N-CSRS 1 dncsrs.htm CASH ACCUMULATION TRUST -- LIQUID ASSETS FUND Cash Accumulation Trust -- Liquid Assets Fund

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

Exact name of registrant as specified in charter:

    Cash Accumulation Trust

Address of principal executive offices:

    Gateway Center 3,
   100 Mulberry Street,
   Newark, New Jersey 07102

Name and address of agent for service:

    Deborah A. Docs
   Gateway Center 3,
   100 Mulberry Street,
   Newark, New Jersey 07102

Registrant’s telephone number, including area code:

    800-225-1852

Date of fiscal year end:

    9/30/2008

Date of reporting period:

    3/31/2008

Item 1

   –   Reports to Stockholders

 

 

 

SEMIANNUAL REPORT

MARCH 31, 2008

 

 

CASH ACCUMULATION TRUST/ LIQUID ASSETS FUND

 

 

LOGO

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.

The accompanying financial statements as of March 31, 2008, were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

 

May 15, 2008

 

Dear Shareholder:

 

We hope you find the semiannual report for the Liquid Assets Fund informative and useful. As a Liquid Assets Fund shareholder, you may be thinking about where you can find additional growth opportunities. You could invest in last year’s top-performing asset class and hope history repeats itself or you could stay in cash while waiting for the “right moment” to invest.

 

Instead, we believe it is better to take advantage of developing domestic and global investment opportunities through a diversified portfolio of stock and bond mutual funds. A diversified asset allocation offers two potential advantages. It helps you manage downside risk by not being overly exposed to any particular asset class, plus it gives you a better opportunity to have at least some of your assets in the right place at the right time. Your financial professional can help you create a diversified investment plan that may include mutual funds covering all the basic asset classes and that reflects your personal investor profile and tolerance for risk.

 

Thank you for choosing this Fund.

 

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 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 does not guarantee future results. Current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. For the most recent month-end performance update, call (800) 225-1852.

 

Fund Facts as of 3/31/08                     
     7-Day
Current Yield		     Net Asset
Value (NAV)		    Weighted Avg.
Maturity (WAM)		    Net Assets
(Millions)

Liquid Assets Fund

    3.08 %   $ 1.00    34 Days    $ 2,560.3

iMoneyNet, Inc. Prime
Retail Universe Average*

    2.44 %     N/A    48 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 25, 2008, the closest date before the end of the Fund’s current reporting period.

 

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.

 

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Money Market Fund Yield Comparison

 

LOGO

 

Weighted Average Maturity Comparison

 

LOGO

 

Yields will fluctuate from time to time, and past performance does not guarantee future results. Current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. For the most recent month-end performance update, call (800) 225-1852.

 

Past performance does not guarantee 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 March 27, 2007 to March 25, 2008, the closest dates before 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, 2008.

 

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.

 

Cash Accumulation Trust/Liquid Assets Fund   3

 

Fees and Expenses (Unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The example is based on an investment of $1,000 invested on October 1, 2007, at the beginning of the period, and held through the six-month period ended March 31, 2008. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

 

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of JennisonDryden funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

 

Actual Expenses

The first line in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

The second line in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual

 

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expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Cash Accumulation
Trust/Liquid
Assets Fund		   Beginning Account
Value
October 1, 2007		   Ending Account
Value
March 31, 2008		   Annualized
Expense Ratio
Based on the
Six-Month Period		     Expenses Paid
During the
Six-Month Period*
         
   

Actual

   $ 1,000.00   $ 1,023.60   0.04 %   $ 0.20
   

Hypothetical

   $ 1,000.00   $ 1,024.80   0.04 %   $ 0.20

* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 183 days in the six-month period ended March 31, 2008, and divided by the 366 days in the Fund’s fiscal year ending September 30, 2008 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

Cash Accumulation Trust/Liquid Assets Fund   5

 

 

 

This Page Intentionally Left Blank

Portfolio of Investments

 

as of March 31, 2008 (Unaudited)

 

Principal
Amount (000)		      Description    Value (Note 1)
       
  Certificates of Deposit    17.1%
$ 38,000     

Banco Bilbao Vizcaya Argentina
4.60%, 6/30/08

    $ 38,000,000
  19,000     

Banco Santander
2.88%, 7/3/08

      19,008,559
    

Barclays Bank PLC

   
  25,000     

5.20%, 4/11/08

      25,000,000
  49,000     

5.37%, 6/4/08

      49,000,000
  50,000     

2.65%, 6/24/08

      50,000,000
  13,000     

Branch Banking & Trust Co.
2.935%, 6/11/08

      13,000,000
  40,000     

Marshall & Ilsley Corp.
3.00%, 5/20/08

      40,000,000
  8,300     

Nordea Bank Finland AB
5.255%, 4/11/08

      8,300,851
    

Regions Bank

   
  36,000     

3.00%, 5/27/08

      36,000,000
  12,000     

3.00%, 5/30/08

      12,000,000
  103,000     

State Street Bank and Trust Co.
3.01%, 4/30/08

      103,000,000
  20,000     

Swedbank AB NY Branch
3.00%, 5/30/08

      20,000,000
  25,000     

Unicredito Italiano Bank
5.00%, 4/21/08

      25,000,000
           
          438,309,410
           
  Commercial Paper    38.4%
  40,000     

AIG Funding, Inc.
2.77%, 4/17/08(b)

      39,950,756
  42,563     

Allianz Finance Corp., 144A
3.02%, 4/14/08(b)

      42,516,583
  10,000     

Bank of America Corp.
2.95%, 5/23/08(b)

      9,957,389
    

Citigroup Funding, Inc.

   
  45,000     

4.90%, 4/21/08(b)

      44,877,500
  35,000     

3.10%, 5/14/08(b)

      34,870,403
  50,000     

3.08%, 5/28/08(b)

      49,756,167
  29,000     

Dexia Delaware LLC
3.06%, 6/4/08(b)

      28,842,240
  8,000     

Fortis Funding LLC, 144A
3.02%, 5/19/08(b)

      7,967,787

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   7

Portfolio of Investments

 

as of March 31, 2008 (Unaudited) continued

 

Principal
Amount (000)		      Description    Value (Note 1)
       
  Commercial Paper (cont’d.)       
    

ING America Insurance Holdings, Inc.

   
$ 33,500     

2.90%, 6/4/08(b)

    $ 33,327,289
  18,000     

2.91%, 6/6/08(b)

      17,903,970
  10,000     

2.80%, 6/9/08(b), 144A

      9,946,333
  39,966     

JPMorgan Chase & Co.
2.94%, 5/12/08(b)

      39,832,181
    

Long Lane Master Trust IV, 144A

   
  73,452     

3.05%, 4/10/08(b)

      73,395,992
  41,000     

3.04%, 4/14/08(b)

      40,954,991
    

Nestle Finance France SA

   
  100,000     

2.44%, 6/19/08(b)

      99,464,555
  12,076     

2.75%, 7/21/08(b), 144A

      11,973,606
  10,000     

Nyala Funding LLC, 144A
3.45%, 4/21/08(b)

      9,980,833
    

Old Line Funding Corp., 144A

   
  10,000     

2.75%, 4/21/08(b)

      9,984,722
  15,000     

2.90%, 5/1/08(b)

      14,963,750
  50,000     

PNC Funding Corp.
3.22%, 4/25/08(b)

      49,892,666
  33,900     

Prudential PLC, 144A
2.70%, 5/12/08(b)

      33,786,533
  6,500     

Stadshypotek Delaware
3.20%, 4/8/08(b)

      6,495,956
  21,000     

Swedbank AB
2.73%, 6/11/08(b)

      20,886,933
    

Swedbank Mortgage AB

   
  49,000     

3.89%, 4/22/08(b)

      48,888,811
  16,000     

3.10%, 5/23/08(b), 144A

      15,928,356
  40,000     

Swiss RE Financial Products, 144A
2.94%, 5/12/08(b)

      39,866,067
    

Tulip Funding Corp., 144A

   
  37,001     

3.05%, 4/14/08(b)

      36,960,394
  28,000     

3.00%, 4/15/08(b)

      27,967,333
  20,850     

2.77%, 4/21/08(b)

      20,818,029
    

Unicredito Italiano Bank Ireland, 144A

   
  50,000     

3.00%, 5/8/08(b)

      49,845,832
  12,057     

2.85%, 5/21/08(b)

      12,009,274
           
          983,813,231
           

 

See Notes to Financial Statements.

 

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Principal
Amount (000)		      Description    Value (Note 1)
       
  Loan Participations    2.0%
    

Archer Daniels Midland

   
$   25,000     

2.73%, 5/9/08(c)

    $ 25,000,000
  25,000     

2.70%, 5/13/08(c)

      25,000,000
           
          50,000,000
           
  Other Corporate Obligations    30.0%
  20,000     

Bank of New York Mellon (The), MTN
2.775%, 6/16/08(a)

      19,997,524
  75,000     

Bank of Scotland, MTN, 144A
3.065%, 9/5/08(a)

      75,000,001
  10,000     

BMW US Capital LLC, 144A
3.0863%, 9/4/08(a)

      10,000,000
  22,000     

Caja de Ahorro y Monte de Piedad De Madrid, S.A., 144A
4.0438%, 8/12/08(a)

      22,000,000
  50,000     

DNB Nor Bank ASA, 144A
2.599%, 8/22/08(a)

      50,000,000
    

Fortis Bank NY

   
  6,700     

2.649%, 6/30/08(a)

      6,690,960
  44,000     

3.8638%, 7/18/08(a), 144A

      43,997,428
    

General Electric Capital Corp.

   
  13,961     

3.12%, 5/19/08(a)

      13,962,615
  32,000     

2.6062%, 10/24/08, MTN(a)

      31,991,188
  25,000     

General Electric Co.
3.03%, 12/9/08(a)

      24,999,502
  7,000     

Goldman Sachs Group (The), MTN
2.6888%, 12/22/08(a)

      6,977,930
    

HSBC Finance Corp.

   
  38,400     

3.10%, 9/6/08(a)

      38,400,068
  5,000     

3.10%, 11/6/08(a)

      4,978,728
  12,000     

Irish Life & Permanent PLC, MTN, 144A
2.6488%, 8/20/08(a)

      11,999,990
  17,000     

John Deere Capital Corp., MTN
2.7788%, 9/25/08(a)

      16,994,839
    

JPMorgan Chase & Co., MTN

   
  45,000     

3.00%, 8/11/08(a)

      45,000,000
  35,000     

3.1094%, 9/2/08(a)

      35,000,000
  12,000     

Kommunalkredit Austria AG, 144A
2.6287%, 8/22/08(a)

      12,000,000
    

Merrill Lynch & Co., Inc., MTN

   
  20,000     

2.915%, 8/15/08(a)

      20,000,000
  45,000     

2.7388%, 8/22/08(a)

      45,000,000

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   9

Portfolio of Investments

 

as of March 31, 2008 (Unaudited) continued

 

Principal
Amount (000)		      Description    Value (Note 1)
       
  Other Corporate Obligations (cont’d.)       
$ 31,000     

Metropolitan Life Insurance Co.
3.1794%, 4/1/08(a)(c)(d)
(cost $31,000,000; date purchased 4/2/07)

    $ 31,000,000
  9,000     

Metropolitan Life Insurance Co. of Connecticut
3.1081%, 7/7/08(a)(c)(d)
(cost $9,000,000; date purchased 7/9/07)

      9,000,000
  23,000     

Morgan Stanley, MTN
3.269%, 10/31/08(a)

      23,000,676
  18,000     

Morgan Stanley Dean Witter & Co.
2.7438%, 8/26/08(a)

      18,001,973
  16,500     

Nordea Bank AB, 144A
3.02%, 8/8/08(a)

      16,500,238
  2,100     

Nordea BK Finland NY
3.0819%, 12/1/08(a)

      2,093,926
  20,000     

Paccar Financial Corp., MTN
2.89%, 8/12/08(a)

      20,000,159
  4,000     

Royal Bank Canada, MTN
3.1181%, 9/10/08(a)

      4,000,000
  42,800     

Skandinaviska Enskilda Banken AB, 144A
2.795%, 8/19/08(a)

      42,800,061
  4,000     

US Barcorp.
4.40%, 8/15/08

      4,021,882
  12,000     

Wal-Mart Stores, Inc.
2.70%, 6/16/08(a)

      11,998,856
  50,000     

Wells Fargo Bank NA
2.47%, 4/30/08

      50,000,000
           
          767,408,544
           
  U.S. Government Agencies    13.2%
    

Federal Home Loan Bank

   
  25,000     

2.7175%, 2/17/09(a)

      25,000,000
  35,000     

2.66%, 2/19/09(a)

      35,000,000
  64,000     

2.315%, 2/27/09(a)

      64,000,000
  34,000     

2.35%, 3/27/09(a)

      34,000,000
  30,000     

2.629%, 4/1/09, MTN(a)

      30,000,000
  150,000     

2.83%, 4/11/08(b)

      149,882,083
           
          337,882,083
           

 

See Notes to Financial Statements.

 

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Principal
Amount (000)		      Description    Value (Note 1)  
       
  Repurchase Agreement    0.4%  
$   10,518     

Barclays Capital, Inc.
2.75%, dated 3/31/08, due 4/1/08 in the amount of $10,518,803 (cost $10,518,000; the value of the collateral including accrued interest was $10,728,361)(e)

    $ 10,518,000  
             
    

Total Investments    101.1%
(amortized cost $2,587,931,268)(f)

      2,587,931,268  
    

Liabilities in excess of other assets    (1.1%)

      (27,666,997 )
             
    

Net Assets    100.0%

    $ 2,560,264,271  
             

 

The following annotations have been used in the Portfolio:

MTN—Medium Term Note.

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted 144A securities are deemed to be liquid.

(a) Variable rate instrument. The maturity date presented for these instruments is the later of the next date on which the security can be redeemed at par or the next date on which the rate of interest is adjusted.
(b) Rate quoted represents yield-to-maturity as of purchase date.
(c) Indicates a security that has been deemed illiquid.
(d) Private placement, restricted as to resale and does not have a readily available market. The aggregate cost of such securities is $40,000,000. The aggregate value of $40,000,000 is 1.6% of net assets.
(e) Repurchase agreements are collateralized by United States Treasury or federal agency obligations.
(f) The cost of securities for federal income tax purposes is substantially the same as for financial reporting purposes.

 

The industry classification of portfolio holdings and liabilities in excess of other assets shown as a percentage of net assets as of March 31, 2008 was as follows:

 

Commercial Banks

    30.1 %

Financial Services

    23.9  

Asset Backed Securities

    13.8  

U.S. Government Agency Obligations

    13.2  

Security Brokers & Dealers

    8.4  

Non-Captive Finance

    4.3  

Insurance

    2.9  

Agricultural Operations

    2.0  

Capital Goods

    1.6  

Conglomerate

    0.9  
      
   101.1  

Liabilities in excess of other assets

    (1.1 )
      

Net Assets

    100.0 %
      

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   11

Statement of Assets and Liabilities

 

as of March 31, 2008 (Unaudited)

 

Assets

       

Investments, at amortized cost which approximates market value

    $ 2,587,931,268

Cash

      493

Receivable for Fund shares sold

      57,874,057

Interest receivable

      6,728,046

Prepaid expenses

      43,178
      

Total assets

      2,652,577,042
      

Liabilities

       

Payable for Fund shares reacquired

      60,430,620

Payable for investments purchased

      30,000,000

Dividends payable

      1,762,718

Accrued expenses

      88,893

Management fee payable

      28,086

Deferred trustees’ fees

      2,145

Affiliated transfer agent fee payable

      309
      

Total liabilities

      92,312,771
      

Net Assets

    $ 2,560,264,271
      
        

Net assets were comprised of:

   

Shares of beneficial interest, at $.00001 par value

    $ 25,603

Paid-in capital, in excess of par

      2,560,238,668
      

Net assets, March 31, 2008

    $ 2,560,264,271
      

Net asset value, offering price and redemption price per share
($2,560,264,271 ÷ 2,560,264,271 shares of beneficial interest issued and outstanding)

      $1.00
      

 

See Notes to Financial Statements.

 

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Statement of Operations

 

Six Months Ended March 31, 2008 (Unaudited)

 

Net Investment Income

       

Income

   

Interest

    $ 56,704,703
      

Expenses

   

Management fee

      151,886

Custodian’s fees and expenses

      113,000

Reports to shareholders

      110,000

Trustees’ fees

      28,000

Legal fees and expenses

      15,000

Registration fees

      11,000

Transfer agent’s fees and expenses (including affiliated expense of $9,800)

      10,000

Audit fee

      9,000

Miscellaneous

      10,510
      

Total expenses

      458,396
      

Net investment income

      56,246,307
      

Realized Gain On Investments

       

Net realized gain on investment transactions

      14,321
      

Net Increase In Net Assets Resulting From Operations

    $ 56,260,628
      

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   13

Statement of Changes in Net Assets

 

(Unaudited)

 

     Six Months
Ended
March 31, 2008		        Year
Ended
September 30, 2007		  

Increase (Decrease) In Net Assets

                    

Operations

        

Net investment income

    $ 56,246,307        $ 119,525,726  

Net realized gain on investment transactions

      14,321          2,455  
                   

Net increase in net assets resulting from operations

      56,260,628          119,528,181  
                   

Dividends and distributions (Note 1)

      (56,260,628 )        (119,528,181 )
                   

Fund share transactions (at $1 per share)

        

Net proceeds from shares sold

      9,786,962,111          20,197,185,236  

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

      56,956,257          120,814,413  

Cost of shares reacquired

      (9,584,643,647 )        (20,138,260,671 )
                   

Net increase in net assets from Fund share transactions

      259,274,721          179,738,978  
                   

Total increase

      259,274,721          179,738,978  

Net Assets

                    

Beginning of period

      2,300,989,550          2,121,250,572  
                   

End of period

    $ 2,560,264,271        $ 2,300,989,550  
                   

 

See Notes to Financial Statements.

 

14   Visit our website at www.prudential.com

 

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 Liquid Assets Fund (the ”Fund”) is currently the only series of the Trust. Until November 2007, the Trust also had a second series, which has been liquidated. 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. When determining the fair valuation of securities some of the factors influencing the valuation include, the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

 

Cash Accumulation Trust/Liquid Assets Fund   15

Notes to Financial Statements

 

(Unaudited) continued

 

 

The Fund may hold up to 10% of its net assets in illiquid securities. The Fund held illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Such securities are valued pursuant to the valuation procedures noted above.

 

Repurchase Agreements: In connection with transactions in repurchase agreements with the 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 day, the value of the 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 Fund 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 the 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 the 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. 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.

 

16   Visit our website at www.prudential.com

 

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 compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

 

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, 2008 the management costs were .01% 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 Fund’s transfer agent. Transfer agent fees and expenses in the Statements of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

 

The Fund pays networking fees to affiliated and unaffiliated broker/dealers, including fees relating to the services of First Clearing LLC (“First Clearing”), an affiliate of PI. These networking fees are payments made to brokers/dealers that clear mutual fund transactions through a national clearing system. For the six months ended March 31, 2008, the Fund incurred approximately $400 in total networking fees, of which approximately $400 was paid to First Clearing. These amounts are included in transfer agent’s fees and expenses in the Statement of Operations.

 

Cash Accumulation Trust/Liquid Assets Fund   17

Notes to Financial Statements

 

(Unaudited) continued

 

 

Note 4. Tax Information

 

For federal income tax purposes, the Fund had a capital loss carryforward as of September 30, 2007, of approximately $8,500 of which $3,900 expires in 2014 and $4,600 expires in 2015. Accordingly, no capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such carryforwards.

 

Management has analyzed the Fund’s tax positions taken on the federal income tax returns for all open tax years and has concluded that as of March 31, 2008, no provision for income tax would be required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

 

Note 5. New Accounting Pronouncements

 

On September 20, 2006, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. At this time, management is evaluating the implications of FAS 157 and its impact, if any, in the financial statements has not yet been determined.

 

In addition, in March 2008, the FASB released Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements has not yet been determined.

 

18   Visit our website at www.prudential.com

 

Financial Highlights

 

(Unaudited)

 

MARCH 31, 2008   SEMIANNUAL REPORT

 

Cash Accumulation Trust/Liquid Assets Fund

Financial Highlights

 

 

      Six Months Ended
March 31, 2008		  

Per Share Operating Performance:

   

Net Asset Value, Beginning Of Period

    $ 1.00  
        

Net investment income and net realized gains

      .02  

Dividends and distributions to shareholders

      (.02 )
        

Net asset value, end of period

    $ 1.00  
        

Total Return(a):

      2.36 %

Ratios/Supplemental Data:

   

Net assets, end of period (000)

    $ 2,560,264  

Average net assets (000)

    $ 2,460,512  

Ratios to average net assets:

   

Expenses

      .04 %(b)

Net investment income

      4.57 %(b)

 

(a) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods less than a full year are not annualized.
(b) Annualized.

 

See Notes to Financial Statements.

 

20   Visit our website at www.prudential.com

Year Ended September 30,  
2007     2006     2005     2004     2003  
       
$ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00  
                                     
  .05       .05       .03       .01       .01  
  (.05 )     (.05 )     (.03 )     (.01 )     (.01 )
                                     
$ 1.00     $ 1.00     $ 1.00     $ 1.00     $ 1.00  
                                     
  5.48 %     4.77 %     2.67 %     1.00 %     1.14 %
       
$ 2,300,990     $ 2,121,251     $ 900,129     $ 472,927     $ 419,174  
$ 2,227,810     $ 1,493,619     $ 679,599     $ 427,578     $ 434,433  
       
  .03 %     .05 %     .13 %     .23 %     .28 %
  5.37 %     4.89 %     2.78 %     1.02 %     1.13 %

 

See Notes to Financial Statements.

 

Cash Accumulation Trust/Liquid Assets Fund   21

 

n MAIL   n TELEPHONE   n WEBSITE

Gateway Center Three

100 Mulberry Street

Newark, NJ 07102-4077

   (800) 225-1852   www.prudential.com

 

PROXY VOTING
The Board of Trustees of the Fund has delegated to the Fund’s investment subadviser 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 Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Commission’s website.

 

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

 

OFFICERS
Judy A. Rice, President • Robert F. Gunia, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • Kathryn L. Quirk, Chief Legal Officer • Deborah A. Docs, Secretary • Timothy J. Knierim, Chief Compliance Officer • Valerie M. Simpson, Deputy Chief Compliance Officer • Noreen M. Fierro, Anti-Money Laundering Compliance Officer • Jonathan D. Shain, Assistant Secretary • Claudia DiGiacomo, Assistant Secretary • John P. Schwartz, Assistant Secretary • Andrew R. French, Assistant Secretary • M. Sadiq Peshimam, Assistant Treasurer • Peter Parrella, Assistant Treasurer

 

MANAGER   Prudential Investments LLC    Gateway Center Three
100 Mulberry Street
Newark, NJ 07102

 

INVESTMENT SUBADVISER   Prudential Investment
Management, Inc.		    Gateway Center Two
100 Mulberry Street
Newark, NJ 07102

 

DISTRIBUTOR   Prudential Investment
Management Services LLC		    Gateway Center Three
100 Mulberry Street
Newark, NJ 07102

 

CUSTODIAN   The Bank of New York    One Wall Street
New York, NY 10286

 

TRANSFER AGENT   Prudential Mutual Fund
Services LLC		    PO Box 9658
Providence, RI 02940

 

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM		   KPMG LLP    345 Park Avenue
New York, NY 10154

 

FUND COUNSEL   Sullivan & Cromwell LLP    125 Broad Street
New York, NY 10004

 

An investor should consider the investment objectives, risks, 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.

 

E-DELIVERY
To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address.

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Cash Accumulation Trust/Liquid Assets Fund, Prudential Investments, Attn: Board of Trustees, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO SCHEDULE
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q under the Cash Accumulation Trust name. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling (800) SEC-0330 (732-0330). The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each fiscal quarter.

 

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-A148090    Ed. 05/2008

 

 

Item 2   –     Code of Ethics – Not required, as this is not an annual filing.
Item 3   –     Audit Committee Financial Expert – Not required, as this is not an annual filing.
Item 4   –     Principal Accountant Fees and Services – Not required, as this is not an 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   –     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 – Not applicable.
Item 11   –     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 has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.
Item 12   –     Exhibits
  (a )   (1) Code of Ethics – Not required, as this is not an annual filing.
    (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-      99.CERT.
    (3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.
  (b )   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-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) Cash Accumulation Trust                                                             

 

By (Signature and Title)*    /s/ Deborah A. Docs
       Deborah A. Docs
       Secretary

 

Date May 21, 2008                                                                                                          

 

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 21, 2008                                                                                                              

 

By (Signature and Title)*    /s/ Grace C. Torres
       Grace C. Torres
       Treasurer and Principal Financial Officer

 

Date May 21, 2008                                                                                                              

 

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