0000811911 2012-02-02 2013-02-01 0000811911 tcmmf:S000006315Member tcmmf:InstitutionalSharesMember 2012-02-02 2013-02-01 0000811911 tcmmf:S000006315Member tcmmf:InstitutionalSharesMember tcmmf:C000068071Member 2012-02-02 2013-02-01 0000811911 tcmmf:S000006315Member tcmmf:PremierSharesMember 2012-02-02 2013-02-01 0000811911 tcmmf:S000006315Member tcmmf:PremierSharesMember tcmmf:C000017380Member 2012-02-02 2013-02-01 pure iso4217:USD 485BPOS 2012-09-30 TAX-EXEMPT CALIFORNIA MONEY MARKET FUND 0000811911 false 2013-01-28 2013-02-01 2013-02-01 Tax-Exempt California Money Market Fund Investment Objective The fund seeks maximum current income that is exempt from federal and State of California income taxes to the extent consistent with stability of capital. Fees and Expenses of the Fund These are the fees and expenses you may pay when you buy and hold shares. SHAREHOLDER FEES (paid directly from your investment) 0 ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a % of the value of your investment) 0.0012 0 0.0028 0.004 -0.0015 0.0025 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 each period) remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 26 113 209 491 Principal Investment Strategy The Advisor has contractually agreed through January 31, 2014, 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 0.25% (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expenses) for Institutional Shares. The agreement may only be terminated with the consent of the fund's Board. January 31, 2014 To pursue its goal, the fund normally invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in municipal securities and other securities whose income is exempt from State of California and federal income tax and from the federal alternative minimum tax (AMT). The fund is managed in accordance with Rule 2a-7 under the Investment Company Act of 1940, as amended, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. The fund may invest in municipal trust receipts (MTRs), general obligation and revenue notes and bonds, municipal obligations backed by third parties and other municipal instruments paying a fixed, variable or floating interest rate. This fund is designed for investors in a moderate to high income tax bracket who are interested in income exempt from State of California and federal income tax and AMT along with the liquidity and stability that a money market fund is designed to offer. 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. 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. 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. A low interest rate environment may prevent the fund from providing a positive yield or paying fund expenses out of current income and, at times, could impair the fund's ability to maintain a stable $1.00 share price. Over time, the total return of a money market fund may not keep pace with inflation, which could result in a net loss of purchasing power for long-term investors. Credit risk. The fund's performance could be hurt if an issuer of a security suffers an adverse change in financial condition that results in the issuer not making timely payments of interest or principal, a security downgrade or inability to meet a financial obligation. Focus risk California municipal securities. Because the fund focuses its investments in California 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 California. For example, the State of California relies heavily on income tax revenues and these revenues are likely to drop during economic downturns, but covering any shortfall by increasing taxes could be difficult due to California law regarding the imposition of new taxes. Examples of other factors include the costs and disruption caused by natural disasters, a fiscal crisis brought on by a national or regional economic downturn, and costs of maintaining certain government programs. California could also face severe fiscal difficulties, for example, from an economic downturn, increased costs for domestic security and reduced monetary support from the federal government. Over time, these issues may impair the state's ability to repay its obligations. The deterioration of California's fiscal situation as a result of the recent economic downturn increases the risk of investing in California municipal securities, including the risk of potential issuer default, and also heightens the risk that the prices of California municipal securities will experience greater volatility. A default or credit rating downgrade of a small number of municipal security issuers could affect the market values and marketability of all California municipal securities and adversely impact the fund's performance. Liquidity risk. The liquidity of portfolio securities can deteriorate rapidly due to credit events affecting issuers or guarantors or due to general market conditions and a lack of willing buyers. When there are no willing buyers and an instrument cannot be readily sold at a desired time or price, the fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell one or more portfolio securities can adversely affect the fund's ability to maintain a $1.00 share price or prevent the fund from being able to take advantage of other investment opportunities. Unusual market conditions, an unusually high volume of redemption requests or other similar conditions could cause the fund to be unable to pay redemption proceeds within a short period of time. If the fund is forced to sell securities at an unfavorable time and/or under unfavorable conditions, such sales may adversely affect the fund's ability to maintain a $1.00 share price. 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 a 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, 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. Ultimately, any unexpected behavior in interest rates could increase the volatility of the fund's yield and could hurt fund performance. Prepayments could also create capital gains tax liability in some instances. Regulatory risk. In 2010, the SEC adopted amendments to then-existing money market fund regulations, imposing new liquidity, credit quality, and maturity requirements on all money market funds. In November 2012, the Financial Stability Oversight Council (FSOC), a board of U.S. regulators established by the Dodd-Frank Act, proposed recommendations for money market fund reform. If the SEC were to adopt one or more of the FSOC proposed recommendations in the future, or if FSOC were to take other steps to establish similar regulations of money market funds in the future, such regulatory action may affect the fund's operations and/or return potential. 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. An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. 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.dbadvisorsliquidity.com/US (the Web site does not form a part of this prospectus) or call the phone number included in this prospectus. How a fund's returns vary from year to year can give an idea of its risk. www.dbadvisorsliquidity.com/US Past performance may not indicate future results. CALENDAR YEAR TOTAL RETURNS (%) (Institutional Shares) Returns for other classes were different and are not shown here. 0.0043 0.0016 0.0005 0.0004 Best Quarter: 2009-12-31 0.0016 Worst Quarter: 2012-03-31 0 Best Quarter: 0.16%, Q4 2009 Worst Quarter: 0.00%, Q1 2012 Average Annual Total Returns (for periods ended 12/31/2012 expressed as a %) 2008-08-26 0.0004 0.0032 Total returns would have been lower if operating expenses had not been reduced. <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleShareholderFeesTAX-EXEMPTCALIFORNIAMONEYMARKETFUND column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleAnnualFundOperatingExpensesTAX-EXEMPTCALIFORNIAMONEYMARKETFUND column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleExpenseExampleTransposedTAX-EXEMPTCALIFORNIAMONEYMARKETFUND column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleAverageAnnualTotalReturnsTransposedTAX-EXEMPTCALIFORNIAMONEYMARKETFUND column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleAnnualTotalReturnsTAX-EXEMPTCALIFORNIAMONEYMARKETFUNDBarChart column period compact * ~</div> Tax-Exempt California Money Market Fund Investment Objective The fund seeks maximum current income that is exempt from federal and State of California income taxes to the extent consistent with stability of capital. Fees and Expenses of the Fund These are the fees and expenses you may pay when you buy and hold shares. SHAREHOLDER FEES (paid directly from your investment) 0 ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a % of the value of your investment) 0.0012 0.0033 0.0051 0.0096 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: 98 306 531 1178 Principal Investment Strategy To pursue its goal, the fund normally invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in municipal securities and other securities whose income is exempt from State of California and federal income tax and from the federal alternative minimum tax (AMT). The fund is managed in accordance with Rule 2a-7 under the Investment Company Act of 1940, as amended, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. The fund may invest in municipal trust receipts (MTRs), general obligation and revenue notes and bonds, municipal obligations backed by third parties and other municipal instruments paying a fixed, variable or floating interest rate. This fund is designed for investors in a moderate to high income tax bracket who are interested in income exempt from State of California and federal income tax and AMT along with the liquidity and stability that a money market fund is designed to offer. 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. 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. 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. A low interest rate environment may prevent the fund from providing a positive yield or paying fund expenses out of current income and, at times, could impair the fund's ability to maintain a stable $1.00 share price. Over time, the total return of a money market fund may not keep pace with inflation, which could result in a net loss of purchasing power for long-term investors. Credit risk. The fund's performance could be hurt if an issuer of a security suffers an adverse change in financial condition that results in the issuer not making timely payments of interest or principal, a security downgrade or inability to meet a financial obligation. Focus risk California municipal securities. Because the fund focuses its investments in California 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 California. For example, the State of California relies heavily on income tax revenues and these revenues are likely to drop during economic downturns, but covering any shortfall by increasing taxes could be difficult due to California law regarding the imposition of new taxes. Examples of other factors include the costs and disruption caused by natural disasters, a fiscal crisis brought on by a national or regional economic downturn, and costs of maintaining certain government programs. California could also face severe fiscal difficulties, for example, from an economic downturn, increased costs for domestic security and reduced monetary support from the federal government. Over time, these issues may impair the state's ability to repay its obligations. The deterioration of California's fiscal situation as a result of the recent economic downturn increases the risk of investing in California municipal securities, including the risk of potential issuer default, and also heightens the risk that the prices of California municipal securities will experience greater volatility. A default or credit rating downgrade of a small number of municipal security issuers could affect the market values and marketability of all California municipal securities and adversely impact the fund's performance. Liquidity risk. The liquidity of portfolio securities can deteriorate rapidly due to credit events affecting issuers or guarantors or due to general market conditions and a lack of willing buyers. When there are no willing buyers and an instrument cannot be readily sold at a desired time or price, the fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell one or more portfolio securities can adversely affect the fund's ability to maintain a $1.00 share price or prevent the fund from being able to take advantage of other investment opportunities. Unusual market conditions, an unusually high volume of redemption requests or other similar conditions could cause the fund to be unable to pay redemption proceeds within a short period of time. If the fund is forced to sell securities at an unfavorable time and/or under unfavorable conditions, such sales may adversely affect the fund's ability to maintain a $1.00 share price. 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 a 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, 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. Ultimately, any unexpected behavior in interest rates could increase the volatility of the fund's yield and could hurt fund performance. Prepayments could also create capital gains tax liability in some instances. Regulatory risk. In 2010, the SEC adopted amendments to then-existing money market fund regulations, imposing new liquidity, credit quality, and maturity requirements on all money market funds. In November 2012, the Financial Stability Oversight Council (FSOC), a board of U.S. regulators established by the Dodd-Frank Act, proposed recommendations for money market fund reform. If the SEC were to adopt one or more of the FSOC proposed recommendations in the future, or if FSOC were to take other steps to establish similar regulations of money market funds in the future, such regulatory action may affect the fund's operations and/or return potential. 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 included in this prospectus. CALENDAR YEAR TOTAL RETURNS (%) (Premier Shares) Returns for other classes were different and are not shown here. 0.0033 0.0054 0.0167 0.0239 0.027 0.0144 0.0011 0.001 0.0001 0.0004 Best Quarter: 2007-09-30 0.0069 Worst Quarter: 2011-03-31 0 Best Quarter: 0.69%, Q3 2007 Worst Quarter: 0.00%, Q1 2011 Average Annual Total Returns (for periods ended 12/31/2012 expressed as a %) 1990-12-13 0.0004 0.0034 0.0095 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. An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. How a fund's returns vary from year to year can give an idea of its risk. www.dws-investments.com Past performance may not indicate future results. Total returns would have been lower if operating expenses hadn't been reduced. <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleShareholderFeesTAX-EXEMPTCALIFORNIAMONEYMARKETFUNDPremierShares column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleAnnualFundOperatingExpensesTAX-EXEMPTCALIFORNIAMONEYMARKETFUNDPremierShares column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleExpenseExampleTransposedTAX-EXEMPTCALIFORNIAMONEYMARKETFUNDPremierShares column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleAnnualTotalReturnsTAX-EXEMPTCALIFORNIAMONEYMARKETFUNDPremierSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.dbadvisorsliquidity.com/role/ScheduleAverageAnnualTotalReturnsTransposedTAX-EXEMPTCALIFORNIAMONEYMARKETFUNDPremierShares column period compact * ~</div>