstances where a fund's NAV per share calculated by
using market valuations may deviate from the $1.00 per share calculated using
amortized cost. If there were any deviation that the Board believed would
result in a material dilution or unfair result for investors or existing
shareholders, the Board would promptly consider what action, if any, should be
initiated. Such actions could include selling assets prior to maturity to
realize capital gains or losses; shortening the average maturity of a fund's
portfolio; adjusting the level of dividends; redeeming shares in kind; or
valuing assets based on market valuations. For example, if a fund's net asset
value per share (computed using market values) declined, or was expected to
decline, below $1.00 (computed using amortized cost), the fund might
temporarily reduce or suspend dividend payments in an effort to maintain the
net asset value at $1.00 per share. As a result of such reduction or suspension
of dividends or other action by the Board, an investor would receive less
income during a given period than if such a reduction or suspension had not
taken place. Such action could result in investors receiving no dividend for
the period during which they hold their shares and receiving, upon redemption,
a price per share lower than that which they paid. On the other hand, if a
fund's net asset value per share (computed using market values) were to
increase, or were anticipated to increase above $1.00 (computed using amortized
cost), a fund might supplement dividends in an effort to maintain the net asset
value at $1.00 per share.
Market valuations are obtained by using actual quotations provided by market
makers, estimates of market value, or values obtained from yield data relating
to classes of money market instruments published by reputable sources at the
mean between the bid and asked prices for the instruments. In accordance with
procedures approved by the Board, in the event market quotations are not
readily available for certain portfolio assets the fair value of such portfolio
assets will be determined in good faith by a fund's Pricing Committee (or, in
some cases, the Board's Valuation Committee) based upon input from the Advisor
or other third parties.
Applicable to the following money market funds (each, a fund): DWS Money Market
Series, Cash Management Fund-Institutional, Cash Reserves Fund-Institutional
and Prime Series. Each of these funds pursues its investment objective by
investing substantially all of its assets in a master portfolio - the Cash
Management Portfolio (Portfolio), which has the same investment objective and
is subject to the same investment risks as a fund. The net asset value (NAV)
per share of a fund is calculated on each day (Valuation Day) on which a fund
is open for business as of the time described in a fund's prospectus. The fund
is open for business each day the New York Stock Exchange (Exchange) is open
for trading, and the fund may, but is not required to, accept certain types of
purchase and redemption orders (not including exchanges) on days that the
Exchange is not open or beyond an early Exchange closing time, as described in
a fund's prospectus. The Exchange is scheduled to be closed on the following
holidays: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas, and on the preceding Friday or subsequent Monday when one of these
holidays falls on a Saturday or Sunday, respectively. Net asset value per share
is determined separately for each class of shares by dividing the value of the
total assets of the fund (i.e., the value of a fund's investment in the
Portfolio and any other assets) attributable to the shares of that class, less
all liabilities attributable to that class, by the total number of shares of
that class outstanding. Although there is no guarantee, a fund's NAV per share
will normally be $1.00.
On each Valuation Day, the Portfolio determines its net value (i.e., the value
of the Portfolio's portfolio instruments and any other assets less all
liabilities). The Portfolio values its portfolio instruments at amortized cost,
which does not take into account unrealized capital gains or losses. This
involves initially valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value,
II-36
as determined by amortized cost, is higher or lower than the price the
Portfolio would receive if it sold the instrument.
Each investor in the Portfolio, including a fund, may add to or reduce its
investment in the Portfolio on each Valuation Day. At the close of each such
Valuation Day, the value of each investor's beneficial interest in the
Portfolio will be determined by multiplying the net value of the Portfolio, as
determined by amortized cost, by the percentage, effective for that day, which
represents that investor's share of the aggregate beneficial interests in the
Portfolio. Any additions or withdrawals, which are to be effected as of the
close of business on that day, will then be effected. The percentage of the
aggregate beneficial interests in the Portfolio held by each investor in the
Portfolio, including a fund will then be recomputed as the percentage equal to
the fraction (i) the numerator of which is the value of the investor's
investment in the Portfolio as of the close of business on such day plus or
minus, as the case may be, the amount of net additions to or withdrawals from
such investor's investment in the Portfolio effected as of the close of
business on such day, and (ii) the denominator of which is the aggregate net
value of the Portfolio, as determined by amortized cost, as of the close of
business on such day plus or minus, as the case may be, the amount of net
additions to or withdrawals from the aggregate investments in the Portfolio by
all investors, including a fund, in the Portfolio. The percentage so determined
for a fund will then be applied to determine the value of a fund's interest in
the Portfolio as of the close of the following Valuation Day.
The Board has established procedures reasonably designed to stabilize a fund's
NAV per share at $1.00. Under the procedures, the Advisor will monitor and
notify the Board of circumstances where a fund's NAV per share calculated based
on valuing the fund's investment in the Portfolio and the fund's other assets
using market valuations may deviate from the $1.00 per share calculated based
on valuing a fund's investment in the Portfolio and a fund's other assets using
amortized cost. If there were any deviation that the Board believed would
result in a material dilution or unfair result for investors or existing
shareholders, the Board would promptly consider what action, if any, should be
initiated. Such actions could include selling assets prior to maturity to
realize capital gains or losses; shortening average maturity of the investment
portfolio; adjusting the level of dividends; redeeming shares in kind; or
valuing assets based on market valuations. For example, if a fund's net asset
value per share (computed using market values) declined, or was expected to
decline, below $1.00 (computed using amortized cost), the fund might
temporarily reduce or suspend dividend payments in an effort to maintain the
net asset value at $1.00 per share. As a result of such reduction or suspension
of dividends or other action by the Board, an investor would receive less
income during a given period than if such a reduction or suspension had not
taken place. Such action could result in investors receiving no dividend for
the period during which they hold their shares and receiving, upon redemption,
a price per share lower than that which they paid. On the other hand, if a
fund's net asset value per share (computed using market values) were to
increase, or were anticipated to increase above $1.00 (computed using amortized
cost), a fund might supplement dividends in an effort to maintain the net asset
value at $1.00 per share. Because a fund invests substantially all of its
assets in the Portfolio, certain of these actions could be implemented at the
Portfolio level at the discretion of its Board.
Market valuations are obtained by using actual quotations provided by market
makers, estimates of market value, or values obtained from yield data relating
to classes of money market instruments published by reputable sources at the
mean between the bid and asked prices for the instruments. In accordance with
procedures approved by the Board, in the event market quotations are not
readily available for certain portfolio assets the fair value of such portfolio
assets will be determined in good faith by the Portfolio's Pricing Committee
(or, in some cases, the Board's Valuation Committee) based upon input from the
Advisor or other third parties.
PROXY VOTING GUIDELINES
Each fund has delegated proxy voting responsibilities to the Advisor, subject
to the Board's general oversight. A fund has delegated proxy voting to the
Advisor with the direction that proxies should be voted consistent with the
fund's best economic interests. The Advisor has adopted its own Proxy Voting
Policies and Procedures (Policies), and Proxy Voting Guidelines (Guidelines)
for this purpose. The Policies address, among other things, conflicts of
interest that may arise between the interests of a fund, and the interests of
the Advisor and its affiliates, including a fund's principal underwriter. The
Policies are included in PART II - APPENDIX II-I.
You may obtain information about how a fund voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
Securities and Exchange Commission's Web site at www.sec.gov or by visiting our
Web site at: www.dws-investments.com (click on "proxy voting" at the bottom of
the page).
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MISCELLANEOUS
A fund's prospectuses and this SAI omit certain information contained in the
Registration Statement which a fund has filed with the SEC under the Securities
Act of 1933 and reference is hereby made to the Registration Statement for
further information with respect to a fund and the securities offered hereby.
This Registration Statement and its amendments are available for inspection by
the public at the SEC in Washington, D.C.
RATINGS OF INVESTMENTS
BONDS AND COMMERCIAL PAPER RATINGS
Set forth below are descriptions of ratings which represent opinions as to the
quality of the securities. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.
MOODY'S INVESTORS SERVICE, INC.'S LONG-TERM RATINGS
AAA: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
AA: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA: Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safe-guarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
CON.: Bonds for which the security depends upon the completion of some act or
the fulfillment of some condition are rated conditionally.
NOTE: Moody's applies numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of its generic rating category.
MOODY'S INVESTORS SERVICE, INC.'S PREFERRED STOCK RATINGS
Because of the fundamental differences between preferred stocks and bonds,
Moody's employs a variation of our familiar bond rating symbols in the quality
ranking of preferred stock.
These symbols, presented below, are designed to avoid comparison with bond
quality in absolute terms. It should always be borne in mind that preferred
stock occupies
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a junior position to bonds within a particular capital structure and that these
securities are rated within the universe of preferred stocks.
AAA: An issue rated aaa is considered to be a top-quality preferred stock. This
rating indicates good asset protection and the least risk of dividend
impairment within the universe of preferred stocks.
AA: An issue rated aa is considered a high-grade preferred stock. This rating
indicates that there is a reasonable assurance the earnings and asset
protection will remain relatively well maintained in the foreseeable future.
A: An issue rated a is considered to be an upper-medium-grade preferred stock.
While risks are judged to be somewhat greater than in the aaa and aa
classifications, earnings and asset protection are, nevertheless, expected to
be maintained at adequate levels.
BAA: An issue rated baa is considered to be a medium-grade preferred stock,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present, but may be questionable over any great length of
time.
BA: An issue rated ba is considered to have speculative elements. Its future
cannot be considered well assured. Earnings and asset protection may be very
moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.
B: An issue rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of
the issue over any long period of time may be small.
CAA: An issue rated caa is likely to be in arrears on dividend payments. This
rating designation does not purport to indicate the future status of payments.
CA: An issue rated ca is speculative in a high degree and is likely to be in
arrears on dividends with little likelihood of eventual payments.
C: This is the lowest-rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever attaining
any real investment standing.
NOTE: As in the case of bond ratings, Moody's applies to preferred stock
ratings the numerical modifiers 1, 2, and 3 in rating classifications aa
through b. The modifier 1 indicates that the security ranks in the higher end
of its generic rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
MOODY'S INVESTORS SERVICE, INC.'S SHORT-TERM RATINGS
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
PRIME-1 OR P-1: (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 or P-1 repayment
ability will often be evidenced by many of the following characteristics:
o Leading market positions in well established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
o Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
o Well established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 OR P-2: (or supporting institutions) have a strong ability for
repayment of short term debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected
by external conditions. Ample alternate liquidity is maintained.
PRIME-3 OR P-3: (or supporting institutions) have an acceptable ability for
repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt
protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
NOT PRIME: Do not fall within any of the Prime rating categories.
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MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL SHORT-TERM RATINGS
There are four rating categories for state and municipal short-term obligations
that define an investment grade situation: MIG 1, MIG 2, MIG 3, and MIG 4 (or
VMIG 1, VMIG 2, VMIG 3, and VMIG 4 in the case of an issue having a variable
rate demand feature).
MIG 1 OR VMIG 1: Judged to be of the best quality.
MIG 2 OR VMIG 2: Judged to be of the high quality, with margins or protection
ample although not as large as in the preceding group.
MIG 3 OR VMIG 3: Judged to be of favorable quality, with all security elements
accounted for but lacking the strength of the preceding grades. Liquidity and
cash flow protection may be narrow and market access for refinancing is likely
to be less well established.
MIG4 OR VMIG 4: Judged to be of adequate quality.
SG: Denotes speculative quality.
STANDARD & POOR'S RATINGS SERVICES LONG-TERM RATINGS
INVESTMENT GRADE
AAA: Debt rated AAA has the highest rating assigned by S&P to a debt
obligation. Capacity to meet its financial commitment on the debt is extremely
strong.
AA: Debt rated AA has a very strong capacity to meet its financial commitment
and differs from the higher rated issues only in small degree.
A: Debt rated A has a strong capacity to meet its financial commitment,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB: Debt rated BBB has an adequate capacity to meet its financial commitment.
Whereas it normally exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to meet its financial commitment.
SPECULATIVE GRADE
Debt rated BB, B, CCC, CC, and C has significant speculative characteristics
with respect to meeting its financial commitment. BB indicates the least degree
of speculation and C the highest. While such debt will likely have some quality
and protective characteristics, these may be outweighed by large uncertainties
or major exposures to adverse conditions.
BB: Debt rated BB has less vulnerability to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to inadequate
capacity to meet its financial commitment.
B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet its financial commitment. Adverse business, financial, or
economic conditions will likely impair capacity or willingness to meet its
financial commitment.
CCC: Debt rated CCC is currently vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet its
financial commitment. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to meet its financial
commitment.
CC: Debt rated CC is currently high vulnerability to default.
C: Debt rated C is currently highly vulnerable to nonpayment, obligations that
have payment arrearages allowed by the terms of the documents, or obligations
of an issuer that is the subject of a bankruptcy petition or similar action
which have not experienced a payment default. Among others, the C rating may be
assigned to subordinated debt, preferred stock or other obligations on which
cash payments have been suspended in accordance with the instrument's terms.
D: Debt rated D is in payment default. The D rating category is used when
payments are not made on the date due even if the applicable grace period has
not expired, unless Standard & Poor's believes that such payments will be made
during such grace period. The D rating also will be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
R: Debt rated "R" is under regulatory supervision owing to its financial
condition. During the pendency of the regulatory supervision, the regulators
may have the power to favor one class of obligations over others or pay some
obligations and not others.
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NR: Debt may lack a S&P rating because no rating has been requested, because
there is insufficient information on which to base a rating, or because S&P
does not rate a particular type of obligation as a matter of policy.
STANDARD & POOR'S RATINGS SERVICES SHORT-TERM RATINGS
A-1: This highest category indicates a strong capacity to meet its financial
commitment. Those obligors determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.
A-2: Capacity to meet its financial commitment is satisfactory. However, its
ability to meet its financial commitment is somewhat more susceptible to
adverse effects of changes in circumstances and economic conditions.
A-3: Issues carrying this designation have adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity to meet its financial commitment.
B: Obligations are regarded as having significant speculative characteristics.
Ratings of `B-1', `B-2' and `B-3' may be assigned to indicate finer
distinctions within the `B' category. The obligor currently has the capacity to
meet its financial commitment on the obligation; however, it faces major
ongoing uncertainties which could lead to the obligor's inadequate capacity to
meet its financial commitment on the obligation.
B-1: Obligations are regarded as having significant speculative
characteristics, but the obligor has a relatively stronger capacity to meet its
financial commitments over the short-term compared to other speculative-grade
obligors.
B-2: An obligation is regarded as having significant speculative
characteristics, and the obligor has an average speculative-grade capacity to
meet its financial commitments over the short-term compared to other
speculative-grade obligors.
B-3: An obligation is regarded as having significant speculative
characteristics, and the obligor has a relatively weaker capacity to meet its
financial commitments over the short-term compared to other speculative-grade
obligors.
C: An obligation is currently vulnerable to nonpayment and is dependent upon
favorable business, financial, and economic conditions for the obligor to meet
its financial commitment on the obligation.
D: An obligation rated `D' is in payment default. The `D' rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The `D' rating also will be used upon
the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.
STANDARD & POOR'S RATINGS SERVICES MUNICIPAL SHORT-TERM RATINGS
SP-1: Reflects a very strong or strong capacity to pay principal and interest.
Notes issued with "overwhelming safety characteristics" will be rated "SP-1+".
SP-2: Reflects a satisfactory capacity to pay principal and interest.
SP-3: Reflects a speculative capacity to pay principal and interest.
DUAL RATINGS
S&P assigns "dual" ratings to all debt issues that have a put option or demand
feature as part of their structure. The first rating addresses the likelihood
of repayment of principal and interest as due, and the second rating addresses
only the demand feature. The long-term rating symbols are used for bonds to
denote the long-term maturity and the short-term rating symbols for the put
option (for example, `AAA/A-1+'). With U.S. municipal short-term demand debt,
S&P note rating symbols are used with the short-term issue credit rating
symbols (for example, `SP-1+/A-1+').
FITCH INVESTORS SERVICE, INC. LONG-TERM RATINGS
INVESTMENT GRADE
AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as
II-41
strong as bonds rated AAA. Bonds rated in the AAA and AA categories are not
significantly vulnerable to foreseeable events.
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of good credit quality. The
obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however,
are more likely to have adverse impact on these bonds, and therefore, impair
timely payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
SPECULATIVE
BB: Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business or financial alternatives may be available which could assist the
obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic activity throughout
the life of the issue.
CCC, CC, C: High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.
DDD, DD, AND D: Bonds are in default of interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. DDD
represents the highest potential for recovery on these bonds, and D represents
the lowest potential for recovery.
PLUS (+) OR MINUS (-): The ratings from AA to CC may be appended by the
addition of a plus or minus sign to denote the relative status within the
rating category.
CONDITIONAL: A conditional rating is premised on the successful completion of a
project or the occurrence of a specific event.
NR: Indicates that Fitch Rating does not publicly rate the specific issue.
FITCH INVESTORS SERVICE, INC. SHORT-TERM RATINGS
F1: Highest credit quality. Indicates the Best capacity for timely payment of
financial commitments; may have an added "+" to denote any exceptionally strong
credit feature.
F2: Good Credit Quality. Issues assigned this rating have a satisfactory
capacity for timely payment, but the margin of safety is not as great as the
F-1+ and F-1 categories.
F3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the capacity for timely payment is adequate; however, near-term
adverse changes could cause these securities to be rated below investment
grade.
B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.
C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.
D: Default. Denotes actual or imminent payment default.
FITCH INVESTORS SERVICE, INC. MUNICIPAL SHORT-TERM RATINGS
The highest ratings for state and municipal short-term obligations are "F-1+,"
"F-1," and "F-2."
STANDARD & POOR'S DIVIDEND RANKINGS FOR COMMON STOCKS
The investment process involves assessment of various factors - such as product
and industry position, corporate resources and financial policy - with results
that make some common stocks more highly esteemed than others. In this
assessment, Standard & Poor believes that earnings and dividend performance is
the end result of the interplay of these factors and that, over the long run,
the record of this performance has a considerable bearing on relative quality.
The rankings, however, do not pretend to reflect all of the factors, tangible
or intangible, that bear on stock quality.
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Relative quality of bonds or other debt, that is, degrees of protection for
principal and interest, called creditworthiness, cannot be applied to common
stocks, and therefore rankings are not to be confused with bond quality ratings
which are arrived at by a necessarily different approach.
Growth and stability of earnings and dividends are deemed key elements in
establishing Standard & Poor's earnings and dividend rankings for common
stocks, which are designed to capsulize the nature of this record in a single
symbol. It should be noted, however, that the process also takes into
consideration certain adjustments and modifications deemed desirable in
establishing such rankings.
The point of departure in arriving at these rankings is a computerized scoring
system based on per-share earnings and dividend records of the most recent ten
years - a period deemed long enough to measure significant time segments of
secular growth, to capture indications of basic change in trend as they
develop, and to encompass the full peak-to-peak range of the business cycle.
Basic scores are computed for earnings and dividends, then adjusted as
indicated by a set of predetermined modifiers for growth, stability within
long-term trend, and cyclicality. Adjusted scores for earnings and dividends
are then combined to yield a final score.
Further, the ranking system makes allowance for the fact that, in general,
corporate size imparts certain recognized advantages from an investment
standpoint. Conversely, minimum size limits (in terms of corporate sales
volume) are set for the various rankings, but the system provides for making
exceptions where the score reflects an outstanding earnings-dividend record.
The final score for each stock is measured against a scoring matrix determined
by analysis of the scores of a large and representative sample of stocks. The
range of scores in the array of this sample has been aligned with the following
ladder of rankings:
A+ Highest B+ Average C Lowest
A High B Below Average D In Reorganization
A- Above Average B- Lower
NR signifies no ranking because of insufficient data or because the stock is
not amenable to the ranking process.
The positions as determined above may be modified in some instances by special
considerations, such as natural disasters, massive strikes, and non-recurring
accounting adjustments. A ranking is not a forecast of future market price
performance, but is basically an appraisal of past performance of earnings and
dividends, and relative current standing. These rankings must not be used as
market recommendations; a high-score stock may at times be so overpriced as to
justify its sale, while a low-score stock may be attractively priced for
purchase. Rankings based upon earnings and dividend records are no substitute
for complete analysis. They cannot take into account potential effects of
management changes, internal company policies not yet fully reflected in the
earnings and dividend record, public relations standing, recent competitive
shifts, and a host of other factors that may be relevant to investment status
and decision.
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PART II: APPENDIX II-A - BOARD MEMBERS AND OFFICERS
IDENTIFICATION AND BACKGROUND
The following table presents certain information regarding the Board Members of
the Trust/Corporation. Each Board Member's year of birth is set forth in
parentheses after his or her name. Unless otherwise noted, (i) each Board
Member has engaged in the principal occupation(s) noted in the table for at
least the most recent five years, although not necessarily in the same
capacity, and (ii) the address of each Board Member that is not an "interested
person" (as defined in the 1940 Act) of the Trust/Corporation or the Advisor
(each, an "Independent Board Member") is c/o Paul K. Freeman, Independent
Chairman, DWS Funds, PO Box 101833, Denver, CO 80250-1833. The term of office
for each Board Member is until the election and qualification of a successor,
or until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of the Trust/Corporation. Because the fund
does not hold an annual meeting of shareholders, each Board Member will hold
office for an indeterminate period.
INDEPENDENT BOARD MEMBERS
NUMBER OF
NAME, YEAR OF BIRTH, POSITION FUNDS IN DWS
WITH THE TRUST/CORPORATION BUSINESS EXPERIENCE AND FUND COMPLEX
AND LENGTH OF TIME SERVED/(1)/ DIRECTORSHIPS DURING THE PAST 5 YEARS OVERSEEN
Paul K. Freeman (1950) Consultant, World Bank/Inter-American Development Bank; Governing 126
Chairperson since 2009, and Council of the Independent Directors Council (governance, education
Board Member since 1993 committees); formerly: Project Leader, International Institute for Applied
Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group,
Inc. (environmental insurance) (1986-1998)
John W. Ballantine (1946) Retired; formerly: Executive Vice President and Chief Risk Management 126
Board Member since 1999 Officer, First Chicago NBD Corporation/The First National Bank of
Chicago (1996-1998); Executive Vice President and Head of International
Banking (1995-1996); Directorships: Healthways Inc. (provider of
disease and care management services); Portland General Electric
(utility company); Stockwell Capital Investments PLC (private equity);
former Directorships: First Oak Brook Bancshares, Inc. and Oak Brook
Bank; Prisma Energy International
Henry P. Becton, Jr. (1943) Vice Chair and former President, WGBH Educational Foundation; 126
Board Member since 1990 Directorships: Association of Public Television Stations; Lead Director,
Becton Dickinson and Company/(2)/ (medical technology company); Lead
Director, Belo Corporation/(2)/ (media company); Public Radio
International; Public Radio Exchange (PRX); The PBS Foundation; former
Directorships: Boston Museum of Science; American Public Television;
Concord Academy; New England Aquarium; Mass. Corporation for
Educational Telecommunications; Committee for Economic
Development; Public Broadcasting Service
Dawn-Marie Driscoll (1946) President, Driscoll Associates (consulting firm); Executive Fellow, 126
Board Member since 1987 Center for Business Ethics, Bentley University; formerly: Partner,
Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and
General Counsel, Filene's (1978-1988); Directorships: Trustee of 20
open-end mutual funds managed by Sun Capital Advisers, Inc. (since
2007); Director of ICI Mutual Insurance Company (since 2007); Advisory
Board, Center for Business Ethics, Bentley University; Trustee,
Southwest Florida Community Foundation (charitable organization);
former Directorships: Investment Company Institute (audit, executive,
nominating committees) and Independent Directors Council
(governance, executive committees)
Keith R. Fox (1954) Managing General Partner, Exeter Capital Partners (a series of private 126
Board Member since 1996 investment funds); Directorships: Progressive Holding Corporation
(kitchen goods importer and distributor); Box Top Media Inc.
(advertising); The Kennel Shop (retailer); former Chairman, National
Association of Small Business Investment Companies
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NUMBER OF
NAME, YEAR OF BIRTH, POSITION FUNDS IN DWS
WITH THE TRUST/CORPORATION BUSINESS EXPERIENCE AND FUND COMPLEX
AND LENGTH OF TIME SERVED/(1)/ DIRECTORSHIPS DURING THE PAST 5 YEARS OVERSEEN
Kenneth C. Froewiss Adjunct Professor of Finance, NYU Stern School of Business 126
(1945) Board Member since (September 2009 - present; Clinical Professor from 1997-September
2001 2009); Member, Finance Committee, Association for Asian Studies
(2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-
present); prior thereto, Managing Director, J.P. Morgan (investment
banking firm) (until 1996)
Richard J. Herring Jacob Safra Professor of International Banking and Professor, Finance 126
(1946) Board Member since Department, The Wharton School, University of Pennsylvania (since July
1990 1972); Co-Director, Wharton Financial Institutions Center (since July
2000); Director, Japan Equity Fund, Inc. (since September 2007), Thai
Capital Fund, Inc. (since September 2007), Singapore Fund, Inc. (since
September 2007); formerly: Vice Dean and Director, Wharton
Undergraduate Division (July 1995-June 2000); Director, Lauder Institute
of International Management Studies (July 2000-June 2006)
William McClayton Private equity investor (since October 2009); previously: Managing 126
(1944) Board Member since Director, Diamond Management & Technology Consultants, Inc. (global
2004 consulting firm) (2001-2009); Directorship: Board of Managers, YMCA of
Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP
(accounting) (1966-2001); Trustee, Ravinia Festival
Rebecca W. Rimel (1951) President and Chief Executive Officer, The Pew Charitable Trusts 126
Board Member since 1995 (charitable organization) (1994 to present); Trustee, Thomas Jefferson
Foundation (charitable organization) (1994 to present); Trustee,
Executive Committee, Philadelphia Chamber of Commerce (2001 to
2007); Trustee, Pro Publica (2007-present) (charitable organization);
Director, CardioNet, Inc./(2)/ (2009-present) (health care); formerly:
Executive Vice President, The Glenmede Trust Company (investment
trust and wealth management) (1983 to 2004); Board Member, Investor
Education (charitable organization) (2004-2005); Director, Viasys Health
Care/(2)/ (January 2007-June 2007)
William N. Searcy, Jr. (1946) Private investor since October 2003; Trustee of 20 open-end mutual 126
Board Member since 1993 funds managed by Sun Capital Advisers, Inc. (since October 1998);
formerly: Pension & Savings Trust Officer, Sprint Corporation/(2)/
(telecommunications) (November 1989-September 2003)
Jean Gleason Stromberg Retired; formerly: Consultant (1997-2001); Director, Financial Markets 126
(1943) Board Member since US Government Accountability Office (1996-1997); Partner, Fulbright &
1997 Jaworski, L.L.P. (law firm) (1978-1996); Directorships: The William and
Flora Hewlett Foundation; Business Leadership Council, Wellesley
College; former Directorships: Service Source, Inc., Mutual Fund
Directors Forum (2002-2004), American Bar Retirement Association
(funding vehicle for retirement plans) (1987-1990 and 1994-1996)
Robert H. Wadsworth (1940) President, Robert H. Wadsworth & Associates, Inc. (consulting firm) 129
Board Member since 1999 (1983 to present); Director, The Phoenix Boys Choir Association
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INTERESTED BOARD MEMBER AND OFFICER/(5)/
NAME, YEAR OF BIRTH,
POSITION WITH THE TRUST/ NUMBER OF
CORPORATION FUNDS IN DWS
AND LENGTH OF TIME BUSINESS EXPERIENCE AND FUND COMPLEX
SERVED/(1)(6)/ DIRECTORSHIPS DURING THE PAST 5 YEARS OVERSEEN
Ingo Gefeke/(3)/ (1967) Managing Director/(4)/, Deutsche Asset Management; Global Head of 58
Board Member since 2010 Distribution and Product Management, DWS Global Head of Trading and
Executive Vice President since Securities Lending. Member of the Board of Directors of DWS
2010 Investment GmbH Frankfurt (since July 2009) and DWS Holding &
Service GmbH Frankfurt (since January 2010); formerly: Global Chief
Administrative Officer Deutsche Asset Management (2004-2009);
Global Chief Operating Officer, Global Transaction Banking, Deutsche
Bank AG, New York (2001-2004); Chief Operating Officer, Global Banking
Division Americas, Deutsche Bank AG, New York (1999-2001); Central
Management, Global Banking Services, Deutsche Bank AG, Frankfurt
(1998-1999); Relationship Management, Deutsche Bank AG, Tokyo,
Japan (1997-1998)
OFFICERS/(5)/
NAME, YEAR OF BIRTH, POSITION
WITH THE TRUST/CORPORATION BUSINESS EXPERIENCE AND
AND LENGTH OF TIME SERVED/(6)/ DIRECTORSHIPS DURING THE PAST 5 YEARS
Michael G. Clark/(7)/ (1965) Managing Director/(4)/, Deutsche Asset Management (2006-present); President of DWS
President, 2006-present family of funds; Director, ICI Mutual Insurance Company (since October 2007);
formerly: Director of Fund Board Relations (2004-2006) and Director of Product
Development (2000-2004), Merrill Lynch Investment Managers; Senior Vice President
Operations, Merrill Lynch Asset Management (1999-2000)
John Millette/(8)/ (1962) Director/(4)/, Deutsche Asset Management
Vice President and Secretary,
1999-present
Paul H. Schubert/(7)/ (1963) Managing Director/(4)/, Deutsche Asset Management (since July 2004); formerly:
Chief Financial Officer, 2004- Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of
present Treasurer, 2005- Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global
present Asset Management (1994-1998)
Caroline Pearson/(8)/ (1962) Managing Director/(4)/, Deutsche Asset Management
Assistant Secretary, 1997-
present Chief Legal Officer,
April 2010-present
Rita Rubin/(9)/ (1970) Vice President and Counsel, Deutsche Asset Management (since October 2007);
Assistant Secretary, 2009- formerly, Vice President, Morgan Stanley Investment Management (2004-2007);
present Attorney, Shearman & Sterling LLP (2004); Director and Associate General Counsel,
UBS Global Asset Management (US) Inc. (2001-2004)
Paul Antosca/(8) /(1957) Director/(4)/, Deutsche Asset Management (since 2006); formerly: Vice President, The
Assistant Treasurer, 2007- Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
present
Jack Clark /(8)/ (1967) Director/(4)/, Deutsche Asset Management (since 2007); formerly: Vice President, State
Assistant Treasurer,2007- Street Corporation (2002-2007)
present
Diane Kenneally/(8)/ (1966) Director/(4)/, Deutsche Asset Management
Assistant Treasurer,2007-
present
John Caruso/(10)/ (1965) Managing Director/(4)/, Deutsche Asset Management
Anti-Money Laundering
Compliance Officer, 2010-
present
II-46
NAME, YEAR OF BIRTH, POSITION
WITH THE TRUST/CORPORATION BUSINESS EXPERIENCE AND
AND LENGTH OF TIME SERVED/(6)/ DIRECTORSHIPS DURING THE PAST 5 YEARS
Robert Kloby/(9)/ (1962) Managing Director/(4)/, Deutsche Asset Management
Chief Compliance Officer,
2006-present
/(1)/ The length of time served represents the year in which the Board Member
joined the board of one or more DWS funds currently overseen by the
Board.
/(2)/ A publicly held company with securities registered pursuant to Section
12 of the Securities Exchange Act of 1934.
/(3)/ The mailing address of Mr. Gefeke is 345 Park Avenue, New York, New
York 10154. Mr. Gefeke is an interested Board Member by virtue of his
positions with Deutsche Asset Management. As an interested person, Mr.
Gefeke receives no compensation from the fund. Mr. Gefeke is a board
member of the following trusts and corporations: Cash Account Trust,
DWS Balanced Fund, DWS Blue Chip Fund, DWS Equity Trust, DWS High
Income Series, DWS Money Funds, DWS State Tax-Free Income Series, DWS
Strategic Government Securities Fund, DWS Strategic Income Fund, DWS
Target Fund, DWS Technology Fund, DWS Value Series, Inc., DWS Variable
Series II, Investors Cash Trust, Tax-Exempt California Money Market
Fund, DWS Dreman Value Income Edge Fund, Inc., DWS Global High Income
Fund, Inc., DWS High Income Trust, DWS Multi-Market Income Trust, DWS
Municipal Income Trust, DWS RREEF World Real Estate & Tactical
Strategies Fund, Inc., DWS Strategic Income Trust, and DWS Strategic
Municipal Income Trust.
/(4)/ Executive title, not a board directorship.
/(5)/ As a result of their respective positions held with the Advisor, these
individuals are considered "interested persons" of the Advisor within
the meaning of the 1940 Act. Interested persons receive no compensation
from the fund.
/(6)/ The length of time served represents the year in which the officer was
first elected in such capacity for one or more DWS funds.
/(7)/ Address: 345 Park Avenue, New York, New York 10154.
/(8)/ Address: One Beacon Street, Boston, Massachusetts 02108.
/(9)/ Address: 280 Park Avenue, New York, New York 10017.
/(10)/ Address: 60 Wall Street, New York, New York 10005.
Certain officers hold similar positions for other investment companies for
which DIMA or an affiliate serves as the Advisor.
OFFICER'S ROLE WITH PRINCIPAL UNDERWRITER: DWS INVESTMENTS DISTRIBUTORS, INC.
Paul H. Schubert: Vice President
Caroline Pearson: Secretary
John Caruso: AML Compliance Officer
BOARD MEMBER QUALIFICATIONS
The Nominating and Governance Committee is responsible for recommending
proposed nominees for election to the full Board for its approval. In
recommending the election of the current Board Members, the Committee generally
considered the educational, business and professional experience of each Board
Member in determining his or her qualifications to serve as a Board Member,
including the Board Member's record of service as a director or trustee of
public and private organizations. In the case of most Board Members, this
included their many years of previous service as a trustee of certain of the
DWS funds. This previous service has provided these Board Members with a
valuable understanding of the history of the DWS funds and the DIMA
organization and has also served to demonstrate their high level of diligence
and commitment to the interests of fund shareholders and their ability to work
effectively and collegially with other members of the Board. The Committee also
considered, among other factors, the particular attributes described below with
respect to the various individual Board Members:
John W. Ballantine - Mr. Ballantine's experience in banking, financial risk
management and investments acquired in the course of his service as a senior
executive of various US and foreign banks.
Henry P. Becton, Jr. - Mr. Becton's professional training and experience as an
attorney, his experience as the chief executive officer of a major public media
company and his experience as lead director of two NYSE companies, including
his service at various times as the chair of the audit, compensation and
nominating committees of one or both of such boards.
II-47
Dawn-Marie Driscoll - Ms. Dricoll's professional training and experience as an
attorney, her expertise as a consultant, professor and author on the subject of
business ethics, her service as a member of the executive committee of the
Independent Directors Council of the Investment Company Institute and her
experience as a director of an insurance company serving the mutual fund
industry.
Keith R. Fox - Mr. Fox's experience as the chairman and a director of various
private operating companies and investment partnerships and his experience as a
director and audit committee member of several public companies.
Paul K. Freeman - Dr. Freeman's professional training and experience as an
attorney and an economist, his experience as the founder and chief executive
officer of an insurance company, his experience as a senior executive and
consultant for various companies focusing on matters relating to risk
management and his service on the Independent Directors Council of the
Investment Company Institute.
Kenneth C. Froewiss - Dr. Froewiss' professional training and experience as an
economist, his experience in finance acquired in various professional positions
with governmental and private banking organizations and his experience as a
professor of finance at a leading business school.
Ingo Gefeke - Mr. Gefeke's experience as a senior executive in various parts of
Deutsche Bank's investment management business and his current service as the
chief executive officer of DWS Investments.
Richard J. Herring - Mr. Herring's experience as a professor of finance at a
leading business school and his service as an advisor to various professional
and governmental organizations.
William McClayton - Mr. McClayton's professional training and experience in
public accounting, including his service as a senior partner of a major public
accounting firm focusing on financial markets companies and his service as a
senior executive of a public management consulting firm.
Rebecca W. Rimel - Ms. Rimel's experience on a broad range of public policy
issues acquired during her service as the executive director of a major
foundation and her experience as a director of several public companies.
William N. Searcy - Mr. Searcy's experience as an investment officer for
various major public company retirement plans, which included evaluation of
unaffiliated investment advisers and supervision of various administrative and
accounting functions.
Jean Gleason Stromberg - Ms. Stromberg's professional training and experience
as an attorney specializing in federal securities law, her service in a senior
position with the Securities and Exchange Commission and her experience as a
director and audit committee member of several major non-profit organizations.
Robert H. Wadsworth - Mr. Wadsworth's experience as an owner and chief
executive officer of various businesses serving the mutual fund industry,
including a registered broker-dealer and a registered transfer agent, and his
service as a senior executive officer of several mutual funds.
II-48
PART II: APPENDIX II-B - PORTFOLIO MANAGEMENT COMPENSATION
FOR FUNDS ADVISED BY DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. OR ITS
AFFILIATES
Each fund is managed by a team of investment professionals who each play an
important role in a fund's management process. Team members work together to
develop investment strategies and select securities for a fund. This team works
for the Advisor or its affiliates and is supported by a large staff of
economists, research analysts, traders and other investment specialists. The
Advisor or its affiliates believe(s) its team approach benefits investors by
bringing together many disciplines and leveraging its extensive resources. Team
members with primary responsibility for management of a fund, as well as team
members who have other ongoing management responsibilities for a fund, are
identified in each fund's prospectus, as of the date of a fund's prospectus.
Composition of the team may change over time, and shareholders and investors
will be notified of changes affecting individuals with primary fund management
responsibility.
COMPENSATION OF PORTFOLIO MANAGERS
Portfolio managers are paid on a Total Compensation basis, which includes: (i)
fixed pay (base salary), which is linked to job function, responsibilities and
internal and external peer comparison, and (ii) variable pay, which is linked
to investment performance, individual contributions to the team, and the
overall financial results of both Deutsche Asset Management and Deutsche Bank
AG.
Variable pay can be delivered via a short-term and/or long-term vehicle, namely
cash, restricted equity awards, and/or restricted incentive awards. Variable
pay comprises a greater proportion of total compensation as a portfolio
manager's seniority and total compensation level increase. The proportion of
variable pay delivered via a long-term incentive award, which is subject to
clawback, will increase significantly as the amount of variable pay increases.
All variable pay delivered via long-term incentive award is subject to
clawback.
To evaluate its investment professionals, Deutsche Asset Management reviews
investment performance for all accounts managed in relation to both account
peer group and benchmark related data (i.e., appropriate Morningstar and Lipper
peer group universes and/or benchmark index(es) with respect to each account).
The ultimate goal of this process is to evaluate the degree to which investment
professionals deliver investment performance that meets or exceeds their
clients' risk and return objectives. When determining Total Compensation,
Deutsche Asset Management considers a number of quantitative and qualitative
factors:
o Quantitative measures (e.g. one-, three- and five-year pre-tax returns
versus the benchmark and appropriate peer group, taking risk targets into
account) are utilized to measure performance.
o Qualitative measures (e.g. adherence to, as well as contributions to, the
enhancement of the investment process) are included in the performance
review.
o Other factors (e.g. teamwork, adherence to compliance rules, risk management
and 'living the values" of Deutsche Asset Management) are included as part
of a discretionary component of the review process, giving management the
ability to consider additional markers of performance on a subjective
basis.
CONFLICTS
Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:
II-49
o Certain investments may be appropriate for a fund and also for other clients
advised by the Advisor, including other client accounts managed by a fund's
portfolio management team. Investment decisions for a fund and other
clients are made with a view to achieving their respective investment
objectives and after consideration of such factors as their current
holdings, availability of cash for investment and the size of their
investments generally. A particular security may be bought or sold for only
one client or in different amounts and at different times for more than one
but less than all clients. Likewise, because clients of the Advisor may
have differing investment strategies, a particular security may be bought
for one or more clients when one or more other clients are selling the
security.The investment results achieved for a fund may differ from the
results achieved for other clients of the Advisor. In addition, purchases
or sales of the same security may be made for two or more clients on the
same day. In such event, such transactions will be allocated among the
clients in a manner believed by the Advisor to be most equitable to each
client, generally utilizing a pro rata allocation methodology. In some
cases, the allocation procedure could potentially have an adverse effect or
positive effect on the price or amount of the securities purchased or sold
by a fund. Purchase and sale orders for a fund may be combined with those
of other clients of the Advisor in the interest of achieving the most
favorable net results to a fund and the other clients.
o To the extent that a portfolio manager has responsibilities for managing
multiple client accounts, a portfolio manager will need to divide time and
attention among relevant accounts. The Advisor attempts to minimize these
conflicts by aligning its portfolio management teams by investment strategy
and by employing similar investment models across multiple client accounts.
o In some cases, an apparent conflict may arise where the Advisor has an
incentive, such as a performance-based fee, in managing one account and not
with respect to other accounts it manages. The Advisor will not determine
allocations based on whether it receives a performance-based fee from the
client. Additionally, the Advisor has in place supervisory oversight
processes to periodically monitor performance deviations for accounts with
like strategies.
o The Advisor and its affiliates and the investment team of a fund may manage
other mutual funds and separate accounts on a long only or a long-short
basis. The simultaneous management of long and short portfolios creates
potential conflicts of interest including the risk that short sale activity
could adversely affect the market value of the long positions(and vice
versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the
same time. The Advisor has adopted procedures that it believes are
reasonably designed to mitigate these and other potential conflicts of
interest. Included in these procedures are specific guidelines developed to
provide fair and equitable treatment for all clients whose accounts are
managed by each fund's portfolio management team. The Advisor and the
portfolio management team have established monitoring procedures, a
protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.
The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests in addition
to managing asset management accounts, such wide ranging activities involve
real, potential or apparent conflicts of interest. These interests and
activities include potential advisory, transactional and financial activities
and other interests in securities and companies that may be directly or
indirectly purchased or sold by the Firm for its clients' advisory accounts.
The Advisor may take investment positions in securities in which other clients
or related persons within the Firm have different investment positions. There
may be instances in which the Advisor is purchasing or selling for its client
accounts, or pursuing an outcome in the context of a workout or restructuring
with respect to, securities in which the Firm is undertaking the same or
differing strategy in other businesses or other client accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients,
including the Fund. The Advisor has instituted business and compliance
policies, procedures and disclosures that are designed to identify, monitor and
mitigate conflicts of interest and, as appropriate, to report them to a fund's
Board.
II-50
FOR FUND ADVISED BY ABERDEEN (AAMI)
COMPENSATION
AAMI's remuneration policy (Policy) is designed to reflect the importance of
recruiting, retaining and motivating senior executives and portfolio managers
of the caliber necessary to maintain and improve AAMI's position in the asset
management industry. The Policy seeks to reward performance in a manner which
aligns the interests of clients, shareholders and executives. The elements of
the Policy as it relates to the Portfolio's portfolio managers are as follows:
BASIC SALARY. The salaries of all employees are reviewed annually and are
determined by reference to external market research. AAMI's Policy is to pay
salaries which, when taken together with other benefits, will provide a
remuneration package that is reasonable and competitive in the asset management
industry. AAMI participates in compensation surveys which provide salary
comparisons for a range of employees across AAMI. AAMI also considers
information included in other publicly available research and survey results.
Staff performance is reviewed formally once a year with mid-term reviews. The
review process looks at all of the ways in which an individual has contributed
to the organization, and specifically, in the case of portfolio managers, to
the investment team.
ANNUAL BONUS. The Policy is to recognize corporate and individual achievements
each year through an appropriate annual bonus plan. The aggregate amount of a
cash bonus available in any year is dependent on AAMI's overall performance and
profitability. Consideration will also be given to the levels of bonuses paid
in the marketplace. Individual awards, payable to all members of staff, are
determined by a rigorous assessment of achievement against defined objectives,
and are reviewed and approved by AAMI's Remuneration Committee.
Portfolio managers' bonuses are based on a combination of the investment team's
overall performance, the individual's performance and the overall performance
of AAMI. In calculating a portfolio manager's bonus, AAMI takes into
consideration the performance of funds managed by the team as well as more
subjective issues that benefit AAMI. Portfolio manager performance on
investment matters is judged over all funds to which the fund manager
contributes. Performance is measured against appropriate market indices as well
as peer universes over various time periods.
DEFERRED BONUS. A deferred bonus plan exists and is designed to encourage the
retention of certain key employees identified as critical to AAMI's achievement
of its long-term goals. Deferred bonuses may be in the form of deferred equity
in Aberdeen PLC.
Retention and incentives for former Deutsche Asset Management employees. In
addition to the Policy, appropriate retention and incentive arrangements have
been put into place for certain employees of the former Deutsche Asset
Management businesses, including in some cases participation in the Long Term
Incentive Plan. The costs of these arrangements are being borne by both
Deutsche Asset Management and AAMI.
CONFLICTS
In addition, an investment professional may manage accounts in a personal
capacity that may include holdings that are similar to, or the same as, those
of a fund. AAMI have in place a Code of Ethics that is designed to address
conflicts of interest and that, among other things, imposes restrictions on the
ability of portfolio managers and other "access persons" to invest in
securities that may be recommended or traded in a fund and other client
accounts.
Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:
II-51
o Certain investments may be appropriate for a fund and also for other clients
advised by AAMI, including other client accounts managed by a fund's
portfolio management team. Investment decisions for a fund and other
clients are made with a view to achieving their respective investment
objectives and after consideration of such factors as their current
holdings, availability of cash for investment and the size of their
investments generally. A particular security may be bought or sold for only
one client or in different amounts and at different times for more than one
but less than all clients. Likewise, because clients of AAMI may have
differing investment strategies, a particular security may be bought for
one or more clients when one or more other clients are selling the
security. The investment results achieved for a fund may differ from the
results achieved for other clients of AAMI. In addition, purchases or sales
of the same security may be made for two or more clients on the same day.
In such event, such transactions will be allocated among the clients in a
manner believed by AAMI to be most equitable to each client, generally
utilizing a pro rata allocation methodology. In some cases, the allocation
procedure could potentially have an adverse effect or positive effect on
the price or amount of the securities purchased or sold by a fund. Purchase
and sale orders for a fund may be combined with those of other clients of
AAMI in the interest of achieving the most favorable net results to a fund
and the other clients.
o To the extent that a portfolio manager has responsibilities for managing
multiple client accounts, a portfolio manager will need to divide time and
attention among relevant accounts. The Advisor attempts to minimize these
conflicts by aligning its portfolio management teams by investment strategy
and by employing similar investment models across multiple client accounts.
o In some cases, an apparent conflict may arise where AAMI have an incentive,
such as a performance based fee, in managing one account and not with
respect to other accounts it manages. The Advisor will not determine
allocations based on whether it receives a performance-based fee from the
client. Additionally, AAMI have in place supervisory oversight processes to
periodically monitor performance deviations for accounts with like
strategies.
FOR FUNDS ADVISED BY DREMAN
COMPENSATION
Each fund has been advised that the subadvisor has implemented a highly
competitive compensation plan which seeks to attract and retain exceptional
investment professionals who have demonstrated that they can consistently
outperform their respective fund's benchmark. The compensation plan is
comprised of both a fixed component and a variable component. The variable
component is determined by assessing the investment professional's performance
measured utilizing both quantitative and qualitative factors.
The sub-advisor's investment professionals are each paid a fixed base salary
that is determined based on their job function and responsibilities. The base
salary is deemed to be competitive with the marketplace and specifically with
salaries in the financial services industry by utilizing various salary surveys
compiled for the financial services industry, specifically, investment advisory
firms. The variable component of the subadvisor's compensation plan which takes
the form of a cash bonus combined with either, employee retention bonus units
payable over time or outright stock grants is discretionary and is designed to
reward and retain investment professionals including portfolio managers and
research analysts for their contributions to a fund's performance relative to
its benchmark. Additionally, employees are eligible for a profit sharing plan.
Investment professionals may receive equity in the form of units or fractional
units of membership interest in the subadvisor or they may receive employee
retention bonus units which enable them to participate in the growth of the
firm. Investment professionals also participate in the subadvisor's profit
sharing, defined contribution plan that allows the subadvisor to contribute up
to twenty percent of an employee's total compensation, subject to various
regulatory limitations, to each employee's profit sharing account. The
subadvisor's profit sharing plan is a qualified plan which benefits employees
of the firm including both portfolio managers and research analysts.
Contributions to the sub-advisor's profit sharing plan vest over a specified
term. Finally all employees of the subadvisor including investment
professionals receive additional fringe benefits in the form of subsidized
medical, dental, group-term, and life insurance coverage.
II-52
The basis for determining the variable component of an investment
professional's total compensation is determined through a subjective process
which evaluates an investment professional performance against several
quantitative and qualitative factors including the following:
Quantitative factors:
(i) Relative ranking of a fund's performance against its peers in the
one, three and five year pre-tax investment performance categories.
A fund's performance is evaluated against peers in its fund category
and performance is ranked from one to four on a declining scale
depending on the quartile in which the portfolio manager's absolute
performance falls. The portfolio manager is rewarded on a graduated
scale for outperforming relative to his peers.
(ii) Relative performance of a fund's performance against the
pre-determined indices for the product strategy against which the
fund's performance is measured. The portfolio manager is rewarded on
a graduated scale for outperforming relative to the fund's benchmark
index.
(iii) Performance of a fund is measured through attribution analysis
models which analyzes the portfolio manager's contribution from both
an asset allocation or sector allocation perspective and security
selection perspective. This factor evaluates how the investment
professional performs in linking performance with the client's
investment objective including investment parameters and risk and
return objectives. This factor may include some qualitative
characteristics.
Qualitative factors:
(i) Ability to work well with other members of the investment
professional team and mentor junior members;
(ii) Contributions to the organizational overall success with new product
strategies; and
(iii) Other factors such as contributing to the team in a leadership role
and by being responsive to requests for assistance.
CONFLICTS
The sub-advisor manages clients' accounts using a contrarian value investment
strategy. For both its large capitalization and small capitalization strategies
the subadvisor utilizes a model portfolio and rebalances client's accounts
whenever changes are made to the model portfolio. In addition the sub-advisor
aggregates its trades and allocates the trades to all clients' accounts in an
equitable manner. The sub-advisor strongly believes aggregating its orders
protect all clients from being disadvantaged by price or time execution. The
model portfolio approach and the trade aggregation policy of the subadvisor
seek to eliminate conflicts of interest that could arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account. The subadvisor does not receive any
performance-based fees from any of its accounts with the exception of hedge
funds that are managed by an affiliated firm. The hedge funds are treated like
all other client account and trades done for the fund are generally aggregated
with trades done for its other client accounts.
The sub-advisor's investment professionals are compensated in the same manner
for all client accounts irrespective of the type of account.
FOR FUNDS ADVISED BY NORTHERN TRUST (NTI)
COMPENSATION
As of March 31, 2008 the compensation for the index portfolio managers is based
on the competitive marketplace and consists of a fixed base salary plus a
variable annual cash incentive award. In addition, non-cash incentives, such as
stock options or restricted stock of Northern Trust Corporation, may be awarded
from time to time. The annual incentive award is discretionary and is based on
a quantitative and qualitative evaluation of each portfolio manager's
investment performance and contribution to his or her respective team plus the
financial performance of the investment
II-53
business unit and Northern Trust Corporation as a whole. The annual incentive
award is not based on performance of the portfolio/funds or the amount of
assets held in a fund. Moreover, no material differences exist between the
compensation structure for mutual fund accounts and other types of accounts.
CONFLICTS
NTI's portfolio managers are often responsible for managing one or more funds,
as well as other accounts, including separate accounts and other pooled
investment vehicles. A portfolio manager may manage a separate account or other
pooled investment vehicle that may have a materially higher or lower fee
arrangement. The side-by-side management of these accounts may raise potential
conflicts of interest relating to cross trading, the allocation of investment
opportunities and the aggregation and allocation of trades. In addition, while
portfolio managers generally only manage accounts with similar investment
strategies, it is possible that due to varying investment restrictions among
accounts that certain investments are made for some accounts and not others or
conflicting investment positions are taken among accounts. The portfolio
managers have a fiduciary responsibility to manage all client accounts in a
fair and equitable manner. NTI seeks to provide best execution of all
securities transactions and aggregate and then allocate securities to client
accounts in a fair and timely manner. To this end, NTI has developed policies
and procedures designed to mitigate and manage the potential conflicts of
interest that may arise from side-by-side management. In addition, NTI has
adopted policies limiting the circumstances under which cross-trades may be
affected. NTI conducts periodic reviews of trades for consistency with these
policies.
FOR FUND ADVISED BY TURNER
COMPENSATION
Turner's investment professionals receive a base salary commensurate with their
level of experience. Turner's goal is to maintain competitive base salaries
through review of industry standards, market conditions, and salary surveys.
Bonus compensation, which is a multiple of base salary, is based on the
performance of each individual's sector and portfolio assignments relative to
appropriate market benchmarks. In addition, each employee is eligible for
equity awards. Turner believes this compensation provides incentive to attract
and retain highly qualified people.
The objective performance criteria noted above accounts for 90% of the bonus
calculation. The remaining 10% is based upon subjective, "good will" factors
including teamwork, interpersonal relations, the individual's contribution to
overall success of the firm, media and client relations, presentation skills,
and professional development. Portfolio managers/analysts are reviewed on an
annual basis. The Chief Investment Officer, Robert E. Turner, CFA, is
responsible for setting base salaries, bonus targets, and making all subjective
judgments related to an investment professionals' compensation.
CONFLICTS
As is typical for many money managers, potential conflicts of interest may
arise related to Turner's management of accounts including the Portfolio where
not all accounts are able to participate in a desired Initial Public Offering
(IPO), or other limited opportunity, relating to use of soft dollars and other
brokerage practices, related to the voting of proxies, employee personal
securities trading, and relating to a variety of other circumstances. In all
cases, however, Turner believes it has written policies and procedures in place
reasonably designed to prevent violations of the federal securities laws and to
prevent material conflicts of interest from arising. Please also see Turner's
Form ADV, Part II for a description of some of its policies and procedures in
this regard.
II-54
PART II: APPENDIX II-C - FEE RATES OF SERVICE PROVIDERS
FEES PAYABLE TO DIMA FOR INVESTMENT MANAGEMENT SERVICES.
The management fee for each fund is accrued daily and paid monthly, at the
annual percentage rate of daily net assets indicated below:
FUND NAME MANAGEMENT FEE RATE
Tax-Free Income Funds
DWS California Tax-Free Income Fund First $250 million 0.450%
Next $750 million 0.420%
Next $1.5 billion 0.400%
Next $2.5 billion 0.380%
Next $2.5 billion 0.350%
Next $2.5 billion 0.330%
Next $2.5 billion 0.310%
Thereafter 0.300%
DWS Strategic High Yield Tax-Free Fund First $300 million 0.565%
Next $200 million 0.515%
Next $500 million 0.490%
Thereafter 0.470%
DWS Intermediate Tax/AMT Free Fund 0.315%
DWS Managed Municipal Bond Fund First $250 million 0.365%
Next $750 million 0.345%
Next $1.5 billion 0.325%
Next $2.5 billion 0.315%
Next $2.5 billion 0.295%
Next $2.5 billion 0.275%
Next $2.5 billion 0.255%
Thereafter 0.235%
DWS Massachusetts Tax Free Fund First $250 million 0.450%
Next $750 million 0.420%
Next $1.5 billion 0.400%
Next $2.5 billion 0.380%
Next $2.5 billion 0.350%
Next $2.5 billion 0.330%
Next $2.5 billion 0.310%
Thereafter 0.300%
DWS New York Tax-Free Income Fund First $250 million 0.450%
Next $750 million 0.420%
Next $1.5 billion 0.400%
Next $2.5 billion 0.380%
Next $2.5 billion 0.350%
Next $2.5 billion 0.330%
Next $2.5 billion 0.310%
Thereafter 0.300%
DWS Short-Term Municipal Bond Fund First $500 million 0.400%
Next $500 million 0.385%
Next $1.0 billion 0.370%
Thereafter 0.355%
II-55
FUND NAME MANAGEMENT FEE RATE
Taxable Income Funds
DWS Core Fixed Income Fund First $1.5 billion 0.400%
Next $1.75 billion 0.385%
Next $1.75 billion 0.370%
Thereafter 0.355%
DWS Core Plus Income Fund First $250 million 0.465%
Next $750 million 0.435%
Next $1.5 billion 0.415%
Next $2.5 billion 0.395%
Next $2.5 billion 0.365%
Next $2.5 billion 0.345%
Next $2.5 billion 0.325%
Thereafter 0.315%
DWS Floating Rate Plus Fund First $1 billion 0.650%
Next $1.5 billion 0.635%
Next $2.5 billion 0.610%
Next $2.5 billion 0.585%
Next $2.5 billion 0.560%
Thereafter 0.550%
DWS GNMA Fund First $5.0 billion 0.315%
Next $1.0 billion 0.300%
Thereafter 0.285%
DWS High Income Fund First $250 million 0.480%
Next $750 million 0.450%
Next $1.5 billion 0.430%
Next $2.5 billion 0.410%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Next $2.5 billion 0.340%
Thereafter 0.320%
DWS High Income Plus Fund First $1.0 billion 0.500%
Next $1.5 billion 0.490%
Next $2.5 billion 0.480%
Next $5.0 billion 0.470%
Thereafter 0.460%
DWS Global Inflation Plus Fund First $1.5 billion 0.400%
Next $500 million 0.375%
Next $1.0 billion 0.360%
Next $1.0 billion 0.345%
Next $1.0 billion 0.330%
Next $1.0 billion 0.315%
Thereafter 0.300%
DWS Short Duration Fund First $500 million 0.400%
Next $500 million 0.385%
Next $1.0 billion 0.370%
Thereafter 0.355%
II-56
FUND NAME MANAGEMENT FEE RATE
DWS Short Duration Plus Fund First $1.5 billion 0.365%
Next $500 million 0.340%
Next $1.0 billion 0.315%
Next $1.0 billion 0.300%
Next $1.0 billion 0.285%
Next $1.0 billion 0.270%
Thereafter 0.255%
DWS Strategic Income Fund First $250 million 0.480%
Next $750 million 0.450%
Next $1.5 billion 0.430%
Next $2.5 billion 0.410%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Next $2.5 billion 0.340%
Thereafter 0.320%
DWS Strategic Government Securities First $250 million 0.350%
Fund Next $750 million 0.330%
Next $1.5 billion 0.310%
Next $2.5 billion 0.300%
Next $2.5 billion 0.280%
Next $2.5 billion 0.260%
Next $2.5 billion 0.240%
Thereafter 0.220%
Multi-Category/Asset Allocation Funds
DWS Alternative Asset Allocation Plus 0.200%/(1)/
Fund
DWS Balanced Fund First $1.5 billion 0.370%
Next $500 million 0.345%
Next $1.5 billion 0.310%
Next $2.0 billion 0.300%
Next $2.0 billion 0.290%
Next $2.5 billion 0.280%
Next $2.5 billion 0.270%
Thereafter 0.260%
DWS LifeCompass Protect 2017 Fund 0.600%/(2)/
DWS LifeCompass Retirement Fund 0.000%/(1)/
DWS LifeCompass 2015 Fund 0.000%/(1)/
DWS LifeCompass 2020 Fund 0.000%/(1)/
DWS LifeCompass 2030 Fund 0.000%/(1)/
DWS LifeCompass 2040 Fund 0.000%/(1)/
DWS Lifecycle Long Range Fund First $250 million 0.600%
Next $750 million 0.575%
Thereafter 0.550%
DWS Select Alternative Allocation 0.00%/(1)/
Fund
DWS Target 2010 Fund 0.400%
DWS Target 2011 Fund 0.400%
II-57
FUND NAME MANAGEMENT FEE RATE
DWS Target 2012 Fund 0.400%
DWS Target 2013 Fund 0.400%
DWS Target 2014 Fund 0.400%
Value Funds
DWS Enhanced Commodity Strategy First $500 million 0.950%
Fund Next $500 million 0.900%
Thereafter 0.850%
DWS Disciplined Market Neutral Fund First $1.0 billion 1.250%
Next $1.0 billion 1.200%
Next $1.0 billion 1.150%
Thereafter 1.100%
DWS Dreman Mid Cap Value Fund First $250 million 0.750%
Next $250 million 0.720%
Next $2.0 billion 0.700%
Next $1.5 billion 0.680%
Thereafter 0.660%/(3)/
DWS Dreman Small Cap Value Fund First $250 million 0.750%
Next $750 million 0.720%
Next $1.5 billion 0.700%
Next $2.5 billion 0.680%
Next $2.5 billion 0.650%
Next $2.5 billion 0.640%
Next $2.5 billion 0.630%
Thereafter 0.620%/(3)/
DWS Growth & Income Fund First $250 million 0.365%
Next $750 million 0.360%
Next $1.5 billion 0.355%
Next $5.0 billion 0.345%
Next $5.0 billion 0.335%
Next $5.0 billion 0.325%
Thereafter 0.300%
DWS Large Cap Value Fund First $1.5 billion 0.425%
Next $500 million 0.400%
Next $1 billion 0.375%
Next $1 billion 0.350%
Next $1 billion 0.325%
Thereafter 0.300
DWS RREEF Real Estate Securities First $100 million 0.565%
Fund Next $100 million 0.465%
Next $100 million 0.415%
Thereafter 0.365%
DWS Small Cap Core Fund First $500 million 0.665%
Next $500 million 0.615%
Thereafter 0.565%
II-58
FUND NAME MANAGEMENT FEE RATE
DWS Strategic Value Fund First $250 million 0.750%
Next $750 million 0.720%
Next $1.5 billion 0.700%
Next $2.5 billion 0.680%
Next $2.5 billion 0.650%
Next $2.5 billion 0.640%
Next $2.5 billion 0.630%
Thereafter 0.620%/(3)/
Index-Related Funds
DWS EAFE Equity Index Fund 0.250%
DWS Equity 500 Index Fund 0.000%/(4)/
DWS Equity 500 Index Portfolio 0.050%
DWS S&P 500 Index Fund 0.000%/(4)/
DWS U.S. Bond Index Fund 0.150%
Growth Funds
DWS Blue Chip Fund First $250 million 0.480%
Next $750 million 0.450%
Next $1.5 billion 0.430%
Next $2.5 billion 0.410%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Next $2.5 billion 0.340%
Thereafter 0.320%
DWS Capital Growth Fund First $250 million 0.495%
Next $750 million 0.465%
Next $1.5 billion 0.445%
Next $2.5 billion 0.425%
Next $2.5 billion 0.395%
Next $2.5 billion 0.375%
Next $2.5 billion 0.355%
Thereafter 0.335%
DWS Communications Fund First $100 million 1.000%
Next $100 million 0.900%
Next $100 million 0.850%
Next $200 million 0.800%
Next $500 million 0.730%
Next $500 million 0.680%
Thereafter 0.650%
DWS Disciplined Long/Short Growth First $1.0 billion 1.00%
Fund Next $1.0 billion 0.950%
Next $1.0 billion 0.900%
Thereafter 0.850%
DWS Gold & Precious Metals Fund First $500 million 0.835%
Thereafter 0.785%
DWS Health Care Fund First $500 million 0.765%
Thereafter 0.715%
II-59
FUND NAME MANAGEMENT FEE RATE
DWS Large Company Growth Fund First $1.5 billion 0.615%
Next $500 million 0.565%
Thereafter 0.515%
DWS Mid Cap Growth Fund First $500 million 0.650%
Next $1 billion 0.600%
Next $2.5 billion 0.550%
Next $2.5 billion 0.540%
Next $2.5 billion 0.530%
Next $2.5 billion 0.520%
Thereafter 0.510%
DWS Small Cap Growth Fund 0.650%
DWS Technology Fund First $250 million 0.480%
Next $750 million 0.450%
Next $1.5 billion 0.430%
Next $2.5 billion 0.410%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Next $2.5 billion 0.340%
Thereafter 0.320%
Global Income Funds
DWS Emerging Markets Fixed Income 0.590%
Fund
DWS Global Bond Fund 0.410%
Global Growth Funds
DWS Climate Change Fund 1.000%
DWS Emerging Markets Equity Fund First $250 million 1.015%
Next $500 million 0.990%
Thereafter 0.965%
DWS Europe Equity Fund First $250 million 0.665%
Next $750 million 0.635%
Next $1.5 billion 0.615%
Next $2.5 billion 0.595%
Next $2.5 billion 0.565%
Next $2.5 billion 0.555%
Next $2.5 billion 0.545%
Thereafter 0.535%
DWS Global Small Cap Growth Fund First $500 million 0.915%
Next $500 million 0.865%
Thereafter 0.815%
DWS Global Thematic Fund First $500 million 0.915%
Next $500 million 0.865%
Next $500 million 0.815%
Next $500 million 0.765%
Thereafter 0.715%
II-60
FUND NAME MANAGEMENT FEE RATE
DWS International Fund First $2.5 billion 0.565%
Next $2.5 billion 0.545%
Next $5 billion 0.525%
Next $5 billion 0.515%
Thereafter 0.465%
DWS Diversified International Equity First $1.5 billion 0.700%
Fund Next $1.75 billion 0.685%
Next $1.75 billion 0.670%
Thereafter 0.655%
DWS International Value Opportunities First $500 million 0.800%
Fund Next $500 million 0.780%
Next $1.0 billion 0.760%
Thereafter 0.740%
DWS Latin America Equity Fund First $400 million 1.165%
Thereafter 1.065%
DWS RREEF Global Real Estate First $500 million 1.000%
Securities Fund Next $500 million 0.985%
Next $1 billion 0.960%
Thereafter 0.945%
DWS RREEF Global Infrastructure 0.900%
Fund
Insurance/Annuity Funds
DWS Bond VIP First $250 million 0.390%
Next $750 million 0.365%
Thereafter 0.340%
DWS Capital Growth VIP First $250 million 0.390%
Next $750 million 0.365%
Thereafter 0.340%
DWS Global Opportunities VIP First $500 million 0.890%
Next $500 million 0.875%
Next $1.0 billion 0.860%
0.845% thereafter
DWS Growth & Income VIP First $250 million 0.390%
Next $750 million 0.365%
Thereafter 0.340%
DWS Health Care VIP First $250 million 0.665%
Next $750 million 0.640%
Next $1.5 billion 0.615%
Next $2.5 billion 0.595%
Next $2.5 billion 0.565%
Next $2.5 billion 0.555%
Next $2.5 billion 0.545%
Thereafter 0.535%
DWS International VIP First $500 million 0.790%
Thereafter 0.640%
DWS Equity 500 Index VIP First $1 billion 0.200%
Next $1 billion 0.175%
Thereafter 0.150%
II-61
FUND NAME MANAGEMENT FEE RATE
DWS Small Cap Index VIP 0.350%
DWS Alternative Asset Allocation Plus 0.200%/(5)/
VIP
DWS Balanced VIP First $250 million 0.370%
Next $750 million 0.345%
Thereafter 0.310%
DWS Blue Chip VIP First $250 million 0.550%
Next $750 million 0.520%
Next $1.5 billion 0.500%
Next $2.5 billion 0.480%
Next $2.5 billion 0.450%
Next $2.5 billion 0.430%
Next $2.5 billion 0.410%
Thereafter 0.390%
DWS Conservative Allocation VIP First $500 million 0.065%
Next $500 million 0.055%
Next $500 million 0.045%
Next $1.0 billion 0.035%
Thereafter 0.025%/(1)/
DWS Core Fixed Income VIP First $250 million 0.500%
Next $750 million 0.470%
Next $1.5 billion 0.450%
Next $2.5 billion 0.430%
Next $2.5 billion 0.400%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Thereafter 0.340%
DWS Diversified International Equity First $1.5 billion 0.650%
VIP Next $1.75 billion 0.635%
Next $1.75 billion 0.620%
Thereafter 0.605%
DWS Dreman Small Mid Cap Value VIP First $250 million 0.650%
Next $750 million 0.620%
Next $1.5 billion 0.600%
Next $2.5 billion 0.580%
Next $2.5 billion 0.550%
Next $2.5 billion 0.540%
Next $2.5 billion 0.530%
Thereafter 0.520%
DWS Global Thematic VIP First $250 million 0.915%
Next $500 million 0.865%
Next $750 million 0.815%
Next $1.5 billion 0.765%
Thereafter 0.715%
II-62
FUND NAME MANAGEMENT FEE RATE
DWS Government & Agency Securities First $250 million 0.450%
VIP Next $750 million 0.430%
Next $1.5 billion 0.410%
Next $2.5 billion 0.400%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Next $2.5 billion 0.340%
Thereafter 0.320%
DWS Growth Allocation VIP First $500 million 0.065%
Next $500 million 0.055%
Next $500 million 0.045%
Next $1.0 billion 0.035%
Thereafter 0.025%/(1)/
DWS High Income VIP First $250 million 0.500%
Next $750 million 0.470%
Next $1.5 billion 0.450%
Next $2.5 billion 0.430%
Next $2.5 billion 0.400%
Next $2.5 billion 0.380%
Next $2.5 billion 0.360%
Thereafter 0.340%
DWS Large Cap Value VIP First $250 million 0.650%
Next $750 million 0.625%
Next $1.5 billion 0.600%
Next $2.5 billion 0.575%
Next $2.5 billion 0.550%
Next $2.5 billion 0.525%
Next $2.5 billion 0.500%
Thereafter 0.475%
DWS Mid Cap Growth VIP First $250 million 0.665%
Next $750 million 0.635%
Next $1.5 billion 0.615%
Next $2.5 billion 0.595%
Next $2.5 billion 0.565%
Next $2.5 billion 0.555%
Next $2.5 billion 0.545%
Thereafter 0.535%
DWS Moderate Allocation VIP First $500 million 0.065%
Next $500 million 0.055%
Next $500 million 0.045%
Next $1.0 billion 0.035%
Thereafter 0.025%/(1)/
DWS Money Market VIP First $500 million 0.285%
Next $500 million 0.270%
Next $1.0 billion 0.255%
Thereafter 0.240%
DWS Small Cap Growth VIP First $250 million 0.550%
Next $750 million 0.525%
Thereafter 0.500%
II-63
FUND NAME MANAGEMENT FEE RATE
DWS Strategic Income VIP First $250 million 0.550%
Next $750 million 0.520%
Next $1.5 billion 0.500%
Next $2.5 billion 0.480%
Next $2.5 billion 0.450%
Next $2.5 billion 0.430%
Next $2.5 billion 0.410%
Thereafter 0.390%
DWS Strategic Value VIP First $250 million 0.665%
Next $750 million 0.635%
Next $1.5 billion 0.615%
Next $2.5 billion 0.595%
Next $2.5 billion 0.565%
Next $2.5 billion 0.555%
Next $2.5 billion 0.545%
Thereafter 0.535%
DWS Technology VIP First $250 million 0.665%
Next $750 million 0.635%
Next $1.5 billion 0.615%
Next $2.5 billion 0.595%
Next $2.5 billion 0.565%
Next $2.5 billion 0.555%
Next $2.5 billion 0.545%
Thereafter 0.535%
DWS Turner Mid Cap Growth VIP First $250 million 0.715%
Next $250 million 0.700%
Next $500 million 0.685%
Thereafter 0.670%
Money Market Funds
Cash Account Trust - Government & First $500 million 0.120%
Agency Securities Portfolio Next $500 million 0.100%
Next $1.0 billion 0.075%
Next $1.0 billion 0.060%
Thereafter 0.050%/(6)/
Cash Account Trust - Money Market First $500 million 0.220%
Portfolio Next $500 million 0.200%
Next $1.0 billion 0.175%
Next $2.0 billion 0.160%
Thereafter 0.150%/(3)(6)/
Cash Account Trust - Tax- Exempt First $500 million 0.120%
Portfolio Next $500 million 0.100%
Next $1.0 billion 0.075%
Next $1.0 billion 0.060%
Thereafter 0.050%/(6)/
Cash Management Fund Institutional 0.00%/(7)/
Cash Management Portfolio First $3 billion 0.150%
Next $4.5 billion 0.1325%
Thereafter 0.120%
II-64
FUND NAME MANAGEMENT FEE RATE
Cash Reserve Fund, Inc. - Prime 0.00%/(7)/
Series
Cash Reserves Fund Institutional 0.00%/(7)/
Central Cash Management Fund 0.00%
DWS Money Market Series 0.000%/(7)/
DWS Money Market Prime Series First $215 million 0.400%
Next $335 million 0.275%
Next $250 million 0.200%
Next $800 million 0.150%
Next $800 million 0.140%
Next $800 million 0.130%
Thereafter 0.120%
Investors Cash Trust - Treasury 0.050%
Portfolio
NY Tax Free Money Fund 0.120%
Tax-Exempt California Money Market First $500 million 0.120%
Fund Next $500 million 0.100%
Next $1.0 billion 0.075%
Next $1.0 billion 0.060%
Thereafter 0.050%
Tax Free Money Fund Investment 0.150%
Daily Assets Fund Institutional 0.100%
(1) Shareholders of a fund also indirectly bear their pro rata share of the
operating expenses, including the management fee paid to DIMA, of the
underlying DWS Funds in which a fund invests.
(2) In the event that the fund's assets are completely and irreversibly
allocated to its fixed income component, the management fee rate will
decrease to 0.300%
(3) The fund's management fee rate includes administrative services provided
by DIMA which are necessary for the Fund's operation as an open-end
investment company.
(4) The fund invests substantially all its assets in DWS Equity 500 Index
Portfolio (Master Fund). DIMA receives a management fee from the Master
Fund. In the event that the fund withdraws its investment in the Master
Fund, DIMA would become responsible for directly managing the assets of
the fund. In such event, the fund would pay DIMA a management fee at an
annual rate of 0.05% or 0.15% of the daily net assets of DWS Equity 500
Index Fund or DWS S&P 500 Index Fund, respectively.
(5) The fund currently invests substantially all its assets in other DWS
Funds. As a result, shareholders of the fund also indirectly bear their
pro rata share of the operating expenses, including the management fee
paid to DIMA, of the underlying DWS Funds in which the fund invests. In
the future, the fund may invest some or all of its assets in other
securities that are not considered DWS Funds (Other Assets). If the
fund's assets were invested in Other Assets, the management fee paid to
DIMA would equal the sum of (a) 0.200% of the daily assets invested in
DWS Funds and (b) 1.200% of the daily assets invested in Other Assets.
(6) The fund's management fee is computed based on the combined average daily
net assets of the Government & Agency Securities Portfolio, Money Market
Portfolio and Tax-Exempt Portfolio, each a series of Cash Account Trust,
and allocated among each fund based upon relative net assets. DIMA has
agreed to reduce its management fee for Government & Agency Securities
Portfolio such that after the allocation of the fee to each series of
Cash Account Trust, the amount payable by Government & Agency Securities
Portfolio will be limited to 0.05% of its average daily net assets.
II-65
(7) The fund invests substantially all its assets in Cash Management
Portfolio (the Master Fund). DIMA receives a management fee from the
Master Fund. In the event that the fund withdraws its investment in the
Master Fund, DIMA would become responsible for directly managing the
assets of the fund. In such event, the fund would pay DIMA a management
fee directly and for DWS Money Market Series the management fee rate
would be as follows: (a) first $1.5 billion 0.165%; (b) next $1.75
billion 0.150%; (c) next $1.75 billion 0.135%; and (d) thereafter 0.120%.
UNITARY FEE. For DWS S&P 500 Plus Fund only, for the period between January 1,
2009 and December 31, 2009, the fund will pay to DIMA a Unitary Fee, calculated
each day and payable monthly, equal to an annual rate of 0.50% of the fund's
average daily net assets.
Beginning on January 1, 2010, the Unitary Fee will continue to be calculated
daily and paid monthly, but will equal an annual rate of 0.50% (Base Fee),
adjusted as described below, of the fund's average daily net assets for the
previous 365-day period (Performance Period). The Base Fee will be adjusted to
as high as 1.00% or as low as zero, depending on how the fund's investment
performance (based on the total return of Class S shares, which do not bear
Rule 12b-1 fees) for the Performance Period compares with a benchmark equal to
the sum of the investment record of the S&P 500 Index plus 0.50% (Performance
Benchmark) over the Performance Period. If the fund's investment performance
equals the Performance Benchmark, then DIMA will earn the Base Fee of 0.50%. If
the fund's investment performance falls below the Performance Benchmark, then
the Unitary Fee will decrease by the difference between them, but not below
zero. If the fund's investment performance exceeds the Performance Benchmark,
then the Unitary Fee will increase by the difference between them, but not
above 1.00%. In effect, the Unitary Fee after January 1, 2010 will equal the
amount by which the investment performance of the Class S shares of the fund
exceeds the performance of the S&P 500 Index over a given Performance Period,
subject to a cap of 1.00% and a floor of zero. The chart below provides
examples of the Unitary Fee that the fund would pay to DIMA assuming various
returns on Class S shares:
INVESTMENT PERFORMANCE DURING
PERFORMANCE PERIOD UNITARY FEE
Exceeds the S&P 500 Index by 1.00% or more 1.00%
Exceeds the S&P 500 Index by 0.75% 0.75%
Exceeds the S&P 500 Index by 0.50% 0.50%
Exceeds the S&P 500 Index by 0.25% 0.25%
Equals or is less than the S&P 500 Index 0.00%
Therefore, if the fund's Class S investment performance is at or below the S&P
500 Index, the shareholders of the fund will neither pay the Unitary Fee nor
bear the fund's day-to-day operating expenses (with the exceptions noted above,
such as Rule 12b-1 fees). To the extent Class A, Class B, Class C and Class R
shares of the fund have higher expenses than Class S shares, using Class S
shares as the measuring class for purposes of calculating the performance
adjustment to the Unitary Fee could result in Class A, Class B, Class C and
Class R shares bearing a larger positive performance adjustment and a smaller
negative performance adjustment than would be the case if each such class's own
performance were considered.
FEE PAYABLE TO DIMA FOR ADMINISTRATIVE SERVICES. Money Market Portfolio, DWS
Dreman Mid Cap Value Fund, DWS Dreman Small Cap Value Fund and DWS Strategic
Value Fund, do not pay DIMA a separate administrative services fee. Each fund,
except those noted below, pays DIMA an administrative services fee, computed
daily and paid monthly, of 0.100% of a fund's average daily net assets. DWS
Equity 500 Index Portfolio and Cash Management Portfolio each pay DIMA an
administrative services, computed daily and paid monthly, of 0.030% of a fund's
average daily net assets.
FEES PAYABLE TO DIFA FOR FUND ACCOUNTING SERVICES. Currently, DIFA receives no
fee for its services to Money Market Portfolio, a series Cash Account Trust,
DWS Dreman Small Cap Value Fund, and DWS Strategic Value Fund; however, subject
to Board approval, DIFA may seek payment from a fund for fund accounting
services in the future.
DIFA receives an annual fee from DWS Dreman Mid Cap Value Fund for fund
accounting services equal to 0.015% of its average daily net assets.
II-66
FEE PAYABLE TO DISC FOR TRANSFER AGENCY AND SHAREHOLDER SERVICES. DISC receives
an annual service fee for each account of a fund, based on the type of account.
For open retail accounts, the fee is a flat fee ranging from $20.99 to $24.09
per account, for open wholesale money funds the fee is $35.55 per account,
while for certain retirement accounts serviced on the recordkeeping system of
ExpertPlan, Inc., the fee is a flat fee up to $3.91 per account (as of February
2009, indexed to inflation) plus an asset based fee of up to 0.25% of average
net assets. 1/12th of the annual service charge for each account is charged and
payable to DISC each month. A fee is charged for any account which at any time
during the month had a share balance in a fund. Smaller fees are also charged
for closed accounts for which information must be retained on DISC's system for
up to 18 months after closing for tax reporting purposes.
Certain out-of-pocket expenses incurred by DISC, including expenses of printing
and mailing routine fund disclosure documents, costs of record retention and
transaction processing costs are reimbursed by a fund or are paid directly by a
fund. Certain additional out-of-pocket expenses, including costs of computer
hardware and software, third party record-keeping fees in excess of 0.25%, and
processing of proxy statements, may only be reimbursed by a fund with the prior
approval of the Board.
II-67
PART II: APPENDIX II-D - FINANCIAL SERVICES FIRMS' COMPENSATION
GENERAL. DIDI may pay compensation to financial intermediaries in connection
with the sale of fund shares as described below. In addition, financial
intermediaries may receive compensation for post-sale administrative services
from DIDI or directly from a fund as described below.
In addition to the discounts or commissions described herein and in the
prospectus, DIDI, the Advisor or its affiliates may pay or allow additional
discounts, commissions or promotional incentives, in the form of cash, to firms
that sell shares of a fund. In some instances, such amounts may be offered only
to certain firms that sell or are expected to sell during specified time
periods certain minimum amounts of shares of a fund, or other funds
underwritten by DIDI (see Financial Intermediary Support Payments under Part
II: Purchase and Redemption of Shares).
Banks and other financial services firms may provide administrative services
related to order placement and payment to facilitate transactions in shares of
a fund for their clients, and DIDI may pay them a transaction fee up to the
level of the discount or commission allowable or payable to dealers.
RETAIL FUNDS: CLASS A, B, C AND R
CLASS A SHARES: The fund receives the entire net asset value of all its Class A
shares sold. DIDI, as principal underwriter, retains the sales charge on sales
of Class A shares from which it allows discounts from the applicable public
offering price to investment dealers, which discounts are uniform for all
dealers in the United States and its territories. The normal discount is set
forth in the sales charge tables set forth in APPENDIX II-F. Upon notice to all
dealers, DIDI may re-allow to dealers up to the full applicable Class A sales
charge during periods and for transactions specified in such notice and such
re-allowances may be based upon attainment of minimum sales levels. During
periods when 90% or more of the sales charge is re-allowed, such dealers may be
deemed to be underwriters as that term is defined in the 1933 Act.
DIDI may at its discretion compensate investment dealers or other financial
services firms in connection with the sale of Class A shares of a fund in
accordance with the Large Order NAV Purchase Privilege and one of the
compensation schedules up to the following amounts:
COMPENSATION SCHEDULE #1: COMPENSATION SCHEDULE #2:
RETAIL SALES AND DWS INVESTMENTS FLEX PLAN/(1)/ DWS INVESTMENTS RETIREMENT PLAN/(2)/
AS A PERCENTAGE OF AS A PERCENTAGE OF
AMOUNT OF SHARES SOLD NET ASSET VALUE AMOUNT OF SHARES SOLD NET ASSET VALUE