N-CSRS 1 dncsrs.htm CASH ACCUMULATION TRUST CASH ACCUMULATION TRUST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

 

Investment Company Act file number: 811-04060

 

 

Cash Accumulation Trust

Exact name of registrant as specified in charter:

 

 

 

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Address of principal executive offices:

 

 

Jonathan D. Shain

Gateway Center 3,

100 Mulberry Street,

Newark, New Jersey 07102

Name and address of agent for service:

 

 

Registrant’s telephone number, including area code: 973-802-6469

 

 

Date of fiscal year end: 9/30/2004

 

 

Date of reporting period: 3/31/2004

Item 1 – Reports to Stockholders – [ INSERT REPORT ]

 

 

 

 

SEMIANNUAL REPORT

MARCH 31, 2004

 

 

CASH ACCUMULATION TRUST/

LIQUID ASSETS FUND

 

FUND TYPE

Money market

 

OBJECTIVE

Current income to the extent consistent with preservation of capital and liquidity

 

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change therafter.

 

 

 

 

 

 

Dear Shareholder,

May 18, 2004

 

As the U.S. stock market slowed in 2004 following its particularly strong performance in 2003, some investors still seemed to be watching developments from the sidelines. Though the economy appears sound, given the unsettled global political climate and the potential for rising interest rates in the United States, we can understand why some investors may want to remain cautious. A broadly diversified asset allocation strategy can help protect you against inflation and increase your chances of participating in economic growth. As part of such a strategy, holding a cash reserve in a money market fund can help you meet short-term obligations or deal with emergencies without having to liquidate longer-term assets at what may be an inappropriate time.

 

We recommend that you develop a diversified asset allocation strategy in consultation with a financial professional who knows you and who understands your reasons for investing, the time you have to reach your goals, and the amount of risk you are comfortable assuming. Your financial professional can help you choose the appropriate funds to implement your strategy.

 

Sincerely,

 

LOGO

 

Judy A. Rice, President

Cash Accumulation Trust/Liquid Assets Fund

 

Cash Accumulation Trust/Liquid Assets Fund   1

 

Your Fund’s Performance

 

 

Fund objective

The investment objective of the Liquid Assets Fund (the Fund) is current income to the extent consistent with preservation of capital and liquidity. There can be no assurance that the Fund will achieve its investment objective.

 

Yields will fluctuate from time to time, and past performance is not indicative of future results. Current performance may be lower or higher than the past performance quoted. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund.

 

Fund Facts as of 3/31/04                    
     7-Day
Current Yield		    Net Asset
Value (NAV)		    Weighted Avg.
Maturity (WAM)		    Net Assets
(Millions)

Liquid Assets Fund

    0.90%    $ 1.00    67 Days    $ 483.8

iMoneyNet, Inc. Prime
Retail Universe Average*

    0.37%      N/A    57 Days      N/A

 

*iMoneyNet, Inc. reports a 7-day current yield and WAM on Tuesdays. This is the data of all funds in the iMoneyNet, Inc. Prime Retail Universe Average category as of March 30, 2004, the closest date to the end of the Fund’s current reporting period.

 

Money Market Fund Yield Comparison

 

LOGO

 

2    

 

 

 

Weighted Average Maturity Comparison

 

LOGO

 

Yields will fluctuate from time to time, and past performance is not indicative of future results. Current performance may be lower or higher than the past performance quoted. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund.

 

Past performance is not indicative of future results. The graphs portray weekly 7-day current yields and weekly WAMs respectively for the Cash Accumulation Trust/Liquid Assets Fund and the iMoneyNet, Inc. Prime Retail Universe Average every Tuesday from September 30, 2003 to March 30, 2004, the closest dates to the beginning and end of the Fund’s current reporting period. The data portrayed for the Fund at the end of the reporting period in the graphs may not match the data portrayed in the Fund Facts table as of March 31, 2004.

 

 

Cash Accumulation Trust/Liquid Assets Fund   3

 

 

 

This Page Intentionally Left Blank

 

Portfolio of Investments

 

MARCH 31, 2004   SEMIANNUAL REPORT

 

Cash Accumulation Trust

Liquid Assets Fund

 

Portfolio of Investments

 

as of March 31, 2004 (Unaudited)

 

Principal
Amount (000)		      Description    Value (Note 1)
                 
  Certificates of Deposit—Canadian    0.8%       
        

Royal Bank of Canada, MTN

       
$ 4,000     

1.0725%, 4/12/04(a)

    $ 4,000,000
  Certificates of Deposit—Yankee    4.1%       
        

Credit Suisse First Boston

       
  20,000     

1.03%, 5/10/04

      19,977,683
  Commercial Paper    51.0%       
        

Amsterdam Funding Corp.

       
  5,000     

1.04%, 5/5/04

      4,995,089
        

ANZ (Delaware), Inc.

       
  2,200     

1.04%, 6/3/04

      2,195,996
        

Banque Et Caisse D’Epargne

       
  3,000     

1.09%, 7/6/04

      2,991,280
        

Barton Capital Corp.

       
  12,000     

1.03%, 5/10/04

      11,986,610
        

Ciesco LP

       
  10,000     

1.03%, 5/17/04

      9,986,839
        

CXC LLC

       
  16,100     

1.03%, 5/25/04

      16,075,125
        

Danske Corp.

       
  1,100     

1.03%, 5/10/04

      1,098,773
  3,500     

1.03%, 5/12/04

      3,495,894
  2,556     

1.11%, 7/30/04

      2,546,543
        

Den Norske Bank ASA

       
  5,000     

1.10%, 4/22/04

      4,996,792
        

Edison Asset Securitization LLC

       
  2,282     

1.03%, 5/5/04

      2,279,780
  15,000     

1.04%, 5/24/04

      14,977,033
        

HBOS Treasury Services PLC

       
  4,100     

1.03%, 5/4/04

      4,096,129
  3,450     

1.03%, 5/10/04

      3,446,151
  2,495     

1.03%, 5/17/04

      2,491,716
  3,900     

1.09%, 8/11/04

      3,884,413
        

Long Lane Master Trust IV

       
  15,000     

1.04%, 4/13/04

      14,994,800
  6,000     

1.04%, 4/22/04

      5,996,360
        

Nationwide Building Society

       
  1,250     

1.05%, 5/6/04

      1,248,724
        

Nyala Funding LLC

       
  1,500     

1.09%, 5/18/04

      1,497,865

 

See Notes to Financial Statements.

 

6    

 

 

 

Principal
Amount (000)		      Description    Value (Note 1)
                 
        

Old Line Funding Corp.

       
$ 14,500     

1.03%, 5/7/04

    $ 14,485,065
        

Park Granada LLC

       
  8,168     

1.04%, 4/30/04

      8,161,157
        

PB Finance (Delaware), Inc.

       
  13,000     

1.05%, 4/26/04

      12,990,521
  8,000     

1.05%, 5/12/04

      7,990,433
        

Royal Bank of Scotland PLC

       
  8,400     

1.03%, 5/10/04

      8,390,627
        

Santander Central Hispano Finance, Inc.

       
  18,000     

1.07%, 9/8/04

      17,914,400
        

Sheffield Receivables Corp.

       
  13,000     

1.04%, 4/30/04

      12,989,109
        

Societe Generale North America

       
  1,000     

1.03%, 5/4/04

      999,056
        

Thunder Bay Funding, Inc.

       
  10,000     

1.03%, 4/16/04

      9,995,708
        

Tulip Funding Corp.

       
  7,000     

1.07%, 5/25/04

      6,988,765
  7,000     

1.04%, 5/26/04

      6,988,878
        

UBS Finance (Delaware) LLC

       
  7,400     

1.04%, 6/7/04

      7,385,677
  4,950     

1.04%, 6/10/04

      4,939,990
        

Westpac Trust Securities Ltd.

       
  1,400     

1.09%, 4/8/04

      1,399,703
  5,500     

1.03%, 5/5/04

      5,494,650
  4,000     

1.03%, 5/20/04

      3,994,392
             
                246,390,043
             
  Other Corporate Obligations    20.4%       
        

American Express Credit Corp., MTN

       
  3,000     

1.15%, 4/5/04(a)

      3,000,000
        

Associates Corp. North America

       
  4,000     

5.80%, 4/20/04

      4,009,967
        

Bank One Corp., MTN

       
  2,250     

1.30%, 5/12/04(a)

      2,250,456
        

General Electric Capital Assurance Co.

       
  4,000     

1.17%, 4/22/04(a)(c)
(cost $4,000,000; purchased 7/17/03)

      4,000,000
        

General Electric Capital Corp.

       
  6,000     

1.18%, 4/9/04(a)

      6,000,000
  6,000     

1.17%, 4/19/04, MTN(a)

      6,000,000
  4,000     

5.375%, 4/23/04, MTN

      4,010,406

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   7

 

Portfolio of Investments

 

as of March 31, 2004 (Unaudited) Cont’d.

 

Principal
Amount (000)		      Description    Value (Note 1)
                 
        

Goldman Sachs Group, Inc., MTN

       
$ 17,000     

1.26%, 6/15/04(a)

    $ 17,000,000
        

McDonald’s Corp., MTN

       
  2,625     

5.15%, 7/1/04

      2,650,401
        

Merrill Lynch & Co., Inc., MTN

       
  10,000     

1.215%, 4/12/04(a)

      10,000,000
  2,000     

5.46%, 5/7/04

      2,008,280
  6,750     

5.35%, 6/15/04

      6,808,082
  1,000     

7.15%, 9/15/04

      1,025,648
        

Metropolitan Life Insurance Co.

       
  3,000     

1.265%, 4/1/04(a)(c)
(cost $3,000,000; purchased 10/01/03)

      3,000,000
        

Morgan Stanley, MTN

       
  9,000     

1.21%, 4/15/04(a)

      9,000,000
        

Pacific Life Insurance

       
  2,000     

1.23%, 6/16/04(a)(c)
(cost $2,000,000; purchased 12/15/03)

      2,000,000
        

Salomon Smith Barney Holdings, MTN

       
  7,000     

5.18%, 8/2/04

      7,095,459
        

Travelers Insurance Co.

       
  2,000     

1.22%, 4/8/04(a)(c)
(cost $2,000,000; purchased 6/30/03)

      2,000,000
        

Wal-Mart Stores, Inc.

       
  6,550     

7.50%, 5/15/04

      6,598,907
             
                98,457,606
             
  U.S. Government Agency    12.3%       
        

Federal Home Loan Bank

       
  2,500     

4.875%, 4/16/04

      2,503,729
  2,725     

5.44%, 4/19/04

      2,730,728
  460     

3.375%, 5/14/04

      461,127
  1,450     

3.375%, 6/15/04

      1,456,358
  4,750     

1.11%, 8/4/04(d)

      4,731,858
  9,000     

1.45%, 3/11/05

      9,000,000
        

Federal Home Loan Mortgage Corp.

       
  2,750     

3.25%, 5/20/04, MTN

      2,757,134
  4,150     

6.485%, 6/24/04

      4,198,742
  9,000     

1.52%, 12/24/04, MTN

      9,000,000
        

Federal National Mortgage Association

       
  850     

3.00%, 6/15/04

      852,979
  13,000     

1.11%, 8/9/04(d)

      12,948,361
  9,000     

1.40%, 3/29/05, MTN

      9,000,000
             
                59,641,016
             

 

See Notes to Financial Statements.

 

8    

 

 

 

Principal
Amount (000)		      Description    Value (Note 1)
  Repurchase Agreement    3.2%       
        

Joint Repurchase Agreement Account, 1.08%, 4/1/04

       
$ 15,635     

(Note 4)

    $ 15,635,000
             
        

Total Investments    91.8%
(amortized cost $444,101,348)(b)

      444,101,348
        

Other assets in excess of liabilities    8.2%

      39,659,997
             
        

Net Assets    100%

    $ 483,761,345
             
(a) Variable rate instrument. The maturity date presented for these instruments is the next date on which the rate of interest is adjusted.
(b) Federal income tax basis is the same as for financial reporting purposes.
(c) Funding agreement, illiquid and restricted as to resale; the aggregate cost of such securities is $11,000,000. The aggregate value of $11,000,000 is approximately 2.3% of net assets.
(d) Rate quoted represents yield-to-maturity as of purchase date.

MTN—Medium Term Note.

 

The industry classification of portfolio holdings and assets in excess of other liabilities shown as a percentage of net assets as of March 31, 2004 was as follows:

 

Asset Backed Securities

    24.8 %

Commercial Banks

    22.3  

Federal Credit Agencies

    12.3  

Security Brokers & Dealers

    10.9  

Financial Services

    5.6  

Courier Services

    4.3  

Short-Term Business Credit

    3.3  

Repurchase Agreement

    3.2  

Insurance

    2.6  

Retail Discount Stores

    1.4  

Retail Restaurants

    0.6  

Bank Holding Companies

    0.5  
    
     91.8  

Other assets in excess of liabilities

    8.2  
    
     100.0 %
    

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   9

 

Statement of Assets and Liabilities

 

as of March 31, 2004 (Unaudited)

 

Assets

       

Investments, at amortized cost which approximates market value

    $ 444,101,348

Cash

      806

Receivable for Fund shares sold

      53,230,459

Interest receivable

      1,013,633

Prepaid expenses

      2,768
    

Total assets

      498,349,014
    

Liabilities

       

Payable for Fund shares reacquired

      14,334,385

Accrued expenses

      149,215

Dividends payable

      87,030

Management fee payable

      17,039
    

Total liabilities

      14,587,669
    

Net Assets

    $ 483,761,345
    
        

Net assets were comprised of:

       

Shares of beneficial interest, at $.00001 par value

    $ 4,838

Paid-in capital in excess of par

      483,756,507
    

Net assets, March 31, 2004

    $ 483,761,345
    

Net asset value, offering price and redemption price per share
($483,761,345 ÷ 483,761,345 shares of beneficial interest issued and outstanding)

    $ 1.00
    

 

See Notes to Financial Statements.

 

10    

 

Statement of Operations

 

Six Months Ended March 31, 2004 (Unaudited)

 

Net Investment Income

       

Income

       

Interest

    $ 2,382,830
    

Expenses

       

Management fee

      134,416

Transfer agent’s fees and expenses

      197,000

Registration fees

      96,000

Custodian’s fees and expenses

      56,000

Reports to shareholders

      18,000

Legal fees and expenses

      16,000

Audit fee

      14,000

Trustees’ fees

      8,000

Miscellaneous

      6,310
    

Total expenses

      545,726
    

Net investment income

      1,837,104
    

Realized Gain On Investments

       

Net realized gain on investments transactions

      905
    

Net Increase In Net Assets Resulting From Operations

    $ 1,838,009
    

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   11

 

Statement of Changes in Net Assets

 

(Unaudited)

 

     Six Months
Ended
March 31, 2004		        Year
Ended
September 30, 2003		  

Increase (Decrease) In Net Assets

                    
  

Operations

                    

Net investment income

    $ 1,837,104        $ 4,926,347  

Net realized gain on investment transactions

      905          5,601  
    
    

Net increase in net assets resulting from operations

      1,838,009          4,931,948  
    
    

Dividends and distributions (Note 1)

      (1,838,009 )        (4,931,948 )
    
    

Fund share transactions (at $1 per share)

                    

Net proceeds from shares sold

      2,017,929,621          3,390,187,342  

Net asset value of shares issued in reinvestment of dividends and distributions

      1,801,100          4,931,327  

Cost of shares reacquired

      (1,955,143,456 )        (3,487,962,007 )
    
    

Net increase (decrease) in net assets from Fund share transactions

      64,587,265          (92,843,338 )
    
    

Total increase (decrease)

      64,587,265          (92,843,338 )

Net Assets

                    
  

Beginning of period

      419,174,080          512,017,418  
    
    

End of period

    $ 483,761,345        $ 419,174,080  
    
    

 

See Notes to Financial Statements.

 

12    

 

Notes to Financial Statements

 

(Unaudited)

 

Cash Accumulation Trust (the “Trust”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The Trust consists of two series—the National Money Market Fund and the Liquid Assets Fund (the “Fund”). These financial statements relate to the Liquid Assets Fund. The Financial Statements of the other series is not presented herein. The Fund commenced investment operations on December 22, 1997. The investment objective of the Fund is current income to the extent consistent with the preservation of capital and liquidity. The Fund invests primarily in a portfolio of U.S. Government obligations, financial institution obligations and other high quality money market instruments maturing in thirteen months or less whose ratings are within the two highest ratings categories by a nationally recognized statistical rating organization or, if not rated, are of comparable quality. The ability of the issuers of the securities held by the Fund to meet its obligations may be affected by economic developments in a specific industry or region.

 

Note 1. Accounting Policies

 

The following is a summary of significant accounting policies followed by the Trust and the Fund in the preparation of its financial statements.

 

Securities Valuations: Portfolio securities of the Fund are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. If the amortized cost method is determined not to represent fair value, the fair value shall be determined by or under the direction of the Board of Trustees.

 

The Fund held illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities, sometimes referred to as private placements, are valued pursuant to valuation procedures noted above.

 

Repurchase Agreements: In connection with transactions in repurchase agreements with United States financial institutions, it is the Fund’s policy that its custodian or designated subcustodians under triparty repurchase agreements, as the case may be, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the

 

Cash Accumulation Trust/Liquid Assets Fund   13

 

Notes to Financial Statements

 

(Unaudited) Cont’d

 

 

collateral is marked to market on a daily basis to ensure the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Series may be delayed or limited.

 

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses on sales of securities are calculated on the identified cost basis. Interest income including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis. The Trust’s expenses are allocated to the respective funds on the basis of relative net assets except for expenses that are charged directly at a fund level.

 

Federal Income Taxes: For federal income tax purposes, each fund in the Trust is treated as a separate tax paying entity. It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.

 

Dividends and Distributions: The Fund declares daily dividends from net investment income and net realized short-term capital gains or losses. Payment of dividends is made monthly. Dividends and distributions are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles.

 

Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

Note 2. Agreements

 

The Trust has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM furnishes investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the cost of compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

 

14    

 

Under the management agreement, PI is reimbursed by the Fund for its direct administrative costs and expenses, excluding overhead and profit incurred in providing services to the Fund, up to a maximum of .39% of the average daily net assets. For the six months ended March 31, 2004, the annualized management costs were .07% of the Fund’s average daily net assets.

 

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”) which acts as the distributor of the Fund. No distribution or service fees are paid to PIMS as distributor of the Fund.

 

PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

Note 3. Other Transactions with Affiliates

 

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Trust’s transfer agent. During the six months ended March 31, 2004, the Fund incurred fees of approximately $184,300 for the services of PMFS. As of March 31, 2004, $31,500 of such fees were due to PMFS. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to nonaffiliates, where applicable.

 

Note 4. Joint Repurchase Agreement Account

 

The Fund, along with other affiliated registered investment companies, transfers uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S. Treasury or federal agency obligations. As of March 31, 2004, the Fund had a 2.54% undivided interest in the joint account. The undivided interest for the Fund represents $15,635,000 in principal amount. As of such date, each repurchase agreement in the joint account and the collateral therefore were as follows:

 

Bear Stearns, 1.08% in the principal amount of $15,050,000, repurchase price $15,050,452, dated 3/31/04 due 4/1/04. The value of the collateral including accrued interest was $15,353,425.

 

Goldman Sachs & Co., 1.08% in the principal amount of $200,000,000, repurchase price $200,006,000, dated 3/31/04 due 4/1/04. The value of the collateral including accrued interest was $204,000,000.

 

Cash Accumulation Trust/Liquid Assets Fund   15

 

Notes to Financial Statements

 

Cont’d

 

 

Greenwich Capital Markets, 1.08% in the principal amount of $200,000,000, repurchase price $200,006,000, dated 3/31/04 due 4/1/04. The value of the collateral including accrued interest was $204,001,795.

 

UBS Warburg LLC, 1.08% in the principal amount of $200,000,000, repurchase price $200,006,000, dated 3/31/04 due 4/1/04. The value of the collateral including accrued interest was $204,001,144.

 

Note 5. Change in Independent Auditors

 

PricewaterhouseCoopers LLP was previously the independent auditors for the Fund. The decision to change the independent auditors was approved by the Audit Committee and by the Board of Trustees in a meeting held on September 2, 2003, resulting in KPMG LLP’s appointment as independent auditors of the Fund.

 

The reports on the financial statements of the Fund audited by PricewaterhouseCoopers LLP through the year ended September 30, 2003 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements between the Fund and PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.

 

16    

 

Financial Highlights

 

MARCH 31, 2004   SEMIANNUAL REPORT

 

Cash Accumulation Trust

Liquid Assets Fund

 

Financial Highlights

 

(Unaudited)

 

     Six Months Ended
March 31, 2004		  
  

Per Share Operating Performance:

         

Net Asset Value, Beginning Of Period

    $ 1.00  
    

Net investment income and net realized gains

      — (c)

Dividends and distributions to shareholders

      — (c)
    

Net asset value, end of period

    $ 1.00  
    

Total Return(a)

      .45 %

Ratios/Supplemental Data:

         

Net assets, end of period (000)

    $ 483,761  

Average net assets (000)

    $ 407,085  

Ratios to average net assets:

         

Expenses

      .27 %(b)

Net investment income

      .90 %(b)
(a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns for periods of less than one full year are not annualized.
(b) Annualized.
(c) Less than $.005 per share.

 

See Notes to Financial Statements.

 

18    

Year Ended September 30,  
2003     2002     2001     2000     1999  
  
                                     
$ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00  
 
 
 
 
  .01       .02       .05       .06       .05  
  (.01 )     (.02 )     (.05 )     (.06 )     (.05 )
 
 
 
 
$ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00  
 
 
 
 
  1.14 %     2.04 %     5.33 %     6.15 %     5.05 %
                                     
$ 419,174     $ 512,017     $ 556,572     $ 488,807     $ 394,612  
$ 434,433     $ 508,258     $ 486,816     $ 417,161     $ 386,144  
                                     
  .28 %     .23 %     .21 %     .24 %     .27 %
  1.13 %     1.99 %     5.16 %     6.03 %     4.94 %

 

See Notes to Financial Statements.

 

 

Cash Accumulation Trust/Liquid Assets Fund   19

 

n  MAIL   n  TELEPHONE

Gateway Center Three

100 Mulberry Street

Newark, NJ 07102-4077

   (800) 225-1852

 

PROXY VOTING
The Board of Trustees of the Fund has delegated to the Fund’s investment adviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the SEC’s website at http://www.sec.gov.

 

TRUSTEES
David E.A. Carson•Robert F. Gunia•Robert E. La Blanc•Douglas H. McCorkindale•
Richard A. Redeker•Judy A. Rice•Robin B. Smith•Stephen D. Stoneburn•Clay T. Whitehead

 

OFFICERS
Judy A. Rice, President•Robert F. Gunia, Vice President•Grace C. Torres, Treasurer and Principal Financial and Accounting Officer•Marguerite E.H. Morrison, Chief Legal Officer and Assistant Secretary•Jonathan D. Shain, Secretary•Maryanne Ryan, Anti-Money Laundering Compliance Officer•Lee D. Augsburger, Chief Compliance Officer

 

MANAGER   Prudential Investments LLC    Gateway Center Three
100 Mulberry Street
Newark, NJ 07102
INVESTMENT ADVISER   Prudential Investment
Management, Inc.		    Gateway Center Two
100 Mulberry Street
Newark, NJ 07102
DISTRIBUTOR   Prudential Investment
Management Services LLC		    Gateway Center Three
14th Floor
100 Mulberry Street
Newark, NJ 07102
CUSTODIAN   State Street Bank
and Trust Company		    One Heritage Drive
North Quincy, MA 02171
TRANSFER AGENT   Prudential Mutual Fund
Services LLC		    PO Box 8098
Philadelphia, PA 19101
INDEPENDENT AUDITORS   KPMG LLP    757 Third Avenue
New York, NY 10017
FUND COUNSEL   Sullivan & Cromwell LLP    125 Broad Street
New York, NY 10004

 

Cash Accumulation Trust/Liquid Assets Fund
   

NASDAQ

   PLQXX        
   

CUSIP

   147541502        
                 

 

An investor should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The prospectus for the Fund contains this and other information about the Fund. An investor may obtain a prospectus by visiting our website at www.prudential.com or by calling (800) 225-1852. The prospectus should be read carefully before investing.

 

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter. The accompanying financial statements as of March 31, 2004 were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

Quantitative Management and Prudential Fixed Income are business units of Prudential Investment Management, Inc. (PIM), and Jennison Associates LLC is a subsidiary of PIM. Jennison Associates LLC and PIM are registered investment advisers. PIM is a subsidiary of Prudential Financial, Inc.

 

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY   MAY LOSE VALUE   ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

 

 

 

Cash Accumulation Trust/Liquid Assets Fund
   

NASDAQ

   PLQXX        
   

CUSIP

   147541502        
                 

 

MF175E2    IFS-A091960    Ed. 05/2004

 

 

 

 

SEMIANNUAL REPORT

MARCH 31, 2004

 

 

CASH ACCUMULATION TRUST/

NATIONAL MONEY MARKET FUND

 

FUND TYPE

Money market

 

OBJECTIVE

Current income to the extent consistent with preservation of capital and liquidity

 

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.

 

 

 

 

 

 

Dear Shareholder,

May 18, 2004

 

As the U.S. stock market slowed in 2004 following its particularly strong performance in 2003, some investors still seemed to be watching developments from the sidelines. Though the economy appears sound, given the unsettled global political climate and the potential for rising interest rates in the United States, we can understand why some investors may want to remain cautious. A broadly diversified asset allocation strategy can help protect you against inflation and increase your chances of participating in economic growth. As part of such a strategy, holding a cash reserve in a money market fund can help you meet short-term obligations or deal with emergencies without having to liquidate longer-term assets at what may be an inappropriate time.

 

We recommend that you develop a diversified asset allocation strategy in consultation with a financial professional who knows you and who understands your reasons for investing, the time you have to reach your goals, and the amount of risk you are comfortable assuming. Your financial professional can help you choose the appropriate funds to implement your strategy.

 

Sincerely,

 

LOGO

 

Judy A. Rice, President

Cash Accumulation Trust/National Money Market Fund

 

Cash Accumulation Trust/National Money Market Fund   1

 

Your Fund’s Performance

 

 

Fund objective

The investment objective of the National Money Market Fund (the Fund) is current income to the extent consistent with preservation of capital and liquidity. There can be no assurance that the Fund will achieve its investment objective.

 

Yields will fluctuate from time to time, and past performance is not indicative of future results. Current performance may be lower or higher than the past performance quoted. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund.

 

Fund Facts as of 3/31/04
     7-Day
Current Yield		     Net Asset
Value (NAV)		    Weighted Avg.
Maturity (WAM)		    Net Assets
(Millions)

National Money Market Fund

    0.49 %   $ 1.00    66 Days    $ 381.2

iMoneyNet, Inc. Prime

Retail Universe Average*

    0.37 %     N/A    57 Days      N/A

 

* iMoneyNet, Inc. reports a 7-day current yield and WAM on Tuesdays. This is the data of all funds in the iMoneyNet, Inc. Prime Retail Universe Average category as of March 30, 2004, the closest date to the end of the Fund’s current reporting period.

 

Money Market Fund Yield Comparison

 

LOGO

 

2    

 

Weighted Average Maturity Comparison

 

LOGO

 

Yields will fluctuate from time to time, and past performance is not indicative of future results. Current performance may be lower or higher than the past performance quoted. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund.

 

Past performance is not indicative of future results. The graphs portray weekly 7-day current yields and weekly WAMs respectively for the Cash Accumulation Trust/National Money Market Fund and the iMoneyNet, Inc. Prime Retail Universe Average every Tuesday from September 30, 2003 to March 30, 2004, the closest dates to the beginning and end of the Fund’s current reporting period. The data portrayed for the Fund at the end of the reporting period in the graphs may not match the data portrayed in the Fund Facts table as of March 31, 2004.

 

 

Cash Accumulation Trust/National Money Market Fund   3

 

 

 

This Page Intentionally Left Blank

 

Portfolio of Investments

 

as of March 31, 2004 (Unaudited)

 

Principal
Amount (000)		      Description    Value (Note 1)
                 
  Bank Notes    3.1%
$ 4,000     

American Express Centurion Bank
1.06%, 4/29/04(a)

    $ 3,999,970
  8,000     

National City Bank
1.19%, 4/12/04(a)

      8,002,527
             
                12,002,497
             
  Certificates of Deposit—Yankee    16.3%
  10,000     

Banco Bilbao Vizcaya Argentaria
1.05%, 4/8/04(a)

      9,999,989
  3,000     

BNP Paribas SA
1.15%, 7/22/04

      2,999,908
  18,000     

Canadian Imperial Bank of Commerce
1.04%, 6/7/04

      18,000,000
  5,000     

Danske Corp.
1.29%, 10/18/04

      4,999,726
  7,000     

HSH Nordbank AG
1.03125%, 4/1/04(a)

      6,998,705
  4,000     

Royal Bank of Scotland
1.35%, 4/19/04

      4,000,000
  10,000     

Societe Generale North America
1.0275%, 4/13/04(a)

      9,997,557
  5,000     

Unicredito Italiano SpA
1.08%, 4/5/04

      5,000,000
             
                61,995,885
             
  Commercial Paper    47.0%
  4,000     

Amsterdam Funding Corp.
1.04%, 4/15/04

      3,998,382
  15,000     

1.04%, 5/5/04

      14,985,267
  5,932     

Banque Et Caisse D’Epargne
1.085%, 7/9/04

      5,914,300
  6,413     

Caisse Nationale Des Caisses D’Epar
1.06%, 4/13/04

      6,410,734
  11,213     

Daimlerchrysler Revolving Auto
1.035%, 4/21/04

      11,206,553
  6,460     

1.04%, 4/28/04

      6,454,961
  13,947     

Edison Asset Securitization LLC
1.04%, 5/24/04

      13,925,646
  1,461     

HBOS Treasury Services PLC
1.05%, 6/4/04

      1,458,273
        

Long Lane Master Trust IV

       
  12,000     

1.04%, 4/22/04

      11,992,720
  6,952     

1.05%, 4/30/04

      6,946,120

 

See Notes to Financial Statements

 

Cash Accumulation Trust/National Money Market Fund   5

 

Portfolio of Investments

 

as of March 31, 2004 (Unaudited) Cont’d.

 

Principal
Amount (000)		      Description    Value (Note 1)
                 
$ 4,800     

Nordeutsche Landesbank
1.04%, 5/20/04

    $ 4,793,205
  5,000     

1.04%, 6/11/04

      4,989,745
  1,100     

Nyala Funding LLC
1.09%, 5/18/04

      1,098,435
  6,000     

Old Line Funding Corp.
1.04%, 5/14/04

      5,992,547
  4,297     

Park Granada LLC
1.08%, 5/10/04

      4,291,972
  10,000     

1.07%, 7/15/04

      9,968,792
  16,000     

PB Finance (Delaware), Inc.
1.04%, 5/11/04

      15,981,511
  5,000     

Santander Central Hispano Finance
1.07%, 9/8/04

      4,976,222
  14,000     

Sheffield Receivables Corp.
1.04%, 4/30/04

      13,988,271
  5,000     

Societe Generale North America
1.045%, 5/6/04

      4,994,920
  10,317     

Swiss Re Financial Products
1.05%, 4/19/04

      10,311,583
  6,417     

Thunder Bay Funding, Inc.
1.03%, 4/21/04

      6,413,328
  8,000     

Volkswagen of America
1.03%, 5/7/04

      7,991,760
             
                179,085,247
             
  Other Corporate Obligations    21.0%
  2,000     

American Express Credit Corp., MTN
1.15%, 4/5/04(a)

      2,000,000
  7,000     

Associates Corp. N.A.
5.80%, 4/20/04

      7,017,003
  1,500     

Bank One Corp., MTN
1.30%, 5/12/04(a)

      1,500,304
        

BankAmerica Corp.

       
  1,000     

1.38%, 5/3/04, MTN(a)

      1,000,279
  2,400     

6.625%, 6/15/04

      2,426,594
        

Caterpillar Financial Services Corp.

       
  1,000     

1.305%, 4/2/04, MTN(a)

      1,000,007
  6,000     

1.2525%, 4/12/04, MTN(a)

      6,005,151
  3,005     

6.875%, 8/1/04

      3,060,392
  10,000     

Colgate Palmolive Co., MTN
1.245%, 5/17/04(a)

      10,006,646
        

General Electric Capital Assurance Co.

       
  2,000     

1.17%, 4/22/04
(cost $2,000,000; purchased 7/17/03)(a)(c)

      2,000,000
        

General Electric Capital Corp., MTN

       
  7,000     

1.17%, 4/19/04(a)

      7,000,000
  1,000     

7.25%, 5/3/04

      1,005,348

 

See Notes to Financial Statements

 

6    

 

 

Principal
Amount (000)		      Description    Value (Note 1)
                 
$ 12,000     

Goldman Sachs Group, Inc., MTN
1.26%, 6/15/04(a)

    $ 12,000,000
  8,000     

Merrill Lynch & Co., Inc., MTN
1.215%, 4/12/04(a)

      8,000,000
  2,000     

Metropolitan Life Insurance Co.
1.265%, 4/1/04
(cost $2,000,000; purchased 10/01/03)(a)(c)

      2,000,000
  8,000     

Morgan Stanley, MTN
1.21%, 4/15/04(a)

      8,000,000
  2,000     

Pacific Life Insurance Co.
1.23%, 6/16/04
(cost $2,000,000; purchased 12/15/03)(a)(c)

      2,000,000
        

Travelers Insurance Co.

       
  2,000     

1.22%, 4/8/04
(cost $2,000,000; purchased 6/30/03)(a)(c)

      2,000,000
  2,000     

Wal-Mart Stores Inc.
7.50%, 5/15/04

      2,015,510
             
                80,037,234
             
  U.S. Government Agency    9.4%
        

Federal Home Loan Bank

       
  9,000     

1.45%, 3/11/05

      9,000,000
  11,000     

1.35%, 4/15/05

      11,000,000
        

Federal National Mortgage Association

       
  1,706     

5.625%, 5/14/04

      1,714,839
  1,000     

0.00%, 7/1/04

      997,386
  1,000     

6.50%, 8/15/04

      1,019,512
  6,000     

1.43%, 11/15/04, MTN

      6,000,000
  6,000     

1.40%, 3/29/05, MTN

      6,000,000
             
                35,731,737
             
  Repurchase Agreement    3.1%
  11,830     

Goldman Sachs & Co.
1.08%, dated 3/31/04, due 4/1/04 in the amount of
$11,830,355 (cost $11,830,000; the value of the collateral
including accrued interest was $12,066,600)(d)

      11,830,000
             
        

Total Investments    99.9%
(amortized cost $380,682,600(b))

      380,682,600
        

Other assets in excess of liabilities    0.1%

      487,102
             
        

Net Assets    100%

    $ 381,169,702
             
(a) Variable rate instrument. The maturity date presented for these instruments is the next date on which the rate of interest is adjusted or the date on which the security can be redeemed at par.
(b) Federal income tax basis is the same as for financial reporting purposes.
(c) Funding agreement, illiquid and restricted as to resale. The aggregate cost of such securities is $8,000,000. The aggregate value of $8,000,000 is approximately 2.1% of net assets.
(d) Repurchase agreements are collateralized by United States Treasury or federal agency obligations.

MTN—Medium Term Note.

 

See Notes to Financial Statements

 

Cash Accumulation Trust/National Money Market Fund   7

 

Portfolio of Investments

 

as of March 31, 2004 (Unaudited) Cont’d.

 

The industry classification of portfolio holdings and assets in excess of other liabilities shown as a percentage of net assets as of March 31, 2004 was as follows:

 

Foreign Bank Agencies

    25.1 %

Asset-Backed Securities

    23.9  

Federal Credit Agencies

    9.4  

National Commercial Banks

    8.1  

Security Brokers/Dealers

    7.4  

Courier Services

    4.2  

Tri Party Repurchase Agreement

    3.1  

Fire, Marine, Casualty Insurance

    3.0  

Oil & Gas Field Service

    2.7  

Soap/Detergent

    2.6  

Life Insurance

    2.1  

Motor Vehicle Parts

    2.1  

Short Term Business Credit

    2.1  

Finance Lessor

    1.8  

Bank Holding Company

    1.3  

Finance Services

    0.5  

Variety Stores

    0.5  
    
     99.9  

Other assets in excess of liabilities

    0.1  
    
     100 %
    

 

See Notes to Financial Statements

 

8    

 

Statement of Assets and Liabilities

 

as of March 31, 2004 (Unaudited)

 

Assets

       

Investments, at amortized cost which approximates market value

    $ 380,682,600

Cash

      619

Receivable for Fund shares sold

      10,518,544

Interest receivable

      685,583

Prepaid expenses

      78,783
    

Total assets

      391,966,129
    

Liabilities

       

Payable for Fund shares reacquired

      10,497,407

Management fee payable

      123,603

Accrued expenses

      101,452

Dividends payable

      42,272

Distribution fee payable

      31,693
    

Total liabilities

      10,796,427
    

Net Assets

    $ 381,169,702
    
        

Net assets were comprised of:

       

Shares of beneficial interest at par, at $.00001 par value

    $ 3,812

Paid-in capital in excess of par

      381,165,890
    

Net assets, March 31, 2004

    $ 381,169,702
    

Net asset value, offering price and redemption price per share

($381,169,702 ÷ 381,169,702 shares of beneficial interest issued and outstanding)

      $1.00
    

 

See Notes to Financial Statements

 

Cash Accumulation Trust/National Money Market Fund   9

 

Statement of Operations

 

Six Months Ended March 31, 2004 (Unaudited)

 

Net Investment Income

       

Income

       

Interest

    $ 1,874,911
    

Expenses

       

Management fee

      619,795

Distribution fee

      158,922

Transfer agent’s fees and expenses

      111,000

Registration fees

      76,000

Custodian’s fees and expenses

      50,000

Legal fees and expenses

      16,000

Reports to shareholders

      14,000

Trustees’ fees

      7,000

Audit fee

      6,000

Miscellaneous

      4,781
    

Total expenses

      1,063,498
    

Net investment income

      811,413
    

Realized Gain On Investments

       

Net realized gain on investment transactions

      7,052
    

Net Increase In Net Assets Resulting From Operations

    $ 818,465
    

 

See Notes to Financial Statements

 

10    

 

Statement of Changes in Net Assets

 

For the Six Months and Year Ended Periods (Unaudited)

 

     Six Months
Ended
March 31, 2004		        Year
Ended
September 30, 2003		  

Increase (Decrease) In Net Assets

                    
  

Operations

                    

Net investment income

    $ 811,413        $ 2,180,770  

Net realized gain on investment transactions

      7,052          7,492  
    
    

Net increase in net assets resulting from operations

      818,465          2,188,262  
    
    

Dividends and distributions (Note 1)

      (818,465 )        (2,188,262 )
    
    

Fund share transactions (at $1 per share)

                    

Net proceeds from shares sold

      1,704,665,209          2,212,699,932  

Net asset value of shares issued to shareholders in reinvestment of dividends and distributions

      784,873          2,207,122  

Cost of shares reacquired

      (1,606,097,004 )        (2,270,920,533 )
    
    

Net increase (decrease) in net assets from Fund share transactions

      99,353,078          (56,013,479 )
    
    

Total increase (decrease)

      99,353,078          (56,013,479 )

Net Assets

                    
  

Beginning of period

      281,816,624          337,830,103  
    
    

End of period

    $ 381,169,702        $ 281,816,624  
    
    

 

See Notes to Financial Statements

 

Cash Accumulation Trust/National Money Market Fund   11

 

Notes to Financial Statements

 

(Unaudited)

 

Cash Accumulation Trust (the “Trust”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The Trust consists of two series—the National Money Market Fund (the “Fund”) and the Liquid Assets Fund. These financial statements relate to the National Money Market Fund. The financial statements of the other series are not presented herein. The investment objective of the Fund is current income to the extent consistent with the preservation of capital and liquidity. The Fund invests primarily in a portfolio of U.S. Government obligations, financial institution obligations and other high quality money market instruments maturing in thirteen months or less whose ratings are within the two highest ratings categories by a nationally recognized statistical rating organization or, if not rated, are of comparable quality. The ability of the issuers of the securities held by the Fund to meet its obligations may be affected by economic developments in a specific industry or region.

 

Note 1. Accounting Policies

 

The following is a summary of significant accounting policies followed by the Trust and the Fund in the preparation of its financial statements.

 

Securities Valuations: Portfolio securities of the Fund are valued at amortized cost, which approximates market value. The amortized cost method of valuation involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. If the amortized cost method is determined not to represent fair value, the fair value shall be determined by or under the direction of the Board of Trustees.

 

The Fund held illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities, sometimes referred to as private placements, are valued pursuant to the valuation procedures noted above.

 

Repurchase Agreements: In connection with transactions in repurchase agreements with United States financial institutions, it is the Fund’s policy that its custodian or designated subcustodians under triparty repurchase agreements, as the case may be, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of

 

12    

 

collateral is marked to market on a daily basis to ensure adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

 

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities as required, is recorded on the accrual basis.

 

Federal Income Taxes: For federal income tax purposes, each Fund in the Trust is treated as a separate taxpaying entity. It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.

 

Dividends and Distributions: The Fund declares daily dividends from net investment income and net realized short-term capital gains or losses, if any, as dividends daily to its shareholders of record at the time of such declaration. Payment of dividends is made monthly. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles.

 

Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

Note 2. Agreements

 

The Trust has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM furnishes investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the cost of compensation of officers of the Trust, occupancy and certain clerical and bookkeeping costs of the Trust. The Trust bears all other costs and expenses.

 

The management fee paid to PI is computed daily and payable monthly, at an annual rate of .39% of the Fund’s average daily net assets up to and including $1 billion,

 

Cash Accumulation Trust/National Money Market Fund   13

 

Notes to Financial Statements

 

(Unaudited) Cont’d

 

 

.375% of the next $500 million, .35% of the next $500 million and .325% of the Fund’s average daily net assets in excess of $2 billion.

 

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s shares pursuant to the plan of distribution at an annual rate of .10 of 1% of the average daily net assets, regardless of expenses actually incurred by PIM. The distribution fees are accrued daily and payable monthly.

 

PI, PIM, and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

Note 3. Other Transactions with Affiliates

 

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Trust’s transfer agent. During the six months ended March 31, 2004, the Fund incurred fees of approximately $108,500 for the services of PMFS. As of March 31, 2004, approximately $18,500 of such fees were due to PMFS. Transfer agent fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to nonaffiliates.

 

Note 4. Change in Independent Auditors

 

PricewaterhouseCoopers LLP was previously the independent auditors for the Fund. The decision to change the independent auditors was approved by the Audit Committee and by the Board of Directors in a meeting held on September 2, 2003, resulting in KPMG LLP’s appointment as independent auditors of the Fund.

 

The reports on the financial statements of the Fund audited by PricewaterhouseCoopers LLP through the year ended September 30, 2003 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements between the Fund and PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.

 

14    

 

Financial Highlights

 

MARCH 31, 2004   SEMI-ANNUAL REPORT

 

Cash Accumulation Trust

National Money Market Fund

 

Financial Highlights (Unaudited)

 

    

Six Months Ended

March 31, 2004

  
    
  

Per Share Operating Performance:

         

Net asset value, beginning of period

    $ 1.00  
    

Net investment income and net realized gains

      — (c)

Dividends and distributions to shareholders

      — (c)
    

Net asset value, end of period

    $ 1.00  
    

Total Return(a):

      0.25 %

Ratios/Supplemental Data:

         

Net assets, end of period (000)

    $ 381,170  

Average net assets (000)

    $ 317,844  

Ratios to average net assets:

         

Expenses, including distribution and service (12b-1) fees

      .67 %(b)

Expenses, excluding distribution and service (12b-1) fees

      .57 %(b)

Net investment income

      .51 %(b)
(a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns for periods less than a full year are not annualized.
(b) Annualized.
(c) Less than $.005 per share.

 

See Notes to Financial Statements.

 

16    

Year Ended September 30,
  
2003     2002     2001     2000     1999  
  
                                     
$ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00  
 
 
 
 
  .01       .02       .05       .06       .05  
  (.01 )     (.02 )     (.05 )     (.06 )     (.05 )
 
 
 
 
$ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00  
 
 
 
 
  0.74 %     1.67 %     4.9 %     5.7 %     4.6 %
                                     
$ 281,817     $ 337,830     $ 395,261     $ 381,836     $ 403,566  
$ 296,479     $ 350,387     $ 381,639     $ 393,073     $ 412,538  
                                     
  .69 %     .65 %     .64 %     .68 %     .68 %
  .59 %     .55 %     .54 %     .58 %     .58 %
  .74 %     1.62 %     4.80 %     5.55 %     4.56 %

 

See Notes to Financial Statements.

 

 

Cash Accumulation Trust/National Money Market Fund   17

 

n MAIL   n TELEPHONE

Gateway Center Three

100 Mulberry Street

Newark, NJ 07102

   (800) 225-1852

 

PROXY VOTING
The Board of Trustees of the Fund has delegated to the Fund’s investment adviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the SEC’s website at http://www.sec.gov.

 

TRUSTEES
David E.A. Carson•Robert F. Gunia•Robert E. La Blanc•Douglas H. McCorkindale•
Richard A. Redeker•Judy A. Rice•Robin B. Smith•Stephen D. Stoneburn•Clay T. Whitehead

 

OFFICERS
Judy A. Rice, President•Robert F. Gunia, Vice President•Grace C. Torres, Treasurer and Principal Financial and Accounting Officer•Marguerite E.H. Morrison, Chief Legal Officer and Assistant Secretary•Jonathan D. Shain, Secretary•Maryanne Ryan, Anti-Money Laundering Compliance Officer•Lee D. Augsburger, Chief Compliance Officer

 

MANAGER   Prudential Investments LLC    Gateway Center Three
100 Mulberry Street
Newark, NJ 07102
INVESTMENT ADVISER   Prudential Investment
Management, Inc.		    Gateway Center Two
100 Mulberry Street
Newark, NJ 07102
DISTRIBUTOR   Prudential Investment
Management Services LLC		    Gateway Center Three
14th Floor
100 Mulberry Street
Newark, NJ 07102
CUSTODIAN   State Street Bank
and Trust Company		    One Heritage Drive
North Quincy, MA 02171
TRANSFER AGENT   Prudential Mutual Fund
Services LLC		    PO Box 8098
Philadelphia, PA 19101
INDEPENDENT AUDITORS   KPMG LLP    757 Third Avenue
New York, NY 10017
FUND COUNSEL   Sullivan & Cromwell LLP    125 Broad Street
New York, NY 10004

 

Cash Accumulation Trust/National Money Market Fund
   

NASDAQ

   NMMXX        
   

CUSIP

   147541106        
                 

 

An investor should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The prospectus for the Fund contains this and other information about the Fund. An investor may obtain a prospectus by visiting our website at www.prudential.com or by calling (800) 225-1852. The prospectus should be read carefully before investing.

 

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter. The accompanying financial statements as of March 31, 2004 were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

Quantitative Management and Prudential Fixed Income are business units of Prudential Investment Management, Inc. (PIM), and Jennison Associates LLC is a subsidiary of PIM. Jennison Associates LLC and PIM are registered investment advisers. PIM is a subsidiary of Prudential Financial, Inc.

 

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY   MAY LOSE VALUE   ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

 

 

 

Cash Accumulation Trust/National Money Market Fund
   

NASDAQ

   NMMXX        
   

CUSIP

   147541106        
                 

 

MF178E2    IFS-A091961    Ed. 05/2004

 

Item 2 – Code of Ethics – – Not required as this is not an annual filing.

 

Item 3 – Audit Committee Financial Expert – Not applicable with semi-annual filing

 

Item 4 – Principal Accountant Fees and Services – Not applicable with semi-annual filing.

 

Item 5 – Audit Committee of Listed Registrants – Not applicable.

 

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

 

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.

 

Item 8 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not

applicable.

 

Item 9 – Submission of Matters to a Vote of Security Holders: None.

 

Item 10 – Controls and Procedures

 

  (a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b) There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Item 11 – Exhibits

 

  (a) Code of Ethics – Not applicable with semi-annual filing.

 

  (b) Certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act – Attached hereto

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)           Cash Accumulation Trust                                                                                  

By (Signature and Title)*  

/s/    Jonathan D. Shain        

   

                          Jonathan D. Shain

                          Secretary

Date                           May 24, 2004                                                                                                 

 

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 (Signature and Title)*

  

/s/    Judy A. Rice        

   

                          Judy A. Rice

                          President and Principal Executive Officer

Date                           May 24, 2004                                                                                                 

By (Signature and Title)*  

/s/    Grace C. Torres        

   

                          Grace C. Torres

                          Treasurer and Principal Financial Officer

Date                           May 24, 2004                                                                                                 

 

* Print the name and title of each signing officer under his or her signature.