UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number: 811-07507
Deutsche DWS Investments VIT Funds
(Exact Name of Registrant as Specified in Charter)
875 Third Avenue
New York, NY 10022-6225
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (212) 454-4500
Diane Kenneally
100 Summer Street
Boston, MA 02110
(Name and Address of Agent for Service)
| Date of fiscal year end: | 12/31 |
| Date of reporting period: | 12/31/2021 |
| ITEM 1. | REPORT TO STOCKHOLDERS |
| (a) |
December 31, 2021
Annual Report
Deutsche DWS Investments VIT Funds
DWS Small Cap Index VIP
Contents
This report must be preceded or accompanied by a prospectus.
To obtain an additional prospectus or summary prospectus, if available, call (800) 728-3337 or your financial representative. We advise you to consider the Fund’s objectives, risks, charges and expenses carefully before investing. The summary
prospectus and prospectus contain this and other important information about the Fund. Please read the prospectus carefully before you invest.
Stocks may decline in value. Various factors, including
costs, cash flows and security selection, may cause the Fund’s performance to differ from that of the index. Smaller company stocks tend to be more volatile than medium-sized or large company stocks. The Fund may lend securities to approved
institutions. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Please read the prospectus for details.
War, terrorism, economic uncertainty, trade disputes,
public health crises (including the ongoing pandemic spread of the novel coronavirus) and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse
effects on the Fund and its investments.
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its
subsidiaries such as DWS Distributors, Inc. which offers investment products or DWS Investment Management Americas, Inc. and RREEF America L.L.C. which offer advisory services.
DWS Distributors, Inc., 222 South Riverside Plaza, Chicago, IL
60606, (800) 621-1148
NOT FDIC/NCUA
INSURED NO BANK GUARANTEE MAY LOSE VALUE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT
AGENCY
| 2 | | DWS Small Cap Index VIP |
| Performance Summary | December 31, 2021 (Unaudited) |
Fund performance shown
is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth
more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please contact your participating insurance company for the Fund’s most recent month-end performance. Performance figures for
Classes A and B differ because each class maintains a distinct expense structure. Performance does not reflect charges and fees (“contract charges”) associated with the separate account that invests in the Fund or any variable life
insurance policy or variable annuity contract for which the Fund is an investment option. These charges and fees will reduce returns.
The gross expense ratios of the Fund, as stated in the fee
table of the prospectus dated May 1, 2021 are 0.50% and 0.79% for Class A and Class B shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.
Generally accepted accounting principles require
adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial
highlights.
Growth of an Assumed $10,000
Investment
| Comparative Results | ||||||
| DWS Small Cap Index VIP | 1-Year | 3-Year | 5-Year | 10-Year | ||
| Class A | Growth of $10,000 | $11,450 | $17,124 | $17,379 | $33,875 | |
| Average annual total return | 14.50% | 19.64% | 11.69% | 12.98% | ||
| Russell 2000 Index | Growth of $10,000 | $11,482 | $17,290 | $17,639 | $34,652 | |
| Average annual total return | 14.82% | 20.02% | 12.02% | 13.23% | ||
| DWS Small Cap Index VIP | 1-Year | 3-Year | 5-Year | 10-Year | ||
| Class B | Growth of $10,000 | $11,418 | $16,980 | $17,151 | $32,981 | |
| Average annual total return | 14.18% | 19.30% | 11.39% | 12.67% | ||
| Russell 2000 Index | Growth of $10,000 | $11,482 | $17,290 | $17,639 | $34,652 | |
| Average annual total return | 14.82% | 20.02% | 12.02% | 13.23% | ||
| The growth of $10,000 is cumulative. | ||||||
| DWS Small Cap Index VIP | | 3 |
| Management Summary | December 31, 2021 (Unaudited) |
For the 12 months ended
December 31, 2021, the Fund gained 14.50% (Class A shares, unadjusted for contract charges), compared with the 14.82% return of the Russell 2000® Index. The difference in
performance is typically driven by transaction costs and Fund expenses. The Fund periodically invests in equity index futures in order to keep the portfolio’s exposures in line with those of the index. This strategy had a neutral impact on
performance.
Small-cap stocks were helped by the
backdrop of improving economic growth and robust corporate earnings brought about by the gradual resumption of normal business conditions. Monetary policy also remained supportive for most of the period, with the U.S. Federal Reserve keeping
interest rates near zero and continuing its stimulative quantitative easing program. Multiple rounds of fiscal stimulus provided further fuel for investor sentiment.
The year was interesting for small caps in the sense that much
of the gain for 2021 was already in the books by mid-February. The Russell 2000 Index posted impressive gains in the first six weeks of the year, when higher-risk asset classes were still in the midst of the rally that followed the first vaccine
approval in late 2020. The index then proceeded to trade within a fairly defined range until November, at which point it broke out to a new high. This upswing proved to be short-lived, however, as the emergence of the omicron variant of COVID-19
caused the index to fall back into its previous range by the end of the month. After experiencing some choppiness in December, the index ultimately closed the year at the same level as where it stood in early February. Still, 2021 marked the third
year in a row that the index has delivered a double-digit gain, as well as the fifth year of the past six.
Although small-cap equities produced a strong absolute return
in 2021, they underperformed large caps. The shortfall stemmed primarily from the increasing dominance of a handful of mega-cap technology-related companies in the major large-company indexes. These stocks registered outsized returns as a group in
2021, leading to outperformance for the broader large-cap category.
While growth stocks outperformed value in the large-cap space,
the opposite was true in small caps. The Russell 2000® Value Index rose 28.27% in 2021, far ahead of the 2.83% return for the Russell 2000® Growth Index.
At the sector level, energy was by far the top performer with
a return well in excess of the Russell 2000 Index. Smaller energy companies logged significant gains as strength in oil and natural gas prices boosted their earnings and strengthened their balance sheets. However, the effect on overall performance
was limited due to the sector’s modest weighting in the benchmark. The real estate, financials, and consumer discretionary sectors — all of which benefited from the acceleration in economic growth — were also top performers. On the
other hand, health care was the only sector to post a negative return. The majority of stocks in the sector experienced a double-digit loss for the year, as biotechnology and pharmaceutical companies without current profits suffered sharp declines.
Since health care has an index weighting of more than 20%, its weak performance was a sizable drag on returns in 2021. The defensive utilities sector, while finishing with a gain, also lagged the overall small-cap category.
Brent Reeder
Senior Vice President, Northern Trust Investments, Inc., Subadvisor to the
Fund
Portfolio Manager
The views expressed reflect those of the portfolio management
team only through the end of the period of the report as stated on the cover. The management team’s views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance
is no guarantee of future results. Current and future portfolio holdings are subject to risk.
Terms to Know
The Russell 2000
Index is an unmanaged, capitalization-weighted measure of approximately 2,000 of the smallest companies in the Russell 3000® Index.
The Russell 2000 Growth
Index is an unmanaged index that measures the performance of the small-cap growth segment of the U.S. equity universe.
The Russell 2000 Value
Index is an unmanaged index that measures the performance of the small-cap value segment of the U.S. equity universe.
| 4 | | DWS Small Cap Index VIP |
| Portfolio Summary | (Unaudited) |
| Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral) | 12/31/21 | 12/31/20 |
| Common Stocks | 97% | 99% |
| Cash Equivalents | 3% | 1% |
| Government & Agency Obligations | 0% | 0% |
| Warrants | 0% | 0% |
| Corporate Bonds | 0% | — |
| Rights | 0% | 0% |
| 100% | 100% |
| Sector Diversification (As a % of Common Stocks, Rights, Warrants and Corporate Bonds) | 12/31/21 | 12/31/20 |
| Health Care | 18% | 21% |
| Financials | 16% | 16% |
| Industrials | 15% | 16% |
| Information Technology | 15% | 14% |
| Consumer Discretionary | 11% | 13% |
| Real Estate | 7% | 6% |
| Energy | 4% | 2% |
| Materials | 4% | 4% |
| Consumer Staples | 4% | 3% |
| Communication Services | 3% | 2% |
| Utilities | 3% | 3% |
| 100% | 100% |
| Ten Largest Equity Holdings at December 31, 2021 (3.2% of Net Assets) | |
| 1 AMC Entertainment Holdings, Inc. | 0.4% |
| Operator of theatrical exhibition business | |
| 2 Synaptics, Inc. | 0.4% |
| Developer of custom designed user interface solutions | |
| 3 Lattice Semiconductor Corp. | 0.3% |
| Manufacturer of high speed programmable logic devices | |
| 4 EastGroup Properties, Inc. | 0.3% |
| Developer of industrial properties | |
| 5 BJ's Wholesale Club Holdings, Inc. | 0.3% |
| Operator of warehouse club | |
| 6 Tetra Tech, Inc. | 0.3% |
| Provider of management consulting and technical services | |
| 7 Saia, Inc. | 0.3% |
| Provider of trucking transportation | |
| 8 Ovintiv, Inc. | 0.3% |
| Producer of natural gas, oil and natural gas liquids | |
| 9 Tenet Healthcare Corp. | 0.3% |
| Operator of specialty and general hospitals | |
| 10 WillScot Mobile Mini Holdings Corp | 0.3% |
| Provider of modular space and portable storage solutions | |
Portfolio holdings and characteristics are subject to
change.
For more complete details about the
Fund’s investment portfolio, see page 6.
Following the Fund’s fiscal first and third
quarter-end, a complete portfolio holdings listing is posted on dws.com, and is available free of charge by contacting your financial intermediary, or if you are a direct investor, by calling (800) 728-3337. In addition, the portfolio holdings
listing is filed with the SEC on the Fund’s Form N-PORT and will be available on the SEC’s Web site at sec.gov. Additional portfolio holdings for the Fund are also posted on dws.com from time to time. Please see the Fund’s current
prospectus for more information.
| DWS Small Cap Index VIP | | 5 |
| Investment Portfolio | as of December 31, 2021 |
The accompanying notes are an integral part of the financial
statements.
| 6 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 7 |
The accompanying notes are an integral part of the financial
statements.
| 8 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 9 |
The accompanying notes are an integral part of the financial
statements.
| 10 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 11 |
The accompanying notes are an integral part of the financial
statements.
| 12 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 13 |
The accompanying notes are an integral part of the financial
statements.
| 14 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 15 |
The accompanying notes are an integral part of the financial
statements.
| 16 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 17 |
The accompanying notes are an integral part of the financial
statements.
| 18 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 19 |
The accompanying notes are an integral part of the financial
statements.
| 20 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 21 |
The accompanying notes are an integral part of the financial
statements.
| 22 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 23 |
The accompanying notes are an integral part of the financial
statements.
| 24 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 25 |
The accompanying notes are an integral part of the financial
statements.
| 26 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 27 |
The accompanying notes are an integral part of the financial
statements.
| 28 | | DWS Small Cap Index VIP |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 29 |
A summary of the Fund’s transactions with
affiliated investments during the year ended December 31, 2021 are as follows:
| Value
($) at 12/31/2020 |
Purchases
Cost ($) |
Sales
Proceeds ($) |
Net
Realized Gain/ (Loss) ($) |
Net
Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital
Gain Distributions ($) |
Number
of Shares at 12/31/2021 |
Value
($) at 12/31/2021 |
| Securities Lending Collateral 8.7% | ||||||||
| DWS Government & Agency Securities Portfolio "DWS Government Cash Institutional Shares", 0.01% (d) (e) | ||||||||
| 21,733,499 | 18,849,041 (f) | — | — | — | 228,125 | — | 40,582,540 | 40,582,540 |
| Cash Equivalents 2.5% | ||||||||
| DWS Central Cash Management Government Fund, 0.05% (d) | ||||||||
| 1,628,225 | 116,473,539 | 106,449,371 | — | — | 3,231 | — | 11,652,393 | 11,652,393 |
| 23,361,724 | 135,322,580 | 106,449,371 | — | — | 231,356 | — | 52,234,933 | 52,234,933 |
| * | Non-income producing security. |
| (a) | All or a portion of these securities were on loan. In addition, "Other Assets and Liabilities, Net" may include pending sales that are also on loan. The value of securities loaned at December 31, 2021 amounted to $40,072,032, which is 8.5% of net assets. |
| (b) | Investment was valued using significant unobservable inputs. |
| (c) | Annualized yield at time of purchase; not a coupon rate. |
| (d) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (e) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $1,864,058. |
| (f) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended December 31, 2021. |
| 144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
At December 31, 2021, open futures contracts
purchased were as follows:
| Futures | Currency | Expiration
Date |
Contracts | Notional
Amount ($) |
Notional
Value ($) |
Unrealized
Appreciation ($) |
| Russell E-Mini 2000 Index | USD | 3/18/2022 | 121 | 13,415,025 | 13,568,940 | 153,915 |
Currency
Abbreviation(s)
| USD | United States Dollar |
The accompanying notes are an integral part of the financial statements.
| 30 | | DWS Small Cap Index VIP |
For information on the Fund’s policy and additional
disclosures regarding futures contracts, please refer to the Derivatives section of Note B in the accompanying Notes to Financial Statements.
Fair Value Measurements
Various inputs are used in determining the value of the Fund's
investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest
rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication
of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of December
31, 2021 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| Assets | Level 1 | Level 2 | Level 3 | Total |
| Common Stocks (a) | $ 454,832,052 | $ — | $ — | $ 454,832,052 |
| Rights | — | — | 353 | 353 |
| Warrants | 1,679 | — | — | 1,679 |
| Corporate Bonds | — | 990 | — | 990 |
| Government & Agency Obligations | — | 1,519,972 | — | 1,519,972 |
| Short-Term Investments (a) | 52,234,933 | — | — | 52,234,933 |
| Derivatives (b) | ||||
| Futures Contracts | 153,915 | — | — | 153,915 |
| Total | $ 507,222,579 | $1,520,962 | $353 | $ 508,743,894 |
| (a) | See Investment Portfolio for additional detailed categorizations. |
| (b) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 31 |
| Statement of Assets and Liabilities |
The accompanying notes are an integral part of
the financial statements.
| 32 | | DWS Small Cap Index VIP |
Statements of Changes in Net Assets
| Years Ended December 31, | ||
| Increase (Decrease) in Net Assets | 2021 | 2020 |
| Operations: | ||
| Net investment income | $ 3,091,785 | $ 3,304,892 |
| Net realized gain (loss) | 65,251,636 | 24,331,163 |
| Change
in net unrealized appreciation (depreciation) |
(9,537,761) | 44,444,817 |
| Net increase (decrease) in net assets resulting from operations | 58,805,660 | 72,080,872 |
| Distributions to shareholders: | ||
| Class A | (27,860,902) | (36,874,155) |
| Class B | (2,609,130) | (3,407,812) |
| Total distributions | (30,470,032) | (40,281,967) |
| Fund share transactions: | ||
| Class A | ||
| Proceeds from shares sold | 98,120,413 | 97,628,393 |
| Reinvestment of distributions | 27,860,902 | 36,874,155 |
| Payments for shares redeemed | (112,716,499) | (129,334,937) |
| Net increase (decrease) in net assets from Class A share transactions | 13,264,816 | 5,167,611 |
| Class B | ||
| Proceeds from shares sold | 9,013,498 | 4,372,633 |
| Reinvestment of distributions | 2,609,130 | 3,407,812 |
| Payments for shares redeemed | (8,406,842) | (6,383,154) |
| Net increase (decrease) in net assets from Class B share transactions | 3,215,786 | 1,397,291 |
| Increase (decrease) in net assets | 44,816,230 | 38,363,807 |
| Net assets at beginning of period | 424,420,860 | 386,057,053 |
| Net assets at end of period | $ 469,237,090 | $ 424,420,860 |
| Other Information | ||
| Class A | ||
| Shares outstanding at beginning of period | 22,246,452 | 20,802,116 |
| Shares sold | 5,142,943 | 7,293,317 |
| Shares issued to shareholders in reinvestment of distributions | 1,466,363 | 3,475,415 |
| Shares redeemed | (5,998,538) | (9,324,396) |
| Net increase (decrease) in Class A shares | 610,768 | 1,444,336 |
| Shares outstanding at end of period | 22,857,220 | 22,246,452 |
| Class B | ||
| Shares outstanding at beginning of period | 2,154,282 | 1,943,200 |
| Shares sold | 474,075 | 340,656 |
| Shares issued to shareholders in reinvestment of distributions | 137,106 | 320,584 |
| Shares redeemed | (441,072) | (450,158) |
| Net increase (decrease) in Class B shares | 170,109 | 211,082 |
| Shares outstanding at end of period | 2,324,391 | 2,154,282 |
The accompanying notes are an integral part of the financial
statements.
| DWS Small Cap Index VIP | | 33 |
Financial Highlights
| DWS Small Cap Index VIP — Class A | |||||
| Years Ended December 31, | |||||
| 2021 | 2020 | 2019 | 2018 | 2017 | |
| Selected Per Share Data | |||||
| Net asset value, beginning of period | $17.39 | $16.97 | $14.97 | $18.29 | $16.78 |
| Income (loss) from investment operations: | |||||
| Net investment incomea | .13 | .14 | .17 | .19 | .17 |
| Net realized and unrealized gain (loss) | 2.41 | 2.03 | 3.49 | (2.06) | 2.16 |
| Total from investment operations | 2.54 | 2.17 | 3.66 | (1.87) | 2.33 |
| Less distributions from: | |||||
| Net investment income | (.16) | (.17) | (.18) | (.18) | (.17) |
| Net realized gains | (1.14) | (1.58) | (1.48) | (1.27) | (.65) |
| Total distributions | (1.30) | (1.75) | (1.66) | (1.45) | (.82) |
| Net asset value, end of period | $18.63 | $17.39 | $16.97 | $14.97 | $18.29 |
| Total Return (%)b | 14.50 | 19.43 | 25.22 | (11.23) | 14.33 |
| Ratios to Average Net Assets and Supplemental Data | |||||
| Net assets, end of period ($ millions) | 426 | 387 | 353 | 308 | 360 |
| Ratio of expenses before expense reductions (%)c | .47 | .50 | .53 | .51 | .51 |
| Ratio of expenses after expense reductions (%)c | .39 | .39 | .39 | .41 | .44 |
| Ratio of net investment income (%) | .69 | .99 | 1.04 | 1.03 | 1.00 |
| Portfolio turnover rate (%) | 26 | 23 | 22 | 17 | 15 |
| a | Based on average shares outstanding during the period. |
| b | Total return would have been lower had certain expenses not been reduced. |
| c | Expense ratio does not reflect charges and fees associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option. |
The
accompanying notes are an integral part of the financial statements.
| 34 | | DWS Small Cap Index VIP |
| DWS Small Cap Index VIP — Class B | |||||
| Years Ended December 31, | |||||
| 2021 | 2020 | 2019 | 2018 | 2017 | |
| Selected Per Share Data | |||||
| Net asset value, beginning of period | $17.39 | $16.97 | $14.97 | $18.28 | $16.77 |
| Income (loss) from investment operations: | |||||
| Net investment incomea | .08 | .10 | .12 | .14 | .13 |
| Net realized and unrealized gain (loss) | 2.41 | 2.04 | 3.49 | (2.05) | 2.15 |
| Total from investment operations | 2.49 | 2.14 | 3.61 | (1.91) | 2.28 |
| Less distributions from: | |||||
| Net investment income | (.11) | (.14) | (.13) | (.13) | (.12) |
| Net realized gains | (1.14) | (1.58) | (1.48) | (1.27) | (.65) |
| Total distributions | (1.25) | (1.72) | (1.61) | (1.40) | (.77) |
| Net asset value, end of period | $18.63 | $17.39 | $16.97 | $14.97 | $18.28 |
| Total Return (%)b | 14.18 | 19.09 | 24.87 | (11.42) | 14.03 |
| Ratios to Average Net Assets and Supplemental Data | |||||
| Net assets, end of period ($ millions) | 43 | 37 | 33 | 28 | 35 |
| Ratio of expenses before expense reductions (%)c | .76 | .79 | .81 | .80 | .78 |
| Ratio of expenses after expense reductions (%)c | .67 | .66 | .65 | .67 | .70 |
| Ratio of net investment income (%) | .42 | .71 | .76 | .77 | .76 |
| Portfolio turnover rate (%) | 26 | 23 | 22 | 17 | 15 |
| a | Based on average shares outstanding during the period. |
| b | Total return would have been lower had certain expenses not been reduced. |
| c | Expense ratio does not reflect charges and fees associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option. |
The accompanying
notes are an integral part of the financial statements.
| DWS Small Cap Index VIP | | 35 |
Notes to Financial Statements
| A. | Organization and Significant Accounting Policies |
Deutsche DWS Investments VIT Funds (the “Trust”)
is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. DWS Small Cap Index VIP (the “Fund”)
is a diversified series of the Trust offered to investors. The Fund is an underlying investment vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of certain life insurance companies
(“Participating Insurance Companies”).
Multiple Classes of Shares of Beneficial Interest. The Fund offers two classes of shares (Class A shares and Class B shares). Class B shares are subject to Rule 12b-1 distribution fees under the 1940 Act and recordkeeping fees equal
to an annual rate of up to 0.25% and of up to 0.15%, respectively, of the average daily net assets of the Class B shares of the Fund. Class A shares are not subject to such fees.
Investment income, realized and unrealized gains and losses,
and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class (including the
applicable 12b-1 distribution fees). Differences in class-level expenses may result in payment of different per share dividends by class. All shares have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which require the use of management estimates. Actual results could differ from those estimates. The Fund qualifies as an investment company
under Topic 946 of Accounting Standards Codification of U.S. GAAP. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.
Various inputs are used in determining the value of the
Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar
securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities
valuations may not be an indication of the risk or liquidity associated with investing in those securities.
Equity securities are valued at the most recent sale price
or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. Securities for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the
relevant market or, if a mean cannot be determined, at the most recent bid quotation. Equity securities are generally categorized as Level 1.
Debt securities are valued at prices supplied by independent
pricing services approved by the Fund’s Board. If the pricing services are unable to provide valuations, securities are valued at the most recent bid quotation or evaluated price, as applicable, obtained from one or more broker-dealers. Such
services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. These securities are generally
categorized as Level 2.
Investments in open-end
investment companies are valued at their net asset value each business day and are categorized as Level 1.
Futures contracts are generally valued at the settlement
prices established each day on the exchange on which they are traded and are categorized as Level 1.
Securities and other assets for which market quotations are
not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are
generally categorized as Level 3. In accordance with the Fund’s valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the
security; the existence of any contractual restrictions on the security’s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers
and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company’s or
| 36 | | DWS Small Cap Index VIP |
issuer’s financial statements; an evaluation of the forces that
influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally
traded. The value determined under these procedures may differ from published values for the same securities.
Disclosure about the classification of fair value
measurements is included in a table following the Fund's Investment Portfolio.
Securities Lending. Brown Brothers Harriman & Co., as lending agent, lends securities of the Fund to certain financial institutions under the terms of its securities lending agreement. During the
term of the loans, the Fund continues to receive interest and dividends generated by the securities and to participate in any changes in their market value. The Fund requires the borrowers of the securities to maintain collateral with the Fund
consisting of cash and/or U.S. Treasury Securities having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best efforts to obtain additional collateral on
the next business day to meet required amounts under the securities lending agreement. During the year ended December 31, 2021, the Fund invested the cash collateral into a joint trading account in DWS Government & Agency Securities Portfolio,
an affiliated money market fund managed by DWS Investment Management Americas, Inc. DWS Investment Management Americas, Inc. receives a management/administration fee (0.04% annualized effective rate as of December 31, 2021) on the cash collateral
invested in DWS Government & Agency Securities Portfolio. The Fund receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of borrower rebates and fees paid to a lending
agent. Either the Fund or the borrower may terminate the loan at any time, and the borrower, after notice, is required to return borrowed securities within a standard time period. There may be risks of delay and costs in recovery of securities or
even loss of rights in the collateral should the borrower of the securities fail financially. If the Fund is not able to recover securities lent, the Fund may sell the collateral and purchase a replacement investment in the market, incurring the
risk that the value of the replacement security is greater than the value of the collateral. The Fund is also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest
rate, credit and liquidity risk associated with such investments.
As of December 31, 2021, the Fund had securities on loan.
The value of the related collateral exceeded the value of the securities loaned at period end.
Remaining Contractual Maturity of the Agreements as of December 31, 2021
| Overnight
and Continuous |
<30 days | Between
30 & 90 days |
>90 days | Total | |
| Securities Lending Transactions | |||||
| Common Stocks | $ 40,582,496 | $ — | $ 45,510 | $ 1,818,548 | $ 42,446,554 |
| Rights | 44 | — | — | — | 44 |
| Total Borrowings | $ 40,582,540 | $ — | $ 45,510 | $ 1,818,548 | $ 42,446,598 |
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions: | $ 42,446,598 | ||||
Federal Income Taxes. The Fund’s policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of
its taxable income to its shareholders.
The
Fund has reviewed the tax positions for the open tax years as of December 31, 2021 and has determined that no provision for income tax and/or uncertain tax positions is required in the Fund's financial statements. The Fund's federal tax returns for
the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income and Gains. Distributions from net investment income of the Fund, if any, are declared and distributed to shareholders annually. Net realized gains from investment transactions, in excess of
available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually. The Fund may also make additional distributions for tax purposes if necessary.
The timing and characterization of certain income and
capital gain distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the
| DWS Small Cap Index VIP | | 37 |
United States of America. These differences primarily relate to income
received from passive foreign investment companies, investments in futures contracts, certain securities sold at a loss, and the realized tax character on distributions from certain securities. As a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without
impacting the net asset value of the Fund.
At December
31, 2021, the Fund's components of distributable earnings (accumulated losses) on a net tax basis were as follows:
| Undistributed ordinary income* | $ 9,340,236 |
| Undistributed long-term capital gains | $ 58,223,175 |
| Net unrealized appreciation (depreciation) on investments | $ 105,932,350 |
At December 31, 2021, the
aggregate cost of investments for federal income tax purposes was $402,657,629. The net unrealized appreciation for all investments based on tax cost was $105,932,350. This consisted of aggregate gross unrealized appreciation for all investments for
which there was an excess of value over tax cost of $157,496,708 and aggregate gross unrealized depreciation for all investments for which there was an excess of tax cost over value of $51,564,358.
In addition, the tax character of distributions paid to
shareholders by the Fund is summarized as follows:
| Years Ended December 31, | ||
| 2021 | 2020 | |
| Distributions from ordinary income* | $ 6,391,312 | $ 5,574,246 |
| Distributions from long-term capital gains | $ 24,078,720 | $ 34,707,721 |
| * | For tax purposes, short-term capital gain distributions are considered ordinary income distributions. |
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these
arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Expenses. Expenses of the Trust arising in connection with a specific fund are allocated to that fund. Other Trust expenses which cannot be directly attributed to a fund are apportioned among
the funds in the Trust based upon the relative net assets or other appropriate measures.
Real Estate Investment Trusts. The Fund at its fiscal year end recharacterizes distributions received from a Real Estate Investment Trust (“REIT”) investment based on information provided by the REIT
into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available timely from a REIT, the recharacterization will be estimated for financial reporting purposes and a
recharacterization will be made to the accounting records in the following year when such information becomes available. Distributions received from REITs in excess of income are recorded as either a reduction of cost of investments or realized
gains.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions
are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified
cost basis. Proceeds from litigation payments, if any, are included in net realized gain (loss) from investments.
| B. | Derivative Instruments |
A futures contract is an agreement
between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement
date). For the year ended December 31, 2021, the Fund invested in futures to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the stock market.
Upon entering into a futures contract, the Fund is required
to deposit with a financial intermediary cash or securities (“initial margin”) in an amount equal to a certain percentage of the face value indicated in the
| 38 | | DWS Small Cap Index VIP |
futures contract. Subsequent payments (“variation margin”) are
made or received by the Fund dependent upon the daily fluctuations in the value and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. Gains or losses are realized when the contract expires or is closed. Since
all futures contracts are exchange-traded, counterparty risk is minimized as the exchange’s clearinghouse acts as the counterparty, and guarantees the futures against default.
Certain risks may arise upon entering into futures
contracts, including the risk that an illiquid market will limit the Fund's ability to close out a futures contract prior to the settlement date and the risk that the futures contract is not well correlated with the security, index or currency to
which it relates. Risk of loss may exceed amounts recognized in the Statement of Assets and Liabilities.
A summary of the open futures contracts as of December 31,
2021, is included in a table following the Fund’s Investment Portfolio. For the year ended December 31, 2021, the investment in futures contracts purchased had a total notional value generally indicative of a range from approximately
$3,752,000 to $14,855,000.
The following tables
summarize the value of the Fund's derivative instruments held as of December 31, 2021 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:
| Assets Derivative | Futures
Contracts |
| Equity Contracts (a) | $ 153,915 |
| The above derivative is located in the following Statement of Assets and Liabilities account: | |
| (a) | Includes cumulative appreciation of futures contracts as disclosed in the Investment Portfolio. Unsettled variation margin is disclosed separately within the Statement of Assets and Liabilities. |
Additionally, the amount of unrealized and realized gains
and losses on derivative instruments recognized in Fund earnings during the year ended December 31, 2021 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk
exposure:
| Realized Gain (Loss) | Futures
Contracts |
| Equity Contracts (a) | $ (59,141) |
| The above derivative is located in the following Statement of Operations account: | |
| (a) | Net realized gain (loss) from futures |
| Change in Net Unrealized Appreciation (Depreciation) | Futures
Contracts |
| Equity Contracts (a) | $ 88,310 |
| The above derivative is located in the following Statement of Operations account: | |
| (a) | Change in net unrealized appreciation (depreciation) on futures |
| C. | Purchases and Sales of Securities |
During the year ended
December 31, 2021, purchases and sales of investment securities (excluding short-term investments) aggregated $118,358,979 and $139,367,306, respectively.
| D. | Related Parties |
Management Agreement. Under the Investment Management Agreement with DWS Investment Management Americas, Inc. (“DIMA” or the “Advisor”), an indirect, wholly owned subsidiary of DWS
Group GmbH & Co. KGaA (“DWS Group”), the Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund or delegates such responsibility to the
Fund’s subadvisor. Northern Trust Investments, Inc. (“NTI”) serves as subadvisor. As a subadvisor to the Fund, NTI makes investment decisions and buys and sells securities for the Fund. NTI is paid by the Advisor for the services
NTI provides to the Fund.
Prior to Octorber 1,
2021, under the Investment Management Agreement with the Advisor, the Fund paid the Advisor an annual fee based on the average daily net assets of the Fund, computed and accrued daily and payable monthly at the annual rate (exclusive of any
applicable waivers/reimbursements) of 0.35%.
| DWS Small Cap Index VIP | | 39 |
Effective October 1, 2021, under the Investment Management
Agreement with the Advisor, the Fund pays a monthly management fee based on the average daily net assets of the Fund, computed and accrued daily and payable monthly at the annual rate (exclusive of any applicable waivers/reimbursements) of
0.28%.
For the period from January 1, 2021 through
September 30, 2022 (through April 30, 2022 for Class B shares), 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 total annual operating expenses
(excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of each class as follows:
| Class A | .39% |
| Class B | .67% |
For the year ended December 31,
2021, fees waived and/or expenses reimbursed for each class are as follows:
| Class A | $ 329,940 |
| Class B | 38,093 |
| $ 368,033 |
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the
Fund pays the Advisor an annual fee (“Administration Fee”) of 0.097% of the Fund’s average daily net assets, computed and accrued daily and payable monthly. For the year ended December 31, 2021, the Administration Fee was $450,572,
of which $37,904 is unpaid.
Distribution
Service Agreement. DWS Distributors, Inc. (“DDI”), an affiliate of the Advisor, is the Fund’s distributor. In accordance with the Distribution Plan, DDI
receives 12b-1 fees of up to 0.25% of the average daily net assets of Class B shares. For the year ended December 31, 2021, the Distribution Service Fee was as follows:
| Distribution Service Fee | Total
Aggregated |
Unpaid
at December 31, 2021 |
| Class B | $ 105,471 | $ 9,058 |
Service Provider Fees. DWS Service Company (“DSC”), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a
sub-transfer agency agreement between DSC and DST Systems, Inc. (“DST”), DSC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DSC compensates DST out of the shareholder servicing
fee it receives from the Fund. For the year ended December 31, 2021, the amounts charged to the Fund by DSC were as follows:
| Services to Shareholders | Total
Aggregated |
Unpaid
at December 31, 2021 |
| Class A | $ 1,445 | $ 246 |
| Class B | 283 | 48 |
| $ 1,728 | $ 294 |
Other Service Fees. Under an agreement with the Fund, DIMA is compensated for providing regulatory filing services to the Fund. For the year ended December 31, 2021, the amount charged to the Fund by
DIMA included in the Statement of Operations under “Reports to shareholders” aggregated $5,840, of which $367 is unpaid.
Trustees’ Fees and Expenses. The Fund paid retainer fees to each Trustee not affiliated with the Advisor, plus specified amounts to the Board Chairperson and to each committee Chairperson.
Affiliated Cash Management Vehicles. The Fund may invest uninvested cash balances in DWS Central Cash Management Government Fund and DWS ESG Liquidity Fund, affiliated money market funds which are managed by the
Advisor. Each affiliated money market fund is managed in accordance with Rule 2a-7 under the 1940 Act, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. DWS Central Cash Management
Government Fund seeks to maintain a stable net asset value, and DWS ESG Liquidity Fund maintains a floating net asset value. The Fund indirectly bears its
| 40 | | DWS Small Cap Index VIP |
proportionate share of the expenses of each affiliated money market fund in
which it invests. DWS Central Cash Management Government Fund does not pay the Advisor an investment management fee. To the extent that DWS ESG Liquidity Fund pays an investment management fee to the Advisor, the Advisor will waive an amount of the
investment management fee payable to the Advisor by the Fund equal to the amount of the investment management fee payable on the Fund’s assets invested in DWS ESG Liquidity Fund.
| E. | Ownership of the Fund |
At December 31, 2021, four
participating insurance companies were owners of record of 10% or more of the total outstanding Class A shares of the Fund, each owning 36%, 15%, 12% and 10%, respectively. Four participating insurance companies were owners of record of 10% or more
of the total outstanding Class B shares of the Fund, each owning 36%, 20%, 19% and 13%, respectively.
| F. | Line of Credit |
The Fund and other affiliated funds
(the “Participants”) share in a $350 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require
the untimely disposition of securities. The Participants are charged an annual commitment fee, which is allocated based on net assets, among each of the Participants. Interest is calculated at a daily fluctuating rate per annum equal to the sum of
0.10% plus the higher of the Federal Funds Effective Rate and the Overnight Bank Funding Rate, plus 1.25%. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at December 31,
2021.
| G. | Other — COVID-19 Pandemic |
A novel coronavirus known as COVID-19, declared a pandemic by
the World Health Organization, has caused significant uncertainty, market volatility, decreased economic and other activity, increased government activity, including economic stimulus measures, and supply chain interruptions. The full effects,
duration and costs of the COVID-19 pandemic are impossible to predict, and the circumstances surrounding the COVID-19 pandemic will continue to evolve, including the risk of future increased rates of infection due to low vaccination rates and/or the
lack of effectiveness of current vaccines against new variants. The pandemic has affected and may continue to affect certain countries, industries, economic sectors, companies and investment products more than others, may exacerbate existing
economic, political, or social tensions and may increase the probability of an economic recession or depression. The Fund and its investments may be adversely affected by the effects of the COVID-19 pandemic, and the pandemic may result in the Fund
and its service providers experiencing operational difficulties in coordinating a remote workforce and implementing their business continuity plans, among others. Management will continue to monitor the impact COVID-19 has on the Fund and reflect
the consequences as appropriate in the Fund's accounting and financial reporting.
| DWS Small Cap Index VIP | | 41 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Deutsche DWS Investments VIT Funds
and Shareholders of DWS Small Cap Index VIP:
Opinion on
the Financial Statements
We have audited the
accompanying statement of assets and liabilities of DWS Small Cap Index VIP (the “Fund”) (one of the funds constituting Deutsche DWS Investments VIT Funds) (the “Trust”), including the investment portfolio, as of December 31,
2021, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the three years in the period then ended and the
related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting Deutsche DWS
Investments VIT Funds) at December 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the three years in the
period then ended, in conformity with U.S. generally accepted accounting principles.
The financial highlights for the years ended December 31, 2017
and December 31, 2018, were audited by another independent registered public accounting firm whose report, dated February 14, 2019, expressed an unqualified opinion on those financial highlights.
Basis for Opinion
These financial statements are the responsibility of the
Trust’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
("PCAOB") and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of
the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were
we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an
opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned as of December 31, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our
opinion.
We have served as
the auditor of one or more investment companies in the DWS family of funds since at least 1979, but we are unable to determine the specific year.
Boston, Massachusetts
February 15, 2022
| 42 | | DWS Small Cap Index VIP |
| Information About Your Fund’s Expenses | (Unaudited) |
As an investor of the Fund, you
incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include contract charges, which are not shown in
this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most
recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the
entire period (July 1, 2021 to December 31, 2021).
The
tables illustrate your Fund’s expenses in two ways:
| — | Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund’s actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Expenses Paid per $1,000” line under the share class you hold. |
| — | Hypothetical 5% Fund Return. This helps you to compare your Fund’s ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund’s actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. |
Please note that the expenses shown in these tables are
meant to highlight your ongoing expenses only and do not reflect any transaction costs. The “Expenses Paid per $1,000” line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total
expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
Expenses and Value of a $1,000 Investment for the six months ended December 31, 2021
| Actual Fund Return | Class A | Class B |
| Beginning Account Value 7/1/21 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 12/31/21 | $ 974.90 | $ 973.90 |
| Expenses Paid per $1,000* | $ 1.94 | $ 3.33 |
| Hypothetical 5% Fund Return | Class A | Class B |
| Beginning Account Value 7/1/21 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 12/31/21 | $ 1,023.24 | $ 1,021.83 |
| Expenses Paid per $1,000* | $ 1.99 | $ 3.41 |
| * | Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by 184 (the number of days in the most recent six-month period), then divided by 365. |
| Annualized Expense Ratios | Class A | Class B |
| DWS Small Cap Index VIP | .39% | .67% |
For more information, please
refer to the Fund’s prospectus.
These tables do
not reflect charges and fees (“contract charges”) associated with the separate account that invests in the Fund or any variable life insurance policy or variable annuity contract for which the Fund is an investment option.
For an analysis of the fees associated with an investment in
the Fund or similar funds, please refer to the current and hypothetical expense calculators for Variable Insurance Products which can be found at dws.com/calculators.
| DWS Small Cap Index VIP | | 43 |
| Tax Information | (Unaudited) |
The Fund paid distributions of
$1.03 per share from net long-term capital gains during its year ended December 31, 2021.
Pursuant to Section 852 of the Internal Revenue Code, the
Fund designates $64,099,000 as capital gain dividends for its year ended December 31, 2021.
For corporate shareholders, 47% of the ordinary dividends
(i.e., income dividends plus short-term capital gains) paid during the Fund’s fiscal year ended December 31, 2021, qualified for the dividends received deduction.
Please consult a tax advisor if you have questions about
federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please contact your insurance provider.
Proxy Voting
The Fund's policies and procedures for voting proxies for
portfolio securities and information about how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 are available on our Web site — dws.com/en-us/resources/proxy-voting — or on
the SEC’s Web site — sec.gov. To obtain a written copy of the Fund's policies and procedures without charge, upon request, call us toll free at (800) 728-3337.
| 44 | | DWS Small Cap Index VIP |
Advisory Agreement Board Considerations and Fee
Evaluation
The Board of Trustees (hereinafter referred
to as the “Board” or “Trustees”) approved the renewal of DWS Small Cap Index VIP's (the “Fund”) investment management agreement (the “Agreement”) with DWS Investment Management Americas, Inc.
(“DIMA”) and sub-advisory agreement (the “Sub-Advisory Agreement” and together with the Agreement, the “Agreements”) between DIMA and Northern Trust Investments, Inc. (“NTI”) in September 2021.
In terms of the process that the Board followed prior to
approving the Agreements, shareholders should know that:
| — | During the entire process, all of the Fund's Trustees were independent of DIMA and its affiliates (the “Independent Trustees”). |
| — | The Board met frequently during the past year to discuss fund matters and dedicated a substantial amount of time to contract review matters. Over the course of several months, the Board reviewed extensive materials received from DIMA, independent third parties and independent counsel. These materials included an analysis of the Fund’s performance, fees and expenses, and profitability from a fee consultant retained by the Fund’s Independent Trustees (the “Fee Consultant”). |
| — | The Board also received extensive information throughout the year regarding performance of the Fund. |
| — | The Independent Trustees regularly met privately with counsel to discuss contract review and other matters. In addition, the Independent Trustees were advised by the Fee Consultant in the course of their review of the Fund's contractual arrangements and considered a comprehensive report prepared by the Fee Consultant in connection with their deliberations. |
| — | In connection with reviewing the Agreements, the Board also reviewed the terms of the Fund's Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements. |
In connection with the contract review process, the
Board considered the factors discussed below, among others. The Board also considered that DIMA and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious
advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DIMA managed the Fund. DIMA is part of DWS Group GmbH & Co. KGaA (“DWS
Group”). DWS Group is a global asset management business that offers a wide range of investing expertise and resources, including research capabilities in many countries throughout the world. In 2018, approximately 20% of DWS Group’s
shares were sold in an initial public offering, with Deutsche Bank AG owning the remaining shares.
As part of the contract review process, the Board carefully
considered the fees and expenses of each DWS fund overseen by the Board in light of the fund’s performance. In many cases, this led to the negotiation and implementation of expense caps.
While shareholders may focus primarily on fund performance
and fees, the Fund’s Board considers these and many other factors, including the quality and integrity of DIMA’s and NTI’s personnel and administrative support services provided by DIMA, such as back-office operations, fund
valuations, and compliance policies and procedures.
Nature, Quality and Extent of Services. The Board considered the terms of the Agreements, including the scope of advisory services provided under the Agreements. The Board noted that, under the Agreements, DIMA and NTI
provide portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DIMA provides administrative services to the Fund. The Board considered the experience and skills of senior management and
investment personnel and the resources made available to such personnel. The Board also considered the risks to DIMA in sponsoring or managing the Fund, including financial, operational and reputational risks, the potential economic impact to DIMA
from such risks and DIMA’s approach to addressing such risks. Throughout the course of the year, the Board also received information regarding DIMA’s oversight of fund sub-advisors, including NTI. The Board reviewed the Fund’s
performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market index(es) and a peer universe compiled using information supplied by Morningstar Direct
(“Morningstar”), an independent fund data service. The Board also noted that it has put into place a process of identifying “Funds in Review” (e.g., funds performing poorly relative to a peer universe), and receives
additional reporting from DIMA regarding such funds and, where appropriate, DIMA’s plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the
information provided, the Board noted that,
| DWS Small Cap Index VIP | | 45 |
for the one-, three- and five-year periods ended December 31, 2020, the
Fund’s performance (Class A shares) was in the 2nd quartile, 2nd quartile and 1st quartile, respectively, of the applicable Morningstar universe (the 1st quartile being the best performers and the 4th quartile being the worst
performers).
Fees and Expenses. The Board considered the Fund’s investment management fee schedule, sub-advisory fee schedule, operating expenses and total expense ratios, and comparative information provided
by Broadridge Financial Solutions, Inc. (“Broadridge”) and the Fee Consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the
least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include a 0.097% fee paid to DIMA under the Fund’s administrative
services agreement, were higher than the median (4th quartile) of the applicable Broadridge peer group (based on Broadridge data provided as of December 31, 2020). The Board noted that, effective October 1, 2021, in connection with the 2021 contract
renewal process, DIMA agreed to reduce the Fund’s contractual management fee by 0.07%. With respect to the sub-advisory fee paid to NTI, the Board noted that the fee is paid by DIMA out of its fee and not directly by the Fund. The Board noted
that the Fund’s Class A shares total (net) operating expenses were expected to be higher than the median (3rd quartile) of the applicable Broadridge expense universe (based on Broadridge data provided as of December 31, 2020, and analyzing
Broadridge expense universe Class A (net) expenses less any applicable 12b-1 fees) (“Broadridge Universe Expenses”). The Board also reviewed data comparing each other operational share class’s total (net) operating expenses to the
applicable Broadridge Universe Expenses. The Board noted that the expense limitations agreed to by DIMA were expected to help the Fund’s total (net) operating expenses remain competitive. The Board considered the Fund’s management fee
rate as compared to fees charged by DIMA to comparable DWS U.S. registered funds (“DWS Funds”) and considered differences between the Fund and the comparable DWS Funds. The information requested by the Board as part of its review of fees
and expenses also included information about institutional accounts (including any sub-advised funds and accounts) and funds offered primarily to European investors (“DWS Europe Funds”) managed by DWS Group. The Board noted that DIMA
indicated that DWS Group does not manage any institutional accounts or DWS Europe Funds comparable to the Fund.
On the basis of the information provided, the Board
concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DIMA and NTI.
Profitability. The Board reviewed detailed information regarding revenues received by DIMA under the Agreement. The Board considered the estimated costs to DIMA, and pre-tax profits realized by
DIMA, from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DIMA and its affiliates with
respect to all fund services in totality and by fund. The Board and the Fee Consultant reviewed DIMA’s methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax
profits realized by DIMA in connection with the management of the Fund were not unreasonable. The Board also reviewed certain publicly available information regarding the profitability of certain similar investment management firms. The Board noted
that, while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DIMA and its affiliates’ overall profitability with respect to the DWS Funds (after taking into
account distribution and other services provided to the funds by DIMA and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available. The Board did not consider the profitability of NTI
with respect to the Fund. The Board noted that DIMA pays NTI’s fee out of its management fee, and its understanding that the Fund’s sub-advisory fee schedule was the product of an arm’s length negotiation with DIMA.
Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. In this regard, the
Board observed that while the Fund’s current investment management fee schedule does not include breakpoints, the Fund’s fee schedule represents an appropriate sharing between the Fund and DIMA of such economies of scale as may exist in
the management of the Fund at current asset levels.
Other Benefits to DIMA and NTI and Their Affiliates. The Board also considered the character and amount of other incidental or “fall-out” benefits received by DIMA and NTI and their affiliates, including any fees received
by DIMA for administrative services provided to the Fund, any fees received by an affiliate of DIMA for transfer agency services provided to the Fund and any fees received by an affiliate of DIMA for distribution services. The Board also considered
benefits to DIMA related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities. In
addition, the Board
| 46 | | DWS Small Cap Index VIP |
considered the incidental public relations benefits to DIMA related to DWS
Funds advertising and cross-selling opportunities among DIMA products and services. The Board considered these benefits in reaching its conclusion that the Fund’s management fees were reasonable.
Compliance. The Board considered the significant attention and resources dedicated by DIMA to its compliance processes in recent years. The Board noted in particular (i) the experience,
seniority and time commitment of the individuals serving as DIMA’s and the Fund’s chief compliance officers and (ii) the substantial commitment of resources by DIMA and its affiliates to compliance matters, including the retention of
compliance personnel. The Board also considered the attention and resources dedicated by DIMA to the oversight of the investment sub-advisor’s compliance program and compliance with the applicable fund policies and procedures.
Based on all of the information considered and the
conclusions reached, the Board determined that the continuation of the Agreements is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board
considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and counsel present. It is possible that individual Independent Trustees may have weighed these factors
differently in reaching their individual decisions to approve the continuation of the Agreements.
| DWS Small Cap Index VIP | | 47 |
Board Members and Officers
The following table presents certain information regarding the
Board Members and Officers 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 Independent Board Member is c/o Keith R. Fox, DWS Funds Board Chair, c/o Thomas R. Hiller, Ropes & Gray LLP, Prudential
Tower, 800 Boylston Street, Boston, MA 02199-3600. Except as otherwise noted below, 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.
The Board Members may also serve in similar capacities with
other funds in the fund complex. The number of funds in the DWS fund complex shown in the table below includes all registered open- and closed-end funds (including all of their portfolios) advised by the Advisor and any registered funds that have an
investment advisor that is an affiliated person of the Advisor.
Independent Board Members/Independent Advisory Board
Members
| Name,
Year of Birth, Position with the Trust/ Corporation and Length of Time Served1 |
Business
Experience and Directorships During the Past Five Years |
Number
of Funds in DWS Fund Complex Overseen |
Other
Directorships Held by Board Member |
| Keith R. Fox, CFA (1954)Chairperson since 2017, and Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds) (since 1986). Directorships: Progressive International Corporation (kitchen goods importer and distributor); former Chairman, National Association of Small Business Investment Companies; Former Directorships: ICI Mutual Insurance Company; BoxTop Media Inc. (advertising); Sun Capital Advisers Trust (mutual funds) | 70 | — |
| John W. Ballantine (1946)Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996–1998); Executive Vice President and Head of International Banking (1995–1996); Not-for-Profit Directorships: Palm Beach Civic Assn.; Window to the World Communications (public media); Life Director of Harris Theater for Music and Dance (Chicago); Life Director of Hubbard Street Dance Chicago; Former Directorships: Director and Chairman of the Board, Healthways, Inc.2 (population wellbeing and wellness services) (2003–2014); Stockwell Capital Investments PLC (private equity); Enron Corporation; FNB Corporation; Tokheim Corporation; First Oak Brook Bancshares, Inc.; Oak Brook Bank; Portland General Electric2 (utility company (2003–2021); and Prisma Energy International; Former Not-for-Profit Directorships: Public Radio International | 70 | — |
| Dawn-Marie Driscoll (1946)Board Member since 1987 | Advisory Board and former Executive Fellow, Hoffman Center for Business Ethics, Bentley University; formerly: Partner, Palmer & Dodge (law firm) (1988–1990); Vice President of Corporate Affairs and General Counsel, Filene’s (retail) (1978–1988); Directorships: Trustee and former Chairman of the Board, Southwest Florida Community Foundation (charitable organization); Former Directorships: ICI Mutual Insurance Company (2007–2015); Sun Capital Advisers Trust (mutual funds) (2007–2012), Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | 70 | — |
| Richard J. Herring (1946)Board Member since 1990 | Jacob Safra Professor of International Banking and Professor of Finance, The Wharton School, University of Pennsylvania (since July 1972); Director, The Wharton Financial Institutions Center (1994–2020); formerly: Vice Dean and Director, Wharton Undergraduate Division (1995–2000) and Director, The Lauder Institute of International Management Studies (2000–2006); Member FDIC Systemic Risk Advisory Committee since 2011, member Systemic Risk Council since 2012 and member of the Advisory Board at the Yale Program on Financial Stability since 2013; Former Directorships: Co-Chair of the Shadow Financial Regulatory Committee (2003–2015), Executive Director of The Financial Economists Roundtable (2008–2015), Director of The Thai Capital Fund (2007–2013), Director of The Aberdeen Singapore Fund (2007–2018), and Nonexecutive Director of Barclays Bank DE (2010–2018) | 70 | Director, Aberdeen Japan Fund (since 2007) |
| William McClayton (1944)Board Member since 2004 | Private equity investor (since October 2009); formerly: Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001–2009); Senior Partner, Arthur Andersen LLP (accounting) (1966–2001); Former Directorships: Board of Managers, YMCA of Metropolitan Chicago; Trustee, Ravinia Festival | 70 | — |
| 48 | | DWS Small Cap Index VIP |
| Name,
Year of Birth, Position with the Trust/ Corporation and Length of Time Served1 |
Business
Experience and Directorships During the Past Five Years |
Number
of Funds in DWS Fund Complex Overseen |
Other
Directorships Held by Board Member |
| Chad D. Perry (1972)Board Member or Advisory Board Member since 20213 | Executive Vice President, General Counsel and Secretary, Tanger Factory Outlet Centers, Inc.2 (since 2011); formerly Executive Vice President and Deputy General Counsel, LPL Financial Holdings Inc.2 (2006–2011); Senior Corporate Counsel, EMC Corporation (2005–2006); Associate, Ropes & Gray LLP (1997–2005) | 21 4 | — |
| Rebecca W. Rimel (1951)Board Member since 1995 | Senior Advisor, The Pew Charitable Trusts (charitable organization) (since July 2020); Director, The Bridgespan Group (nonprofit organization) (since October 2020); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983–2004); Board Member, Investor Education (charitable organization) (2004–2005); Former Directorships: Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001–2007); Director, Viasys Health Care2 (January 2007–June 2007); Trustee, Thomas Jefferson Foundation (charitable organization) (1994–2012); President, Chief Executive Officer and Director, The Pew Charitable Trusts (charitable organization) (1994–2020); Director, BioTelemetry Inc.2 (acquired by Royal Philips in 2021) (healthcare) (2009–2021) | 70 | Director,
Becton Dickinson and Company2 (medical technology company) (2012–present) |
| Catherine Schrand (1964)Board Member or Advisory Board Member since 20213 | Celia Z. Moh Professor of Accounting (since 2016) and Professor of Accounting (since 1994), The Wharton School, University of Pennsylvania; formerly Vice Dean, Wharton Doctoral Programs (2016–2019) | 21 4 | — |
| William N. Searcy, Jr. (1946)Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989–September 2003); Former Directorships: Trustee, Sun Capital Advisers Trust (mutual funds) (1998–2012) | 70 | — |
Officers5
| Name,
Year of Birth, Position with the Trust/Corporation and Length of Time Served6 |
Business
Experience and Directorships During the Past Five Years |
| Hepsen Uzcan7 (1974)President and Chief Executive Officer, 2017–present | Fund Administration (Head since 2017), DWS; Secretary, DWS USA Corporation (2018–present); Assistant Secretary, DWS Distributors, Inc. (2018–present); Director and Vice President, DWS Service Company (2018–present); Assistant Secretary, DWS Investment Management Americas, Inc. (2018–present); Director and President, DB Investment Managers, Inc. (2018–present); President and Chief Executive Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2017–present); formerly: Vice President for the Deutsche funds (2016–2017); Assistant Secretary for the DWS funds (2013–2019); Assistant Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2013–2020); Directorships: Interested Director, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since June 25, 2020); ICI Mutual Insurance Company (since October 16, 2020); and Episcopalian Charities of New York (2018–present) |
| John Millette8 (1962)Vice President and Secretary, 1999–present | Legal (Associate General Counsel), DWS; Chief Legal Officer, DWS Investment Management Americas, Inc. (2015–present); Director and Vice President, DWS Trust Company (2016–present); Secretary, DBX ETF Trust (2020–present); Vice President, DBX Advisors LLC (2021–present); Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. 2011–present); formerly: Secretary, Deutsche Investment Management Americas Inc. (2015–2017); and Assistant Secretary, DBX ETF Trust (2019–2020) |
| Ciara Crawford9 (1984)Assistant Secretary, (2019–present) | Fund Administration (Specialist), DWS (2015–present); formerly, Legal Assistant at Accelerated Tax Solutions. |
| Diane Kenneally8 (1966)Chief Financial Officer and Treasurer, 2018–present | Fund Administration Treasurer's Office (Co-Head since 2018), DWS; Treasurer, Chief Financial Officer and Controller, DBX ETF Trust (2019–present); Treasurer and Chief Financial Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018–present); formerly: Assistant Treasurer for the DWS funds (2007–2018) |
| Paul Antosca8 (1957)Assistant Treasurer, 2007–present | Fund Administration Tax (Head), DWS; and Assistant Treasurer, DBX ETF Trust (2019–present) |
| Sheila Cadogan8 (1966)Assistant Treasurer, 2017–present | Fund Administration Treasurer's Office (Co-Head since 2018), DWS; Director and Vice President, DWS Trust Company (2018–present); Assistant Treasurer, DBX ETF Trust (2019–present); Assistant Treasurer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018–present) |
| Scott D. Hogan8 (1970)Chief Compliance Officer, 2016–present | Anti-Financial Crime & Compliance US (Senior Team Lead), DWS; Chief Compliance Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2016–present) |
| DWS Small Cap Index VIP | | 49 |
| Name,
Year of Birth, Position with the Trust/Corporation and Length of Time Served6 |
Business
Experience and Directorships During the Past Five Years |
| Caroline Pearson8 (1962)Chief Legal Officer, 2010–present | Legal (Senior Team Lead), DWS; Assistant Secretary, DBX ETF Trust (2020–present); Chief Legal Officer, DBX Advisors LLC (2020–present); Chief Legal Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2012–present); formerly: Secretary, Deutsche AM Distributors, Inc. (2002–2017); Secretary, Deutsche AM Service Company (2010–2017); and Chief Legal Officer, DBX Strategic Advisors LLC (2020–2021) |
| Christian
Rijs7 (1980)Anti-Money Laundering Compliance Officer, since October 6, 2021 |
DWS Americas Head of Anti-Financial Crime and AML Officer, DWS; AML Officer, DWS Trust Company (since October 6, 2021); AML Officer, DBX ETF Trust (since October 6, 2021); AML Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since October 6, 2021); formerly: DWS UK & Ireland Head of Anti-Financial Crime and MLRO |
| 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 | Mr. Perry and Ms. Schrand are Advisory Board Members of Deutsche DWS Asset Allocation Trust, Deutsche DWS Equity 500 Index Portfolio, Deutsche DWS Global/International Fund, Inc., Deutsche DWS Income Trust, Deutsche DWS Institutional Funds, Deutsche DWS International Fund, Inc., Deutsche DWS Investment Trust, Deutsche DWS Investments VIT Funds, Deutsche DWS Money Market Trust, Deutsche DWS Municipal Trust, Deutsche DWS Portfolio Trust, Deutsche DWS Securities Trust, Deutsche DWS Tax Free Trust, Deutsche DWS Variable Series I and Government Cash Management Portfolio. Mr. Perry and Ms. Schrand are Board Members of each other Trust. |
| 4 | Mr. Perry and Ms. Schrand oversee 21 funds in the DWS Fund Complex as Board Members of various Trusts. Mr. Perry and Ms. Schrand are Advisory Board Members of various Trusts/Corporations comprised of 49 funds in the DWS Fund Complex. |
| 5 | As a result of their respective positions held with the Advisor or its affiliates, 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: 875 Third Avenue, New York, NY 10022. |
| 8 | Address: 100 Summer Street, Boston, MA 02110. |
| 9 | Address: 5201 Gate Parkway, Jacksonville, FL 32256. |
Certain officers hold similar positions for other investment
companies for which DIMA or an affiliate serves as the Advisor.
The Fund’s Statement of Additional Information
(“SAI”) includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800)
728-3337.
| 50 | | DWS Small Cap Index VIP |
| (b) Not applicable | |
| ITEM 2. | CODE OF ETHICS |
|
As of the end of the period covered by this report, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR that applies to its Principal Executive Officer and Principal Financial Officer.
There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2.
A copy of the code of ethics is filed as an exhibit to this Form N-CSR. | |
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT |
| The fund’s audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The fund’s Board of Trustees has determined that there are several "audit committee financial experts" (as such term has been defined by the Regulations) serving on the fund’s audit committee including Mr. William McClayton, the chair of the fund’s audit committee. An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933 and the designation or identification of a person as an “audit committee financial expert” does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. | |
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
DWS Small Cap INdex VIP
form n-csr disclosure re: AUDIT FEES
The following table shows the amount of fees that Ernst & Young LLP (“EY”), the Fund’s Independent Registered Public Accounting Firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that EY provided to the Fund.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund
| Fiscal Year Ended December 31, |
Audit Fees Billed to Fund | Audit-Related Fees Billed to Fund |
Tax Fees Billed to Fund | All Other Fees Billed to Fund |
| 2021 | $38,433 | $0 | $8,316 | $0 |
| 2020 | $38,433 | $0 | $8,316 | $0 |
The above “Tax Fees” were billed for professional services rendered for tax preparation.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers
The following table shows the amount of fees billed by EY to DWS Investment Management Americas, Inc. (“DIMA” or the “Adviser”), and any entity controlling, controlled by or under common control with DIMA (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.
| Fiscal Year Ended December 31, |
Audit-Related Fees Billed to Adviser and Affiliated Fund Service Providers |
Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All Other Fees Billed to Adviser and Affiliated Fund Service Providers |
| 2021 | $0 | $461,717 | $0 |
| 2020 | $0 | $650,763 | $0 |
The above “Tax Fees” were billed in connection with tax compliance services and agreed upon procedures.
Non-Audit Services
The following table shows the amount of fees that EY billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that EY provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from EY about any non-audit services that EY rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating EY’s independence.
| Fiscal Year Ended December 31, |
Total Non-Audit Fees Billed to Fund (A) |
Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B) |
Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C) |
Total of (A), (B) and (C) |
| 2021 | $8,316 | $461,717 | $0 | $470,033 |
| 2020 | $8,316 | $650,763 | $0 | $659,079 |
All other engagement fees were billed for services in connection with agreed upon procedures and tax compliance for DIMA and other related entities.
Audit Committee Pre-Approval Policies and Procedures. Generally, each Fund’s Audit Committee must pre approve (i) all services to be performed for a Fund by a Fund’s Independent Registered Public Accounting Firm and (ii) all non-audit services to be performed by a Fund’s Independent Registered Public Accounting Firm for the DIMA Entities with respect to operations and financial reporting of the Fund, except that the Chairperson or Vice Chairperson of each Fund’s Audit Committee may grant the pre-approval for non-audit services described in items (i) and (ii) above for non-prohibited services for engagements of less than $100,000. All such delegated pre approvals shall be presented to each Fund’s Audit Committee no later than the next Audit Committee meeting.
There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.
According to the registrant’s principal Independent Registered Public Accounting Firm, substantially all of the principal Independent Registered Public Accounting Firm's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal Independent Registered Public Accounting Firm.
***
In connection with the audit of the 2020 and 2021 financial statements, the Fund entered into an engagement letter with EY. The terms of the engagement letter required by EY, and agreed to by the Audit Committee, include a provision mandating the use of mediation and arbitration to resolve any controversy or claim between the parties arising out of or relating to the engagement letter or services provided thereunder.
***
Pursuant to PCAOB Rule 3526, EY is required to describe in writing to the Fund’s Audit Committee, on at least an annual basis, all relationships between EY, or any of its affiliates, and the DWS Funds, including the Fund, or persons in financial reporting oversight roles at the DWS Funds that, as of the date of the communication, may reasonably be thought to bear on EY’s independence. Pursuant to PCAOB Rule 3526, EY has reported the matters set forth below that may reasonably be thought to bear on EY’s independence. With respect to each reported matter in the aggregate, EY advised the Audit Committee that, after careful consideration of the facts and circumstances and the applicable independence rules, it concluded that the matters do not and will not impair EY’s ability to exercise objective and impartial judgement in connection with the audits of the financial statements for the Fund and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY has been and is capable of exercising objective and impartial judgment on all issues encompassed within EY’s audit engagements. EY also confirmed to the Audit Committee that it can continue to act as the Independent Registered Public Accounting Firm for the Fund.
| · | EY advised the Fund’s Audit Committee that various covered persons within EY and EY’s affiliates held investments in, or had other financial relationships with, entities within the DWS Funds “investment company complex” (as defined in Regulation S-X) (the “DWS Funds Complex”). EY informed the Audit Committee that these investments and financial relationships were inconsistent with Rule 2-01(c)(1) of Regulation S-X. EY reported that all breaches have been resolved and that none of the breaches involved any professionals who were part of the audit engagement team for the Fund or in the position to influence the audit engagement team for the Fund. |
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS | |
| Not applicable | ||
| ITEM 6. | SCHEDULE OF INVESTMENTS | |
| Not applicable | ||
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES | |
| Not applicable | ||
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES | |
| Not applicable | ||
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS | |
| Not applicable | ||
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | |
| There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board. The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Keith R. Fox, DWS Funds Board Chair, c/o Thomas R. Hiller, Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston, MA 02199-3600. | ||
| ITEM 11. | CONTROLS AND PROCEDURES | |
| (a) | The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. | |
| (b) | There have been no changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. | |
| ITEM 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies | |
| Not applicable | ||
| ITEM 13. | EXHIBITS | |
| (a)(1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. | |
| (a)(2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. | |
| (b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Registrant: | DWS Small Cap Index VIP, a series of Deutsche DWS Investments VIT Funds |
| By: |
/s/Hepsen Uzcan Hepsen Uzcan President |
| Date: | 2/15/2022 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: |
/s/Hepsen Uzcan Hepsen Uzcan President |
| Date: | 2/15/2022 |
| By: |
/s/Diane Kenneally Diane Kenneally Chief Financial Officer and Treasurer |
| Date: | 2/15/2022 |