Filed electronically with the Securities and Exchange Commission
                               on January 20, 2009

                                                               File No. 33-11802
                                                               File No. 811-5002

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM N-1A


          REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933       |__|

                        Pre-Effective Amendment No.                     |__|
                       Post-Effective Amendment No. 70                  |x|
                                     and/or
                        REGISTRATION STATEMENT UNDER THE
                       INVESTMENT COMPANY ACT OF 1940                   |__|

                              Amendment No. 71                          |x|
                                            --


                             DWS Variable Series II
                             ----------------------
               (Exact Name of Registrant as Specified in Charter)

                       345 Park Avenue, New York, NY 10154
                       -----------------------------------
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's Telephone Number, including Area Code: (617) 295-1000
                                                           --------------
                      Caroline Pearson, Assistant Secretary
                             DWS VARIABLE SERIES II
                             ----------------------
                                One Beacon Street
                                Boston, MA 02108
                     (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):

|__|     Immediately upon filing pursuant to paragraph (b)
|x|      On January 20, 2009 pursuant to paragraph (b)
|__|     60 days after filing pursuant to paragraph (a)(1)
|__|     On _______________ pursuant to paragraph (a)(1)
|__|     75 days after filing pursuant to paragraph (a)(2)
|__|     On _______________ pursuant to paragraph (a)(2)
|__|     On _______________ pursuant to paragraph (a)(3) of Rule 485

         If appropriate, check the following box:

|__|     This post-effective amendment designates a new effective date for a
         previously filed post-effective amendment



                                       1
<PAGE>


                                EXPLANATORY NOTE
                                ----------------

This post-effective amendment contains the prospectuses and statements of
additional information relating to the classes of the following series of the
registrant:

o        DWS Alternative Asset Allocation Plus VIP - Class A


This post-effective amendment is not intended to update or amend any other
prospectuses or statements of additional information of the Fund's other series
or classes.



                                       2
<PAGE>



                               JANUARY 20, 2009






                                   PROSPECTUS



                            DWS VARIABLE SERIES II



                                    CLASS A


                   DWS ALTERNATIVE ASSET ALLOCATION PLUS VIP




This prospectus should be read in conjunction with the variable life insurance
or variable annuity contract prospectus and plan documents for tax-qualified
plans. These shares are available and are being marketed exclusively as a
pooled funding vehicle for life insurance companies writing all types of
variable life insurance policies and variable annuity contracts.


The Securities and Exchange Commission (SEC) does not approve or disapprove
these shares or determine whether the information in this prospectus is
truthful or complete. It is a criminal offense for anyone to inform you
otherwise.


                                                 RESHAPING INVESTING. [DWS Logo]
                                                             Deutsche Bank Group



<PAGE>

--------------------------------------------------------------------------------
TABLE OF CONTENTS

HOW THE PORTFOLIO WORKS

The portfolio is designed to serve as an investment option for certain variable
annuity contracts, variable life insurance policies and tax-qualified plans.
Your investment in the portfolio is made in conjunction with one of these
contracts or policies. The portfolio has its own investment objective and
strategy.

Remember that the portfolio is not a bank deposit. The portfolio is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Share prices will go up and down and you could lose money by
investing.

Please read this prospectus in conjunction with the prospectus for your
variable life insurance policy or variable annuity contract or plan documents
for tax-qualified plans.



HOW THE PORTFOLIO WORKS




<TABLE>
<S>      <C>
  3      DWS Alternative Asset Allocation Plus VIP
 10      The Portfolio's Performance History
 12      Financial Highlights
 14      Other Policies and Risks
 14      The Investment Advisor
</TABLE>



YOUR INVESTMENT IN THE PORTFOLIO




<TABLE>
<S>     <C>
17      Buying and Selling Shares
20      How the Portfolio Calculates Share Price
20      Distributions
20      Taxes
</TABLE>


<PAGE>

DWS ALTERNATIVE ASSET ALLOCATION PLUS VIP


THE PORTFOLIO'S MAIN INVESTMENT STRATEGY

The portfolio seeks capital appreciation. The portfolio seeks to achieve its
objective by investing in alternative (or non-traditional) asset categories and
investment strategies. The portfolio intends to allocate its assets among the
following strategies and/or asset categories: market neutral,
inflation-protection, floating rate securities, commodities, real estate,
infrastructure and emerging markets.

Investments may be made in other DWS funds or directly in the securities and
derivative investments in which such DWS funds could invest. The portfolio may
also invest in securities of exchange traded funds ("ETFs") when a particular
asset category or investment strategy is not available through a DWS fund. The
portfolio's allocations among direct investments and other DWS funds may vary
over time. At times, the entire portfolio may be invested in other DWS funds or
directly in other investments. The portfolio may also be invested in some
combination thereof. To the extent the portfolio directly invests in other
investments rather than DWS funds, the allocated portions of the portfolio will
be managed by the same advisor, subadvisor or sub-subadvisor, as applicable, as
the corresponding DWS fund, following the same general investment strategies.

The portfolio may make allocations ranging from approximately 0% to 30% of its
assets in a particular strategy or asset category. Based on the portfolio
managers' assessment of market conditions, the portfolio will be rebalanced
periodically to maintain the desired asset allocation among alternative asset
categories and investment strategies. The portfolio's allocations among the
asset categories and investment strategies will change over time and there
should be no expectation that current or past positions will be maintained in
the future. The portfolio intends to invest in the following DWS Funds or
directly in such securities and derivative investments in which such DWS Funds
can invest:



o DWS Commodity Securities Fund. The fund's investment objective is capital
  appreciation. The fund seeks to achieve its investment objective by focusing
  on commodities-related securities and equity-related securities, including
  commodities-related structured notes and similar instruments, that the
  fund's Advisor believes are undervalued but have favorable prospects for
  appreciation.


o DWS Disciplined Market Neutral Fund. The fund seeks capital appreciation
  independent of stock market direction. It pursues its objective by
  investing, under normal circumstances, in long and short positions of common
  stock of large US companies. The managers buy, or take, long positions in
  common stock that the managers believe are undervalued and sell, or take,
  short positions in common stock that the managers believe are overvalued.
  The fund's investment strategy is designed to maintain approximately equal
  dollar amounts invested in long and short positions under normal
  circumstances. By employing this market neutral strategy, the fund seeks to
  limit the fund's volatility relative to movements in the overall stock
  market (that is, the fund's price movements are not expected to correlate
  closely with the market's price movements). The managers attempt to achieve
  returns for the fund that exceed the return on an investment in 3-month US
  Treasury Bills.

o DWS Emerging Markets Equity Fund. The fund seeks long-term growth of capital.
  Under normal circumstances, the fund invests at least 80% of net assets,
  plus the amount of any borrowings for investment purposes, in emerging
  market equities (equities traded mainly in emerging markets or issued by
  companies that are organized in emerging markets or have more than half of
  their business in emerging markets). The fund invests primarily in common
  stocks. The fund considers "emerging markets" to include any country that is
  defined as an emerging or developing economy by any one of the following:
  The International Bank for Reconstruction and Development (i.e., the World
  Bank), the International Finance Corporation or the United Nations or its
  authorities.

DWS VARIABLE SERIES II - CLASS A SHARES       DWS ALTERNATIVE ASSET ALLOCATION
                                              PLUS VIP   3
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o DWS Emerging Markets Fixed Income Fund. The fund seeks to provide high
  current income and, secondarily, long-term capital appreciation. Under
  normal circumstances, the fund invests at least 80% of net assets, plus the
  amount of any borrowings for investment purposes, in high yield bonds (also
  known as "junk bonds") and other debt securities issued by governments and
  corporations in emerging market countries (i.e., the issuer's securities are
  traded mainly in an emerging market, the issuer is organized under the laws
  of an emerging market country or is a company with more than half of its
  business in emerging markets) or the return on which is derived primarily
  from emerging markets. The fund considers "emerging markets" to include any
  country that is defined as an emerging or developing economy by any one of
  the following: The International Bank for Reconstruction and Development
  (i.e., the World Bank), the International Finance Corporation or the United
  Nations or its authorities.

o DWS Floating Rate Plus Fund. The fund seeks to provide high current income.
  The fund invests, under normal market conditions, at least 80% of its total
  assets in adjustable rate loans that have a senior right to payment ("Senior
  Loans") and other floating rate debt securities. The fund may also borrow
  money in an amount up to 33 1-3% of the fund's total assets for a range of
  purposes, including to create investment leverage. In an attempt to enhance
  return, the fund also employs the iGAP strategy (discussed below).



o DWS Gold & Precious Metals Fund. The fund seeks maximum return (principal
  change and income). The fund invests at least 80% of net assets, plus the
  amount of any borrowings for investment purposes, in common stocks and other
  equities of US and foreign companies engaged in activities related to gold,
  silver, platinum or other precious metals, and in gold coin and bullion
  directly. These companies may be involved in activities such as exploration,
  mining, fabrication, processing and distribution.


o DWS Inflation Protected Plus Fund. The fund seeks to provide maximum
  inflation-adjusted return, consistent with preservation of capital. Under
  normal circumstances, the fund will invest at least 80% of its net assets,
  plus any borrowings for investment purposes, in inflation-indexed bonds of
  varying maturities issued by the US government, non-US governments, their
  agencies or instrumentalities, and corporations, and in derivatives related
  to these securities. The fund may invest the remaining portion of its assets
 in other types of fixed-income securities, cash or cash equivalents. In an
 attempt to enhance return, the fund also employs the iGAP strategy (discussed
 below).


o DWS RREEF Global Infrastructure Fund. The fund seeks total return from both
  capital appreciation and current income through investment in a global
  portfolio of securities of infrastructure-related companies. Under normal
  circumstances, the fund invests at least 80% of its net assets in the
  securities of US and non-US infrastructure-related companies. The fund
  considers a company to be an infrastructure-related company if at least 50%
  of its non-cash assets are infrastructure assets or 50% of its gross income
  or net profits are derived, directly or indirectly, from the ownership,
  management, construction, operation, utilization or financing of
  infrastructure assets. Under normal circumstances, the fund invests
  primarily in equity securities, though the fund may also invest in
  fixed-income securities without limitation.

o DWS RREEF Global Real Estate Securities Fund. The fund's investment objective
  is to seek total return through a combination of current income and
  long-term capital appreciation. The fund seeks to achieve this objective by
  investing primarily in publicly listed real estate investment trusts (REITs)
  and real estate operating companies on a global basis. Under normal
  circumstances, the fund will invest at least 80% of its net assets, plus the
  amount of any borrowing for investment purposes, in the equity securities of
  REITs and real estate operating companies listed on recognized stock
  exchanges around the world.

On an ongoing basis, the DWS funds in which the portfolio may invest will be
evaluated on their continued ability to deliver strong performance. To maintain
the investment integrity of the portfolio, alternate DWS funds may be added to
obtain exposure to new asset categories or strategies, to replace
underperforming DWS funds or to enhance returns. Alternatively, the portfolio
may invest in certain ETFs if the desired exposure is not available by
investing in DWS funds.

In addition to the portfolio's main investment strategy, the Advisor seeks to
enhance returns by employing a global tactical asset allocation overlay
strategy. This strategy, which the Advisor calls iGAP (integrated Global Alpha
Platform), attempts to take advantage of short- and medium-term mispricings
within global equity, bond and currency markets. The iGAP strategy is
implemented through the use of derivatives, which are contracts or other
instruments whose value is based on, for example, indices, currencies or
securities. The iGAP strategy primarily uses exchange-traded futures contracts
on global equities, bonds and currencies and over-the-counter



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                                                     CLASS A SHARES
<PAGE>


forward currency contracts, and is expected to have a low correlation with the
portfolio's securities holdings. The iGAP strategy, with respect to the
portfolio, will not be used until assets of the portfolio exceed $50 million;
however, the portfolio may have indirect exposure to the iGAP strategy through
other DWS funds.

While the portfolio and the DWS funds in which it invests may use derivatives
or similar instruments and techniques to hedge existing positions, derivatives
and currency transactions, when used by the portfolio as part of the iGAP
strategy, generally will be used to seek return and not be used for hedging
purposes. Certain DWS funds in which the portfolio invests may also use the
iGAP strategy.


SECURITIES LENDING. The portfolio may lend its investment securities, in an
amount up to 33 1/3% of its total assets, to approved institutional borrowers
who need to borrow securities in order to complete certain transactions.

Although major changes tend to be infrequent, the Board of Trustees could
change the portfolio's investment objective without seeking shareholder
approval.



OTHER INVESTMENTS


As a temporary defensive measure, the portfolio could shift up to 100% of its
assets into investments such as money market securities. This measure could
prevent losses, but, while engaged in a temporary defensive position, the
portfolio will not be pursuing its investment objective. However, the Advisor
may choose not to use this strategy for various reasons, even in very volatile
market conditions.




THE MAIN RISKS OF INVESTING IN THE PORTFOLIO

There are several risk factors that could hurt the portfolio's performance,
cause you to lose money or cause the portfolio's performance to trail that of
other investments.

The portfolio's allocations among the asset categories and investment
strategies will change over time, causing corresponding changes in the
portfolio's risk profile.

ASSET ALLOCATION RISK. Although asset allocation among different asset
categories and investment strategies generally reduces risk and exposure to any
one category or strategy, the risk remains that the Advisor may favor an asset
category or investment strategy that performs poorly relative to other asset
categories or investment strategies. To the extent that alternative asset
categories underperform the general stock market, the portfolio would perform
poorly relative to a portfolio invested primarily in the general stock market.


UNDERLYING FUND INVESTMENT RISK. The portfolio invests in underlying funds, so
the portfolio's investment performance is directly related to the performance
of the underlying funds. To the extent the particular underlying funds in which
the portfolio invests underperform their benchmarks and/or other funds
investing in the same asset class, the portfolio would perform poorly relative
to other asset allocation funds. In addition, the portfolio indirectly pays a
portion of the expenses incurred by the underlying funds. As the underlying
funds or the portfolio's allocations among the underlying funds change from
time to time, or to the extent that the expense ratios of the underlying funds
change, the weighted average operating expenses borne by the portfolio may
increase or decrease.




INVESTMENT RISKS OF THE PORTFOLIO AND THE UNDERLYING FUNDS


DWS Alternative Asset Allocation Plus VIP may be subject to the risks discussed
below either through its investment in the DWS funds or through its direct
investment in other securities. Therefore, in the sections below, the term
"portfolio" refers to DWS Alternative Asset Allocation Plus VIP and the
underlying funds.

STOCK MARKET RISK. The portfolio is affected by how the stock market performs.
To the extent the portfolio invests in a particular capitalization or market
sector, the portfolio's performance may be proportionately affected by that
segment's general performance. When stock prices fall, you should expect the
value of your investment to fall as well. Because a stock represents ownership
in its issuer, stock prices can be hurt by poor management, shrinking product
demand and other business risks. These factors may affect single companies as
well as groups of companies. In addition, movements in financial markets may
adversely affect a stock's price, regardless of how well the company performs.
The market as a whole may not favor the types of investments the portfolio
makes, which could affect the portfolio's ability to sell them at an attractive
price.



DWS VARIABLE SERIES II - CLASS A SHARES       DWS ALTERNATIVE ASSET ALLOCATION
                                              PLUS VIP   5
<PAGE>


SECURITY SELECTION RISK. A risk that pervades all investing is the risk that
the securities in the portfolio's portfolio may decline in value.

FOREIGN INVESTMENT RISK. Foreign investments involve certain special risks,
including:



o POLITICAL RISK. Some foreign governments have limited the outflow of profits
  to investors abroad, imposed restrictions on the exchange or export of
  foreign currency, extended diplomatic disputes to include trade and
  financial relations, seized foreign investments and imposed higher taxes.



o INFORMATION RISK. Companies based in foreign markets are usually not subject
  to accounting, auditing and financial reporting standards and practices as
  stringent as those in the US. Therefore, their financial reports may present
  an incomplete, untimely or misleading picture of a company, as compared to
  the financial reports required in the US.



o LIQUIDITY RISK. Investments that trade less frequently can be more difficult
  or more costly to buy, or to sell, than more liquid or active investments.
  This liquidity risk is a factor of the trading volume of a particular
  investment, as well as the size and liquidity of the entire local market. On
  the whole, foreign exchanges are smaller and less liquid than US exchanges.
  This can make buying and selling certain investments more difficult and
  costly. Relatively small transactions in some instances can have a
  disproportionately large effect on the price and supply of securities. In
  certain situations, it may become virtually impossible to sell an investment
  in an orderly fashion at a price that approaches portfolio management's
  estimate of its value. For the same reason, it may at times be difficult to
  value the portfolio's foreign investments.



o REGULATORY RISK. There is generally less government regulation of foreign
  markets, companies and securities dealers than in the US.



o CURRENCY RISK. The portfolio invests in securities denominated in foreign
  currencies. Changes in exchange rates between foreign currencies and the US
  dollar may affect the US dollar value of foreign securities or the income or
  gain received on these securities.



o LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be more limited
  than the legal remedies available in the US.



o TRADING PRACTICE RISK. Brokerage commissions and other fees are generally
  higher for foreign investments than for US investments. The procedures and
  rules governing foreign transactions and custody may also involve delays in
  payment, delivery or recovery of money or investments.



o TAXES. Foreign withholding and certain other taxes may reduce the amount of
  income available to distribute to shareholders of the portfolio. In
  addition, special US tax considerations may apply to the portfolio's foreign
  investments.

EMERGING MARKET RISK. All of the risks of investing in foreign securities are
increased in connection with investments in emerging markets securities. In
addition, profound social changes and business practices that depart from norms
in developed countries' economies have hindered the orderly growth of emerging
economies and their markets in the past and have caused instability. High
levels of debt tend to make emerging economies heavily reliant on foreign
capital and vulnerable to capital flight. Countries with emerging economies are
also more likely to experience high levels of inflation, deflation or currency
devaluation, which could also hurt their economies and securities markets. For
these and other reasons, investments in emerging markets are often considered
speculative.

Some governments exercise substantial influence over the private economic
sector and the social and political uncertainties that exist for many
developing countries is significant. In adverse social and political
circumstances, governments have been involved in policies of expropriation,
confiscatory taxation, nationalization, intervention in the securities markets
and trade settlement, and imposition of foreign investment restrictions and
exchange controls.

NON-DIVERSIFICATION RISK. This risk information applies to DWS Commodity
Securities Fund, DWS Gold & Precious Metals Fund, DWS RREEF Global
Infrastructure Fund and DWS RREEF Global Real Estate Securities Fund. The noted
DWS funds are classified as non-diversified under the Investment Company Act of
1940, as amended. This means that these DWS funds may invest in securities of
relatively few issuers. Thus, the performance of one or a small number of
portfolio holdings can affect overall performance more than if these DWS funds
invested in a larger number of issuers.



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PRICING RISK. At times, market conditions may make it difficult to value some
investments, and the portfolio may use certain valuation methodologies for some
of its investments, such as fair value pricing. Given the subjective nature of
such valuation methodologies, it is possible that the value determined for an
investment may be different than the value realized upon such investment's
sale. If the portfolio has valued its securities too highly, you may pay too
much for portfolio shares when you buy into the portfolio. If the portfolio has
underestimated the price of its securities, you may not receive the full market
value when you sell your portfolio shares.

COMMODITY RISK. The portfolio may invest in equity securities issued by
companies in commodity-related industries and other securities related to such
companies. Such investments are subject to the risks associated with
concentration in securities of issuers in commodity-related industries. The
stocks of companies in commodity-related industries may underperform the stock
market as a whole. The stock prices of companies in commodity-related
industries may also experience greater price volatility than other types of
common stocks. Securities issued by companies in commodity-related industries
are sensitive to changes in the prices of, and in supply and demand for,
commodities. The value of securities issued by companies in commodity-related
industries may be affected by changes in overall market movements, changes in
interest rates, or factors affecting a particular industry or commodity, such
as drought, floods, weather, livestock disease, changes in storage costs,
embargoes, tariffs, policies of commodity cartels and international economic,
political and regulatory developments. The Advisor's judgments about trends in
the prices of these securities and commodities may prove to be incorrect.

TAX RISK. This risk information applies to DWS Commodity Securities Fund. The
treatment of commodity-linked notes, futures and certain other derivative
instruments for purposes of the portfolio qualifying as a regulated investment
company ("RIC") under the Internal Revenue Code of 1986, as amended (the
"Code") is not certain. The portfolio has obtained private letter rulings from
the Internal Revenue Service ("IRS") confirming that the income and gain
arising from certain types of commodity-linked notes in which the portfolio
invests constitute "qualifying income" under the Code. Generally, if the
commodity-linked instruments in which the portfolio invests are not regarded as
producing qualifying income, the portfolio may fail to qualify as a RIC. If the
portfolio fails to qualify as a RIC, the portfolio will be subject to federal
income tax on its ordinary income and capital gains at regular corporate rates
(without a deduction for distributions to shareholders) which will reduce net
asset value per share. When distributed, that income would also be taxable to
shareholders who are subject to current federal income taxation with respect to
their investment in the portfolio as a dividend to the extent attributable to
the portfolio's earnings and profits. In addition, if DWS Alternative Asset
Allocation Plus VIP fails to qualify as a RIC, a separate account underlying a
variable life insurance or variable annuity contract that invests in shares of
the portfolio will be required to treat the portfolio (or if an underlying fund
fails to qualify as a RIC, the portfolio's investment in the underlying fund)
as a single investment for purposes of the diversification requirements of
section 817(h) of the Code. If a separate account fails to satisfy the
diversification requirements of Code section 817(h), income allocable to the
contracts associated with the separate account will be taxed currently for
federal income tax purposes to the holders of such contracts and income from
prior periods with respect to such contracts also could be taxable, most likely
in the year of the failure.

COUNTERPARTY RISK. The portfolio will be subject to credit risk of the
counterparty with respect to derivative contracts entered into by the portfolio
or held by special purpose or structured vehicles in which the portfolio
invests. If a counterparty becomes bankrupt or otherwise fails to perform its
obligations due to financial difficulties, the portfolio may experience
significant delays in obtaining any recovery in a bankruptcy or other
reorganization proceeding. The portfolio may obtain only a limited recovery or
may obtain no recovery in such circumstances.

INFLATION-INDEXED BOND RISK. Although inflation-indexed bonds are expected to
be protected from long-term inflationary trends, short-term increases in
inflation may lead to a decline in the portfolio's value. If interest rates
rise due to reasons other than inflation, the portfolio's investment in these
securities may not be protected to the extent that the increase is not
reflected in the bond's inflation measure. Moreover, if the portfolio purchases
inflation-indexed bonds offered by foreign issuers, the rate of inflation
measured by the foreign index may not be correlated to the rate of inflation in
the US. Such foreign investments would, in that case, not provide protection
against inflation in the US. There can be no assurance that the portfolio's
returns will match or exceed the real rate of inflation.

INTEREST RATE RISK. Generally, fixed income securities will decrease in value
when interest rates rise. The longer the duration of the portfolio's
securities, the more sensitive the portfolio will be to interest rate changes.
(As a general rule, a 1% rise in interest rates means a 1% fall in value for
every year of duration.) As interest rates



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                                              PLUS VIP   7
<PAGE>


decline, the issuers of securities held by the portfolio may prepay principal
earlier than scheduled, forcing the portfolio to reinvest in lower-yielding
securities and may reduce the portfolio's income. As interest rates increase,
slower than expected principal payments may extend the average life of fixed
income securities. This will have the effect of locking in a below-market
interest rate, thereby further reducing the value of such a security.

INDUSTRY RISK. While the portfolio does not concentrate in any industry, to the
extent that the portfolio has exposure to a given industry or sector, any
factors affecting that industry or sector could affect the value of portfolio
investments. For example, the real estate sector could be hurt by rising
interest rates or the commodities sector could be hurt by factors affecting a
particular industry or commodity such as drought, floods, weather or changes in
storage costs.

CREDIT RISK. The portfolio will be subject to the risk that the
creditworthiness of a bond's issuer may decline, causing the value of the bond
to decline. In addition, an issuer may not be able to make timely payments on
the interest and principal on the bonds it has issued. In some cases, bonds may
decline in credit quality or go into default.

DERIVATIVES RISK. Risks associated with derivatives include the risk that the
derivative is not well correlated with the security, index or currency to which
it relates; the risk that derivatives may result in losses or missed
opportunities; the risk that the portfolio will be unable to sell the
derivative because of an illiquid secondary market; the risk that a
counterparty is unwilling or unable to meet its obligation and the risk that
the derivative transaction could expose the portfolio to the effects of
leverage, which could increase the portfolio's exposure to the market and
magnify potential losses. There is no guarantee that derivatives, to the extent
employed, will have the intended effect, and their use could cause lower
returns or even losses to the portfolio. The use of derivatives by the
portfolio to hedge risk may reduce the opportunity for gain by offsetting the
positive effect of favorable price movements.

SENIOR LOANS RISK. Senior Loans may not be rated by a rating agency, registered
with the Securities and Exchange Commission or any state securities commission
or listed on any national securities exchange. The amount of public information
available with respect to Senior Loans may be less extensive than that
available for registered or exchange-listed securities. In evaluating the
creditworthiness of borrowers, the Advisor relies on its own evaluation of
borrowers; but will consider, and may rely in part on, analyses performed by
others. As a result, the portfolio is particularly dependent on the analytical
abilities of the Advisor. In addition, Senior Loans involve certain special
risks, including:



o CONFLICT OF INTEREST RISK. Affiliates of the Advisor may participate in the
  primary and secondary market for Senior Loans. Because of limitations
  imposed by applicable law, the presence of the Advisor's affiliates in the
  Senior Loan market may restrict the portfolio's ability to acquire some
  Senior Loans, affect the timing of such acquisition or affect the price at
  which a Senior Loan is acquired. The Advisor does not believe that this will
  materially affect the portfolio's ability to achieve its investment
  objectives. Also, because the Advisor may wish to invest in the publicly
  traded securities of a borrower, it may not have access to material
  non-public information regarding the borrower to which other lenders have
  access.



o CREDIT RISK. A portfolio purchasing Senior Loans faces the risk that the
  creditworthiness of the borrower may decline, causing the value of the loans
  to decline. In addition, a borrower may not be able to make timely payments
  on the interest and principal on the debt obligations it has outstanding.
  Any such non-payment could result in a reduction of income to the portfolio,
  a reduction in the value of the Senior Loan and a reduction in the
  portfolio's net asset value. There can be no assurance that the liquidation
  of any collateral securing a Senior Loan would satisfy the borrower's
  obligation in the event of non-payment of scheduled interest or principal
  payments, or that such collateral could be readily liquidated. In the event
  of bankruptcy of a borrower, the portfolio could experience delays or
  limitations with respect to its ability to realize the benefits of the
  collateral securing a Senior Loan. The portfolio may principally invest in
  below investment grade floating rate loans which are considered speculative
  because of the credit risk of their issuers. Such issuers may be more likely
  to default on payments of interest and principal in response to changes in
  economic conditions or circumstances.


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o INTEREST RATE RISK. The value of debt securities will change in response to
  interest rate changes. As interest rates decline, a Senior Loan in which the
  fund invests may be prepaid sooner than scheduled, forcing the portfolio to
  reinvest in lower-yielding securities. The value of Senior Loans with
  adjustable interest rates will fluctuate less in response to interest rate
  changes than will fixed-rate debt securities. This could result in less
  volatility than would be expected for a portfolio that invests primarily in
  fixed-rate debt securities. However, because floating rates on Senior Loans
  only reset periodically, changes in prevailing interest rates may cause a
  fluctuation in the portfolio's value. In addition, extreme increases in
  prevailing interest rates may cause an increase in Senior Loan defaults
  which may cause a decline in the portfolio's value. Finally, a decrease in
  interest rates could adversely affect the income earned by the portfolio
  from its Senior Loans.



o LIQUIDITY RISK. Liquidity risk is the risk that a security cannot be sold
  quickly at a price that reflects the portfolio's estimate of its value. No
  active trading market may exist for some Senior Loans and certain Senior
  Loans may be subject to restrictions on resale. The inability to dispose of
  Senior Loans in a timely fashion could result in losses to the portfolio.



o MARKET RISK. Deteriorating market conditions might cause a general weakness
  in the market that reduces the overall level of securities prices in that
  market. In addition, an increase in demand for floating rate loans may
  adversely affect the rate of interest payable on Senior Loans acquired by
  the portfolio, thus reducing portfolio returns. During periods of limited
  supply of Senior Loans, the portfolio's yield may be lower.



o PREPAYMENT RISK. If a Senior Loan in which the portfolio invests is paid off
  sooner than scheduled, and interest rates are falling, the portfolio may be
  forced to reinvest the payments at lower yields.

BORROWING/LEVERAGE RISK. Because the portfolio may borrow money for investment
purposes, commonly referred to as "leveraging," its exposure to fluctuations in
the prices of its assets will be increased as compared to its exposure if the
portfolio did not borrow. Borrowing activities by the portfolio will amplify
any increase or decrease in the net asset value of the portfolio. In addition,
the interest which the portfolio pays on borrowed money, together with the
additional costs of maintaining a borrowing facility, are additional costs
borne by the portfolio and could reduce or eliminate any net investment
profits. Unless profits on assets acquired with borrowed funds exceed the costs
of borrowing, the use of borrowing will diminish the investment performance of
the portfolio compared with what it would have been without borrowing. When the
portfolio borrows money it must comply with certain asset coverage
requirements, which at times may require the portfolio to dispose of some of
its portfolio holdings even though it may be disadvantageous to do so at that
time.

ETF RISK. An ETF is a fund that holds a portfolio of common stocks or bonds
designed to track the performance of a securities index or industry sector.
ETFs trade on a securities exchange and their shares may, at times, trade at a
premium or discount to their net asset value. In addition, an ETF may not
replicate exactly the performance of the index it seeks to track for a number
of reasons, including transaction costs incurred by the ETF. ETFs incur fees
and expenses, such as operating expenses, licensing fees, trustee fees and
marketing expenses, which are borne proportionately by ETF shareholders, such
as the portfolio. The portfolio will also incur brokerage costs when purchasing
and selling shares of ETFs.

iGAP RISK. The success of the iGAP strategy depends, in part, on the Advisor's
ability to analyze the correlation between various global markets and asset
classes. If the Advisor's correlation analysis proves to be incorrect, losses
to the portfolio may be significant and may substantially exceed the intended
level of market exposure for the iGAP strategy.

SMALL COMPANY CAPITALIZATION RISK. Small company stocks tend to experience
steeper price fluctuations than the stocks of larger companies. A shortage of
reliable information can also pose added risk to small company stocks.
Industry-wide reversals may have a greater impact on small companies, since
they lack the financial resources of larger companies. Small company stocks are
typically less liquid than large company stocks. Accordingly, it may be harder
to find buyers for small company shares.

IPO RISK. Securities purchased in initial public offerings (IPOs) may be very
volatile. The price of such securities may rise and fall rapidly, often based,
among other reasons, on investor perceptions rather than economic reasons.
Additionally, investments in IPOs may magnify the portfolio's performance if it
has a small asset base. The portfolio is less likely to experience a similar
impact on its performance as its assets grow because it is unlikely that the
portfolio will obtain proportionately larger IPO allocations.



DWS VARIABLE SERIES II - CLASS A SHARES       DWS ALTERNATIVE ASSET ALLOCATION
                                              PLUS VIP   9
<PAGE>

SHORT SALE RISK. Short sales involve the risk that the portfolio will incur a
loss by subsequently buying a security at a higher price than the price at
which the portfolio previously sold the security short. Any loss will be
increased by the amount of compensation, interest or dividends and transaction
costs the portfolio must pay to a lender of the security. In addition, because
a loss incurred by the portfolio on a short sale stems from increases in the
value of the security sold short, the extent of such loss, like the price of
the security sold short, is theoretically unlimited. By contrast, a loss
incurred by the portfolio on a long position arises from decreases in the value
of the security held by the portfolio and therefore is limited by the fact that
a security's value cannot drop below zero.

The portfolio may not always be able to close out a short position at a
particular time or at an acceptable price. A lender may request that borrowed
securities be returned to it on short notice, and the portfolio may have to buy
the borrowed securities at an unfavorable price. If this occurs at a time that
other short sellers of the same security also want to close out their
positions, it is more likely that the portfolio will have to cover its short
sale at an unfavorable price and potentially reduce or eliminate any gain, or
cause a loss, as a result of the short sale.


The use of short sales - in effect, leveraging the portfolio - could increase
the exposure of the portfolio to the market, increase losses and increase the
volatility of returns.

SECURITIES LENDING RISK. Any loss in the market price of securities loaned by
the portfolio that occurs during the term of the loan would be borne by the
portfolio and would adversely affect the portfolio's performance. Also, there
may be delays in recovery of securities loaned or even a loss of rights in the
collateral should the borrower of the securities fail financially while the
loan is outstanding. However, loans will be made only to borrowers selected by
the portfolio's delegate after a review of relevant facts and circumstances,
including the creditworthiness of the borrower.




THE PORTFOLIO'S PERFORMANCE HISTORY

Since the portfolio is newly offered, past performance information is not
available.

10   DWS ALTERNATIVE ASSET ALLOCATION PLUS VIP       DWS VARIABLE SERIES II -
                                                     CLASS A SHARES
<PAGE>

HOW MUCH INVESTORS PAY


This table describes the fees and expenses that you may pay if you buy and hold
portfolio shares. The portfolio's shareholders directly bear the fees and
expenses of the portfolio, subject to the Advisor's contractual obligations to
waive fees or reimburse expenses to maintain the portfolio's operating expenses
at a specified level (see "Net Annual Fund and Acquired Funds (Underlying
Funds) Operating Expenses" in the table below). The portfolio will indirectly
bear its proportionate share of fees and expenses incurred by the other DWS
funds and exchange-traded funds in which the portfolio is invested (see
"Acquired Funds (Underlying Funds) Fees and Expenses") in the table below). The
information in the table does not reflect charges and fees associated with the
separate account that invests in the portfolio or any variable life insurance
policy or variable annuity contract for which the portfolio is an investment
option. These charges and fees will increase expenses.





<TABLE>
<CAPTION>
FEE TABLE                                                      CLASS A
<S>                                                          <C>
ANNUAL OPERATING EXPENSES, deducted from portfolio assets
Management Fee 1                                                 0.20%
Distribution/Service (12b-1) Fee                                  N/A
Acquired Funds (Underlying Funds) Fees and Expenses 2,3          1.35
Other Expenses 4                                                 0.33
TOTAL ANNUAL OPERATING EXPENSES                                  1.88
Less Expense Waiver/Reimbursement                                0.32
NET ANNUAL FUND AND ACQUIRED FUNDS (UNDERLYING FUNDS)
OPERATING EXPENSES 5                                             1.56
</TABLE>



1   Management fee has two components: (i) a fee on assets invested in other
    DWS funds; and (ii) a fee on assets not invested in other DWS funds
    ("Other Assets"). The Advisor currently intends to invest substantially
    all the assets of the portfolio in other DWS funds. However, in the
    future, the portfolio may invest a larger portion, or all, of its assets
    in Other Assets. If the portfolio's assets are entirely invested in Other
    Assets, the management fee would be 1.20% of average daily net assets.
    However, in such a situation, the Acquired Fund (Underlying Fund) Fees and
    Expense are expected to decrease. The Advisor will waive 0.15% of the
    management fee until the portfolio reaches $50 million in assets and the
    iGAP strategy is implemented.


2   The portfolio's shareholders bear indirectly the expenses of the shares of
    other DWS funds or ETFs in which the portfolio invests. Acquired Fund
    (Underlying Fund) Fees and Expenses for the initial fiscal year are based
    on the expected initial allocation of the portfolio's assets. The Total
    Annual Operating Expenses will vary with changes in allocations to, and
    operating expenses of, the other DWS funds or ETFs in which the portfolio
    invests.


3   "Acquired Funds (Underlying Funds) Fees and Expenses" includes the impact
    of dividends on short sales for investments in DWS Market Neutral Fund.
    "Acquired Funds (Underlying Funds) Fees and Expenses" would be 1.20%
    excluding these dividends on short sales and the "Total Annual Operating
    Expenses" would be 1.73%, without these dividends on short sales.

4   "Other Expenses" are based on estimated amounts for the current fiscal
    year, including 0.05% organizational and offering expenses expected to be
    incurred over the next twelve months only. Actual expenses may be
    different. Includes a 0.10% administrative services fee paid to the
    Advisor.

5   Through April 30, 2010, the Advisor has contractually agreed to waive all
    or a portion of its management fee and reimburse or pay operating expenses
    to the extent necessary to maintain "Total Annual Operating Expenses" at
    0.21%, excluding certain expenses such as extraordinary expenses, taxes,
    brokerage, interest, and acquired funds (underlying funds) fees and
    expenses (estimated at 1.35%).


Based on the costs above (including one year of capped expenses in each
period), this example helps you compare the expenses of Class A shares to those
of other mutual funds. This example assumes the expenses above remain the same.
It also assumes that you invested $10,000, earned 5% annual returns, reinvested
all dividends and distributions and sold your shares at the end of each period.
This is only an example; actual expenses will be different.





<TABLE>
<CAPTION>
EXAMPLE                1 YEAR        3 YEARS
<S>                   <C>           <C>
Class A shares          $159           $549
</TABLE>



DWS VARIABLE SERIES II - CLASS A SHARES           THE PORTFOLIO'S PERFORMANCE
                                                  HISTORY   11
<PAGE>


THE PORTFOLIO MANAGERS


The portfolio is managed by a team of investment professionals who collaborate
to develop and implement the portfolio's investment strategy. Each portfolio
manager has authority over all aspects of the portfolio's investment portfolio,
including, but not limited to, purchases and sales of securities, portfolio
construction techniques, portfolio risk assessment, and the management of daily
cash flows in accordance with portfolio holdings.

The following people handle the day-to-day management of the portfolio.

Robert Wang
Managing Director of Deutsche Asset Management and Portfolio Manager of the
portfolio.
   o Joined Deutsche Asset Management in 1995 as portfolio manager for asset
     allocation after 13 years of experience of trading fixed income, foreign
     exchange and derivative products at J.P. Morgan.
   o Global Head of Quantitative Strategies Portfolio Management: New York.
   o Joined the portfolio in 2008.
   o BS, The Wharton School, University of Pennsylvania.

Inna Okounkova
Director of Deutsche Asset Management and Portfolio Manager of the portfolio.
   o Joined Deutsche Asset Management in 1999 as a quantitative analyst,
     becoming an associate Portfolio Manager in 2001.
   o Global Asset Allocation Portfolio Manager: New York.
   o Joined the portfolio in 2008.
   o BS, MS, Moscow State University; MBA, University of Chicago.

Thomas Picciochi
Director of Deutsche Asset Management and Portfolio Manager of the portfolio.
   o Joined Deutsche Asset Management in 1999, formerly serving as portfolio
     manager for Absolute Return Strategies, after 13 years of experience in
     various research and analysis positions at State Street Global Advisors,
     FPL Energy, Barnett Bank, Trade Finance Corporation and Reserve Financial
     Management.
   o Global Asset Allocation Portfolio Manager: New York.
   o Joined the portfolio in 2008.

   o BA and MBA, University of Miami.


The portfolio's Statement of Additional Information provides additional
information about a portfolio manager's investments in the portfolio, a
description of the portfolio management compensation structure, and information
regarding other accounts managed.



FINANCIAL HIGHLIGHTS

Since the portfolio is newly offered, financial highlights information is not
available.

12   THE PORTFOLIO'S PERFORMANCE HISTORY             DWS VARIABLE SERIES II -
                                                     CLASS A SHARES
<PAGE>

HYPOTHETICAL EXPENSE SUMMARY


Using the annual portfolio operating expense ratios presented in the fee tables
in the portfolio prospectus, the Hypothetical Expense Summary shows the
estimated fees and expenses, in actual dollars, that would be charged on a
hypothetical investment of $10,000 in the portfolio held for the next 10 years
and the impact of such fees and expenses on portfolio returns for each year and
cumulatively, assuming a 5% return for each year. The historical rate of return
for the portfolio may be higher or lower than 5% and, for money funds, is
typically less than 5%. The tables also assume that all dividends and
distributions are reinvested. The annual portfolio expense ratios shown are net
of any contractual fee waivers or expense reimbursements, if any, for the
period of the contractual commitment. Also, please note that if you are
investing through a third party provider, that provider may have fees and
expenses separate from those of the portfolio that are not reflected here.
Mutual fund fees and expenses fluctuate over time and actual expenses may be
higher or lower than those shown.


The Hypothetical Expense Summary should not be used or construed as an offer to
sell, a solicitation of an offer to buy or a recommendation or endorsement of
any specific mutual fund. You should carefully review the portfolio's
prospectus to consider the investment objectives, risks, expenses and charges
of the portfolio prior to investing.



DWS ALTERNATIVE ASSET ALLOCATION PLUS VIP - CLASS A




<TABLE>
<CAPTION>
                MAXIMUM                  INITIAL HYPOTHETICAL                          ASSUMED RATE
             SALES CHARGE:                   INVESTMENT:                                OF RETURN:
                 0.00%                         $10,000                                      5%
               CUMULATIVE                                CUMULATIVE           HYPOTHETICAL
             RETURN BEFORE                              RETURN AFTER        YEAR-END BALANCE          ANNUAL
                FEES AND            ANNUAL FUND           FEES AND           AFTER FEES AND          FEES AND
YEAR            EXPENSES          EXPENSE RATIOS          EXPENSES              EXPENSES             EXPENSES
<S>         <C>                  <C>                   <C>                 <C>                     <C>
   1              5.00%                 1.56%                3.44%            $ 10,344.00          $   158.68
   2             10.25%                 1.83%                6.72%            $ 10,671.90          $   192.30
   3             15.76%                 1.83%               10.10%            $ 11,010.20          $   198.39
   4             21.55%                 1.83%               13.59%            $ 11,359.23          $   204.68
   5             27.63%                 1.83%               17.19%            $ 11,719.32          $   211.17
   6             34.01%                 1.83%               20.91%            $ 12,090.82          $   217.86
   7             40.71%                 1.83%               24.74%            $ 12,474.10          $   224.77
   8             47.75%                 1.83%               28.70%            $ 12,869.53          $   231.89
   9             55.13%                 1.83%               32.77%            $ 13,277.49          $   239.25
  10             62.89%                 1.83%               36.98%            $ 13,698.39          $   246.83
TOTAL                                                                                              $ 2,125.82
</TABLE>



DWS VARIABLE SERIES II - CLASS A SHARES                      FINANCIAL
                                                             HIGHLIGHTS   13
<PAGE>

OTHER POLICIES AND RISKS

While the previous pages describe the main points of the portfolio's strategy
and risks, there are a few other issues to know about:

o The portfolio may trade securities actively. This could raise transaction
  costs and, accordingly, lower performance.


o The Advisor will establish a debt security's credit quality when it buys a
  security, using independent ratings, or for unrated securities, its own
  credit determination. When ratings don't agree, the portfolio will use the
  higher rating. If a debt security's credit quality falls, the Advisor or
  subadvisor will determine whether selling it would be in the portfolio's
  best interest.



FOR MORE INFORMATION

This prospectus doesn't tell you about every policy or risk of investing in the
portfolio.

If you want more information on the portfolio's allowable securities and
investment practices and the characteristics and risks of each one, you may
want to request a copy of the Statement of Additional Information (the back
cover tells you how to do this).

Keep in mind that there is no assurance that the portfolio will achieve its
objective.

A complete list of the portfolio's portfolio holdings as of the month-end is
posted on www.dws-investments.com on or about the 15th day of the following

month. More frequent posting of portfolio holdings information may be made from
time to time on www.dws-investments.com. The posted portfolio holdings
information is available by portfolio and generally remains accessible at least
until the date on which the portfolio files its Form N-CSR or N-Q with the
Securities and Exchange Commission for the period that includes the date as of
which the posted information is current. The portfolio's Statement of
Additional Information includes a description of the portfolio's policies and
procedures with respect to the disclosure of the portfolio's portfolio
holdings.




THE INVESTMENT ADVISOR

Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), is the
investment advisor for the portfolio. Under the supervision of the Board
Members, the Advisor, with headquarters at 345 Park Avenue, New York, NY 10154
makes portfolio investment decisions, buys and sells securities for the
portfolio and conducts research that leads to these purchase and sale
decisions. The Advisor provides a full range of global investment advisory
services to institutional and retail clients.

DWS Scudder is part of Deutsche Asset Management, which is the marketing name
in the US for the asset management activities of Deutsche Bank AG, DIMA,
Deutsche Bank Trust Company Americas and DWS Trust Company.

Deutsche Asset Management is a global asset management organization that offers
a wide range of investing expertise and resources, including hundreds of
portfolio managers and analysts and an office network that reaches the world's
major investment centers. This well-resourced global investment platform brings
together a wide variety of experience and investment insight across industries,
regions, asset classes and investing styles.

The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
funds, retail, private and commercial banking, investment banking and
insurance.

MANAGEMENT FEE. The Advisor will receive a management fee from the portfolio.
Below is the fee rate to be paid by the portfolio, which is based upon the
portfolio's average daily net assets:


The portfolio pays the Advisor under the investment management agreement a fee,
calculated daily and paid monthly, in the sum of: (i) 0.20% of the portfolio's
average daily net assets invested in other DWS funds; and (ii) 1.20% of the
portfolio's average daily net assets invested in all other assets not
considered other DWS funds. For purposes of the management fee, "other DWS
funds" means US-registered investment companies with the Advisor serving as
investment advisor. The Advisor and its affiliates earn fees at varying rates
for providing



14   OTHER POLICIES AND RISKS                        DWS VARIABLE SERIES II -
                                                     CLASS A SHARES
<PAGE>

services to the underlying DWS funds. The Advisor may therefore have a conflict
of interest in selecting the underlying DWS funds and in determining whether to
invest in an ETF, from which it will not receive any fees. However, the Advisor
is a fiduciary to the portfolio and will select investments that it believes
are best suited to meet the portfolio's investment objective.


The portfolio's shareholder report for the annual period ended December 31 will
contain a discussion regarding the basis for the Board's approval of the
portfolio's investment management agreement and subadvisory agreements (see
"Shareholder reports" on the back cover).


In addition, under a separate administrative services agreement between the
portfolio and Deutsche Investment Management Americas Inc., the portfolio pays
the Advisor for providing most of the portfolio's administrative services.




SUBADVISORS AND SUB-SUBADVISORS FOR DWS ALTERNATIVE ASSET ALLOCATION PLUS VIP

RREEF America L.L.C. ("RREEF"), an investment advisor registered with the SEC,
is located at 875 N. Michigan Avenue, Chicago, Illinois 60611. RREEF is an
indirect wholly owned subsidiary of Deutsched Bank AG. RREEF has provided real
estate investment management services to institutional investors since 1975
across a diversified portfolio of industrial properties, office buildings,
residential apartments and shopping centers. RREEF has also been an investment
advisor of real estate securities since 1993.

Deutsche Investments Australia Limited ("DIAL"), is located at Level 16, 126
Phillip Street, Sydney NSW 200, Australia. DIAL is an indirect wholly owned
subsidiary of Deutsche Bank AG. DIAL serves as both subadvisor for mutual funds
and investment advisor for certain institutional accounts.

RREEF Global Advisers Limited ("RGAL"), is located at Winchester House, 1 Great
Winchester Street, Londin, United Kingdom, EC2N 2DB. RGAL is an indirect wholly
owned subsidiary of Deutsche Bank AG.

Deutsche Asset Management (Hong Kong) Limited ("DeAM Hong Kong"), is located at
48/F Cheung Kong Center, 2 Queen's Road Central, Hong Kong, China. DeAM Hong
Kong is an indirect wholly owned subsidiary of Deutsche Bank AG.

The subadvisors and sub-subadvisors provide investment advisory and management
services to the portions of DWS Alternative Asset Allocation Plus VIP's
portfolio alloated to direct investments in global real estate, global
infrastructure and gold and precious metals securities (as described below).
Each subadvisor and sub-subadvisor makes investment decisions, buy and sells
securities for the portfolio and conducts research that leads to purchase and
sale decisons. The Advisor pays a fee to each subadvisor pursuant to an
investment subadvisory agreement between the Advisor and the subadvisor. The
sub-subadvisors are paid for their sub-subadvisory services by the subadvisor,
from the subadvisor's subadvisory fee paid by the Advisor to the subadvisor.

RREEF provides subadvisory services in connection with direct investments in
global real estate and global infrastructure securities. With respect to global
real estate and global infrastructure securities, RGAL provides sub-subadvisory
services related to European securities, DeAM Hong Kong provides
sub-subadvisory services related to Asian securities and DIAL provides
sub-subadvisory services related to Australian securities.

DIAL provides subadvisory services in connection with direct investments in
gold and precious metals securities.



DWS VARIABLE SERIES II - CLASS A SHARES                    THE INVESTMENT
                                                           ADVISOR   15
<PAGE>

--------------------------------------------------------------------------------
YOUR INVESTMENT IN THE PORTFOLIO

The information in this section may affect anyone who selects the portfolio as
an investment option in a variable annuity contract or variable life insurance
policy that offers the portfolio. These contracts and policies are described in
separate prospectuses issued by participating insurance companies. The
portfolio assumes no responsibility for such prospectuses.


POLICIES ABOUT TRANSACTIONS

The information in this prospectus applies to Class A shares of the portfolio.
The portfolio offers one classes of shares. Class A shares are offered at net
asset value and are not subject to 12b-1 fees.


Technically, the shareholders of DWS Variable Series II (which include the
portfolio just described) are the participating insurance companies (the
"insurance companies") that offer the portfolio as choices for holders of
certain variable annuity contracts or variable life insurance policies (the
"contract(s)") issued or sponsored by the insurance companies. The insurance
companies effectively pass through the ownership of portfolio shares to their
contract owners and some may pass through voting rights as well. The portfolio
does not sell shares directly to the public. The portfolio sells shares only to
separate accounts of insurance companies. As a contract owner, your premium
payments are allocated to the portfolio by the insurance companies in
accordance with your contract. Please see the contract prospectus that
accompanies this prospectus for a detailed explanation of your contract.


Please bear in mind that there are important differences between funds
available to any investor (a "Retail Fund") and those that are only available
through certain financial institutions, such as insurance companies. For
example, Retail Funds, unlike the portfolio, are not sold to insurance company
separate accounts to fund investments in variable insurance contracts. In
addition, the investment objective, policies and strategies of the portfolio,
while similar to those of a Retail Fund, are not identical. Retail Funds may be
smaller or larger than the portfolio and have different expense ratios than the
portfolio. As a result, the performance of the portfolio and a Retail Fund will
differ.


Should any conflict between contract owners arise that would require that a
substantial amount of net assets be withdrawn from the portfolio, orderly
portfolio management could be disrupted to the potential detriment of contract
owners of the portfolio.

The portfolio has a verification process for new insurance company accounts to
help the government fight the funding of terrorism and money laundering
activities. Federal law requires all financial institutions to obtain, verify
and record information that identifies each insurance company that opens an
account. This means that when an insurance company opens an account, the
portfolio will ask for its name, address and other information that will allow
the portfolio to identify the company. This information will be verified to
ensure the identity of all insurance companies opening an account.


For certain insurance companies, the portfolio might request additional
information (for instance, the portfolio would ask for documents such as the
insurance company's articles of incorporation) to help the portfolio verify the
insurance company's identity.


The portfolio will not complete the purchase of any shares for an account until
all information has been provided and the application has been submitted in
"good order." Once the application is determined to be in good order, the
purchase(s) will be effected at the net asset value per share next calculated.

The portfolio may reject a new account application if the insurance company
doesn't provide any required or requested identifying information, or for other
reasons.


16   YOUR INVESTMENT IN THE PORTFOLIO                DWS VARIABLE SERIES II -
                                                     CLASS A SHARES
<PAGE>

BUYING AND SELLING SHARES

The PORTFOLIO IS OPEN FOR BUSINESS each day the New York Stock Exchange is
open. The portfolio calculates its share price every business day, as of the
close of regular trading on the New York Stock Exchange (typically 4 p.m.
Eastern time, but sometimes earlier, as in the case of scheduled half-day
trading or unscheduled suspensions of trading).

The portfolio continuously sells shares to each insurance company separate
account, without a sales charge, at the net asset value per share next
determined after a proper purchase order is placed by the insurance company.
The insurance company offers contract owners units in its separate accounts
which correspond to shares in a portfolio. Each insurance company submits
purchase and redemption orders to a portfolio based on allocation instructions
for premium payments, transfer instructions and surrender or partial withdrawal
requests for contract owners, as set forth in the accompanying prospectus for
the contracts. These orders reflect the amount of premium payments to be
invested, surrender and transfer requests, and other matters. Redemption orders
are effected at the next net asset value per share determined after a proper
redemption order is placed by the insurance company. Contract owners should
look at their contract prospectuses for redemption procedures and fees.


IMPORTANT INFORMATION ABOUT BUYING AND SELLING SHARES

o After receiving a contract owner's order, the insurance company buys or sells
  shares at the net asset value next calculated on any day the portfolio is
  open for business.

o Unless otherwise instructed, the portfolio normally makes payment of the
  proceeds from the sale of shares the next business day but always within
  seven calendar days.

o The portfolio does not issue share certificates.

o The portfolio reserves the right to reject purchases of shares for any
  reason.

o The portfolio reserves the right to withdraw or suspend the offering of
  shares at any time.

o The portfolio reserves the right to reject purchases of shares or to suspend
  or postpone redemptions at times when the New York Stock Exchange is closed
  (other than customary closings), trading is restricted or when an emergency
  exists that prevents a portfolio from disposing of its portfolio securities
  or pricing its shares.

o The portfolio may refuse, cancel or rescind any purchase order; freeze any
  account (meaning the insurance company will not be able to purchase shares
  in its account); suspend account services; and/or involuntarily redeem the
  account if we think that the account is being used for fraudulent or illegal
  purposes by the insurance company; one or more of these actions will be
  taken when, at the sole discretion of the portfolio, they are deemed to be
  in the portfolio's best interest or when the portfolio is requested or
  compelled to do so by governmental authority or by applicable law.

o The portfolio may close and liquidate an account if a portfolio is unable to
  verify provided information, or for other reasons; if a portfolio decides to
  close the account, the shares will be redeemed at the net asset value per
  share next calculated after we determine to close the account; the insurance
  company may be subject to gain or loss on the redemption of the portfolio
  shares and may incur tax liability.

o The portfolio may pay you for shares you sell by "redeeming in kind," that
  is, by giving you marketable securities (which typically will involve
  brokerage costs for you to liquidate) rather than cash, but which will be
  taxable to the same extent as a redemption for cash; the portfolio generally
  won't make a redemption in kind unless your requests over a 90-day period
  total more than $250,000 or 1% of the value of the portfolio's net assets,
  whichever is less.

o A purchase order from an insurance company separate account may not be
  accepted if the sale of portfolio shares has been suspended or if it is
  determined that the purchase would be detrimental to the interests of a
  portfolio's shareholders.


MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive trading of
portfolio shares may present risks to the portfolio's long-term shareholders
(as used herein, the term "shareholders" may refer to the contract owners),
including potential dilution in the value of portfolio shares, interference
with the efficient management of a portfolio (including losses on the sale of
investments), taxable gains to remaining shareholders and increased brokerage
and administrative costs. These risks may be more pronounced if the



DWS VARIABLE SERIES II - CLASS A SHARES              YOUR INVESTMENT IN THE
                                                     PORTFOLIO   17
<PAGE>


portfolio invests in certain securities such as those that trade in foreign
markets, are illiquid or do not otherwise have "readily available market
quotations." Certain investors may seek to employ short-term trading strategies
aimed at exploiting variations in portfolio valuation that arise from the
nature of the securities held by the portfolio (e.g., "time zone arbitrage").
The portfolio has adopted policies and procedures that are intended to detect
and deter short-term and excessive trading.

Pursuant to these policies, the portfolio reserves the right to reject or
cancel a purchase or exchange order for any reason without prior notice. For
example, the portfolio may in its discretion reject or cancel a purchase or an
exchange order even if the transaction is not subject to the specific roundtrip
transaction limitation described below if the Advisor believes that there
appears to be a pattern of short-term or excessive trading activity by a
shareholder or deems any other trading activity harmful or disruptive to the
portfolio. The portfolio, through its Advisor and transfer agent, will measure
short-term and excessive trading by the number of roundtrip transactions within
a shareholder's account during a rolling 12-month period. A "roundtrip"
transaction is defined as any combination of purchase and redemption activity
(including exchanges) of the same portfolio's shares. The portfolio may take
other trading activity into account if the portfolio believes such activity is
of an amount or frequency that may be harmful to long-term shareholders or
disruptive to portfolio management.


Shareholders are limited to four roundtrip transactions in the same portfolio
over a rolling 12-month period. Shareholders with four or more roundtrip
transactions in the same portfolio within a rolling 12-month period generally
will be blocked from making additional purchases of, or exchanges into, that
portfolio. The portfolio has sole discretion whether to remove a block from a
shareholder's account. The rights of a shareholder to redeem shares of the
portfolio are not affected by the four roundtrip transaction limitation.

The Advisor may make exceptions to the roundtrip transaction policy for certain
types of transactions if in its opinion the transactions do not represent
short-term or excessive trading or are not abusive or harmful to the portfolio,
such as, but not limited to, systematic transactions, required minimum
retirement distributions, transactions initiated by the portfolio or
administrator and transactions by certain qualified fund-of-fund(s).

In certain circumstances, the portfolio may rely upon the policy of the
insurance company or other financial intermediary to deter short-term or
excessive trading if the Advisor believes that the policy of such insurance
company or other financial intermediary is reasonably designed to detect and
deter transactions that are not in the best interest of the portfolio. An
insurance company's or other financial intermediary's policy relating to
short-term or excessive trading may be more or less restrictive than the
portfolio's policies, may permit certain transactions not permitted by the
portfolio's policies, or prohibit transactions not subject to the portfolio's
policies.

The Advisor may also accept undertakings from an insurance company or other
financial intermediary to enforce short-term or excessive trading policies on
behalf of the portfolio that provide a substantially similar level of
protection for the portfolio against such transactions. For example, certain
insurance companies may have contractual or legal restrictions, or operational
constraints, that prevent them from blocking an account. In such instances, the
Advisor may permit the insurance company to use alternate techniques that the
Advisor considers to be a reasonable substitute for such a block.

In addition, to the extent that the portfolio invests some portion of its
assets in foreign securities, the portfolio has adopted certain fair valuation
practices intended to protect the portfolio from "time zone arbitrage" with
respect to its foreign securities holdings and other trading practices that
seek to exploit variations in portfolio valuation that arise from the nature of
the securities held by the portfolio. (See "How the Portfolio Calculates Share
Price.")

There is no assurance that these policies and procedures will be effective in
limiting short-term and excessive trading in all cases. For example, the
Advisor may not be able to effectively monitor, detect or limit short-term or
excessive trading by underlying contract holders that occurs through separate
accounts maintained by insurance companies or other financial intermediaries.
The Advisor reviews trading activity at the separate account level to detect
short-term or excessive trading. If the Advisor has reason to suspect that
short-term or excessive trading is occurring at the separate account level, the
Advisor will contact the insurance company or other financial intermediary to
request underlying shareholder level activity. Depending on the amount of
portfolio shares held in such separate account (which may represent most of the
portfolio's shares), short-term and/or excessive trading of portfolio shares
could adversely affect long-term shareholders in the portfolio. If short-term
or excessive trading is identified, the Advisor will take appropriate action.

The portfolio's market timing policies and procedures may be modified or
terminated at any time.

18   YOUR INVESTMENT IN THE PORTFOLIO                DWS VARIABLE SERIES II -
                                                     CLASS A SHARES
<PAGE>

HOW TO RECEIVE ACCOUNT INFORMATION

If you are a contract owner, you should contact your insurance company or the
organization that provides record keeping services for information about your
account.

Please see the contract prospectus that accompanies this prospectus for the
customer service phone number.


HOW TO SELECT SHARES


Shares in the portfolio are available in connection with certain variable
annuity and life insurance arrangements. Each insurance company has different
provisions about how and when their contract owners may select portfolio
shares. Each insurance company is responsible for communicating its contract
owners' instructions to the portfolio. Contract owners should contact their
insurance company to effect transactions in connection with the portfolio.




FINANCIAL INTERMEDIARY SUPPORT PAYMENTS


The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or
their affiliates may pay additional compensation, out of their own assets and
not as an additional charge to the portfolio, to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of portfolio shares or the retention and/or servicing of
fund investors and fund shares ("revenue sharing"). Such revenue sharing
payments are in addition to any distribution or service fees payable under any
Rule 12b-1 or service plan of the portfolio, any record keeping/sub-transfer
agency/networking fees payable by the portfolio (generally through the
Distributor or an affiliate) and/or the Distributor to certain financial
advisors for performing such services and any sales charge, commissions,
non-cash compensation arrangements expressly permitted under applicable rules
of the Financial Industry Regulatory Authority or other concessions described
in the fee table or elsewhere in this prospectus or the Statement of Additional
Information as payable to all financial advisors. For example, the Advisor, the
Distributor and/or their affiliates may compensate financial advisors for
providing the portfolio with "shelf space" or access to a third party platform
or portfolio offering list or other marketing programs, including, without
limitation, inclusion of the portfolio on preferred or recommended sales lists,
mutual fund "supermarket" platforms and other formal sales programs; granting
the Distributor access to the financial advisor's sales force; granting the
Distributor access to the financial advisor's conferences and meetings;
assistance in training and educating the financial advisor's personnel; and
obtaining other forms of marketing support.


The level of revenue sharing payments made to financial advisors may be a fixed
fee or based upon one or more of the following factors: gross sales, current
assets and/or number of accounts of the portfolio attributable to the financial
advisor, the particular portfolio or portfolio type or other measures as agreed
to by the Advisor, the Distributor and/or their affiliates and the financial
advisors or any combination thereof. The amount of these revenue sharing
payments is determined at the discretion of the Advisor, the Distributor and/or
their affiliates from time to time, may be substantial, and may be different
for different financial advisors based on, for example, the nature of the
services provided by the financial advisor.


The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS fund shares or the retention and/or servicing of investors
and DWS fund shares to financial advisors in amounts that generally range from
..01% up to .50% of assets of the portfolio serviced and maintained by the
financial advisor, .05% to .25% of sales of the portfolio attributable to the
financial advisor, a flat fee of $13,350 up to $500,000, or any combination
thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of
receiving, this additional compensation may influence your financial advisor's
recommendation of the portfolio or of any particular share class of the
portfolio. You should review your financial advisor's compensation disclosure
and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor's recommendation of the
portfolio. Additional information regarding these revenue sharing payments is
included in the portfolio's Statement of Additional Information, which is
available to you on request at no charge (see the back cover of this prospectus
for more information on how to request a copy of the Statement of Additional
Information).


The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS


DWS VARIABLE SERIES II - CLASS A SHARES              YOUR INVESTMENT IN THE
                                                     PORTFOLIO   19
<PAGE>

Investments branded retirement plan platform (the "Platform") with the level of
revenue sharing payments being based upon sales of both the DWS funds and the
non-DWS funds by the financial advisor on the Platform or current assets of
both the DWS funds and the non-DWS funds serviced and maintained by the
financial advisor on the Platform.

It is likely that broker-dealers that execute portfolio transactions for the
portfolio will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the portfolio. In addition, the Advisor, the Distributor
and/or their affiliates will not use fund brokerage to pay for their obligation
to provide additional compensation to financial advisors as described above.



HOW THE PORTFOLIO CALCULATES SHARE PRICE

To calculate net asset value per share, or NAV, the portfolio uses the
following equation:



<TABLE>
<S>                                     <C>
   TOTAL ASSETS - TOTAL LIABILITIES
  ---------------------------             = NAV
  TOTAL NUMBER OF SHARES OUTSTANDING
</TABLE>

The price at which you buy and sell shares for the portfolio is the NAV.


FOR THE UNDERLYING FUNDS IN WHICH THE PORTFOLIO INVESTS, WE USE THE NAV OF THE
UNDERLYING FUNDS. FOR OTHER SECURITIES, WE TYPICALLY VALUE SECURITIES USING
INFORMATION FURNISHED BY AN INDEPENDENT PRICING SERVICE OR MARKET QUOTATIONS,
WHERE APPROPRIATE. However, we may use methods approved by the Board, such as a
fair valuation model, which are intended to reflect fair value when pricing
service information or market quotations are not readily available or when a
security's value or a meaningful portion of the value of the fund's portfolio
is believed to have been materially affected by a significant event, such as a
natural disaster, an economic event like a bankruptcy filing, or a substantial
fluctuation in domestic or foreign markets that has occurred between the close
of the exchange or market on which the security is principally traded (for
example, a foreign exchange or market) and the close of the New York Stock
Exchange. In such a case, the fund's value for a security is likely to be
different from the last quoted market price or pricing service information. In
addition, due to the subjective and variable nature of fair value pricing, it
is possible that the value determined for a particular asset may be materially
different from the value realized upon such asset's sale. To the extent that
the portfolio or an underlying fund invests in securities that are traded
primarily in foreign markets, the value of its holdings could change at a time
when you aren't able to buy or sell fund shares. This is because some foreign
markets are open on days or at times when the portfolio or an underlying fund
doesn't price its shares. (Note that prices for securities that trade on
foreign exchanges can change significantly on days when the New York Stock
Exchange is closed and you cannot buy or sell portfolio shares. Price changes
in the securities the portfolio or an underlying fund owns may ultimately
affect the price of portfolio shares the next time the net asset value is
calculated.)




DISTRIBUTIONS


The portfolio intends to declare and distribute dividends from its net
investment income and net capital gains, if any, annually. The portfolio may
make additional distributions if necessary.


All distributions will be reinvested in shares of a portfolio unless we are
informed by an insurance company that they should be paid out in cash. The
insurance companies will be informed about the amount and character of
distributions from the relevant portfolio for federal income tax purposes.



TAXES


The portfolio intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and intends to meet all requirements necessary to avoid paying any
federal income or excise taxes.



20   YOUR INVESTMENT IN THE PORTFOLIO                DWS VARIABLE SERIES II -
                                                     CLASS A SHARES
<PAGE>


Generally, owners of variable annuity and variable life contracts are not
subject to current federal income taxation on income or gains realized with
respect to such contracts. However, some distributions from such contracts,
whether made prior to or during the annuity payment period, may be taxable at
ordinary income tax rates. In addition, distributions made to an owner who is
younger than 59 1-2 may be subject to a 10% penalty tax. For further
information concerning federal income tax consequences for the holders of
variable annuity contracts and variable life insurance policies, such holders
should consult the prospectus used in connection with the issuance of their
particular contracts or policies.

In order for investors to receive the favorable federal income tax treatment
available to holders of variable annuity and variable life contracts, the
separate accounts underlying such contracts, as well as the funds in which such
accounts invest, must meet certain diversification requirements. The portfolio
intends to comply with these requirements. If a portfolio or separate account
does not meet such requirements or fails to qualify as a regulated investment
company for any taxable year, income allocable to the contracts associated with
the separate account may be taxable currently for federal income tax purposes
to the holders of such contracts and income from prior periods with respect to
such contracts also could be taxable, most likely in the year of the failure.

Under Treasury regulations, insurance companies holding the separate accounts
may have to report to the IRS losses above a certain amount resulting from a
sale or disposition of a portfolio's shares.

The discussion above is generally based on the assumption that shares of a
portfolio will be respected as owned by insurance company separate accounts. If
this is not the case (for example, because the IRS finds an impermissible level
of "investor control" over the investment options underlying variable
contracts), the advantageous federal income tax treatment provided in respect
of insurance company separate accounts under the Code will no longer be
available, and the person or persons determined to own the portfolio shares
will be currently taxed on portfolio distributions, and on the proceeds of any
redemption of portfolio shares, under the Code.


Portfolio investments in securities of foreign issuers may be subject to
withholding and other taxes at the source, including on dividend or interest
payments. Participating insurance companies should consult their own tax
advisors as to whether such distributions are subject to federal income tax if
they are retained as part of policy reserves.

The portfolio's investments in certain debt obligations may cause the portfolio
to recognize taxable income in excess of the cash generated by such obligation.
Thus, the portfolio could be required at times to liquidate other investments
in order to satisfy its distribution requirements.


The preceding is a brief summary of certain of the relevant federal income tax
considerations. Because each shareholder and contract holder's tax situation is
unique, ask your tax professional about the tax consequences of your
investments, including possible federal, foreign, state or local taxes.



DWS VARIABLE SERIES II - CLASS A SHARES
                                                             DISTRIBUTIONS   21

<PAGE>

--------------------------------------------------------------------------------
TO GET MORE INFORMATION


SHAREHOLDER REPORTS - These include commentary from the portfolio's management
team about recent market conditions and the effects of the portfolio's
strategies on its performance. They also have detailed performance figures, a
list of everything the portfolio owns, and its financial statements.
Shareholders get these reports automatically.

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
portfolio's features and policies, including additional risk information. The
SAI is incorporated by reference into this document (meaning that it's legally
part of this prospectus).


For a free copy of any of these documents or to request other information about
the portfolio, call (800) 778-1482, or contact DWS Investments at the address
listed below. The portfolio's SAI and shareholder reports are also available
through the DWS Investments Web site at www.dws-investments.com. These
documents and other information about the portfolio are available from the
EDGAR Database on the SEC's Internet site at www.sec.gov. If you like, you may
obtain copies of this information, after paying a copying fee, by e-mailing a
request to publicinfo@sec.gov or by writing the SEC at the address listed
below. You can also review and copy these documents and other information about
the portfolio, including the portfolio's SAI, at the SEC's Public Reference
Room in Washington, D.C. Information on the operation of the SEC's Public
Reference Room may be obtained by calling (800) SEC-0330.






<TABLE>
<CAPTION>
DWS INVESTMENTS DISTRIBUTORS, INC.      SEC
<S>                                     <C>
222 South Riverside Plaza               100 F Street, N.E.
Chicago, IL 60606-5808                  Washington, D.C. 20549-0102
(800) 621-1148                          WWW.SEC.GOV
                                        (800) SEC-0330
</TABLE>



<TABLE>
<CAPTION>
SEC FILE NUMBER:
---------------------------------
<S>                                  <C>
DWS Variable Series II 811-5002
</TABLE>



(01/20/09) 2a-AAA


<PAGE>



                       STATEMENT OF ADDITIONAL INFORMATION



                      DWS VARIABLE SERIES II (the "Trust")

           DWS Alternative Asset Allocation Plus VIP (Class A Shares)

                                January 20, 2009



                    345 Park Avenue, New York, New York 10154
                                 1-800-778-1482



This Statement of Additional Information ("SAI") is not a prospectus. It should
be read in conjunction with the prospectus of DWS Alternative Asset Allocation
Plus VIP (the "Portfolio") dated January 20, 2009, as amended from time to time.
The prospectus may be obtained without charge from the Fund by calling the
toll-free number listed above, and is also available along with other related
materials on the Securities and Exchange Commission ("SEC") Internet Web site
(http://www.sec.gov). The prospectus is also available from the participating
insurance companies ("Participating Insurance Companies").

The Trust offers a choice of 22 portfolios, one of which is the Portfolio, to
holders of certain variable annuity contracts and variable life insurance
policies offered by Participating Insurance Companies.





                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

INVESTMENT RESTRICTIONS.......................................................1

INVESTMENT POLICIES AND TECHNIQUES............................................2
         Portfolio Holdings .................................................48

MANAGEMENT OF THE PORTFOLIO..................................................48

PORTFOLIO SERVICE PROVIDERS..................................................60
         Administrator.......................................................60
         Distributor.........................................................61
         Recordkeeping.......................................................61
         Transfer Agent......................................................61
         Custodian...........................................................62
         Independent Registered Public Accounting Firm.......................62
         Counsel.............................................................62

PORTFOLIO TRANSACTIONS.......................................................64

PURCHASE AND REDEMPTIONS.....................................................66

DIVIDENDS AND CAPITAL GAINS..................................................74

FEDERAL INCOME TAXES.........................................................74

NET ASSET VALUE..............................................................75

BOARD MEMBERS AND OFFICERS...................................................75

TRUST ORGANIZATION...........................................................93

PROXY VOTING GUIDELINES......................................................94

FINANCIAL STATEMENTS.........................................................94

ADDITIONAL INFORMATION.......................................................94

APPENDIX A -- PROXY VOTING GUIDELINES........................................95

APPENDIX B -- RATINGS OF INVESTMENTS........................................119



                             INVESTMENT RESTRICTIONS

Except as otherwise indicated, the Portfolio's investment objective and policies
are not fundamental and may be changed without a vote of shareholders. There can
be no assurance that the Portfolio's investment objective will be met.

If a percentage restriction is adhered to at the time of the investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation.


The Trust has adopted for the Portfolio certain fundamental investment
restrictions that will not be changed unless approved by a "majority" of the
outstanding voting shares of the Portfolio. As defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), this means the lesser of the vote of
(a) 67% of the shares of the Portfolio present at a meeting where more than 50%
of the outstanding shares are present in person or by proxy or (b) more than 50%
of the outstanding shares of the Portfolio.


The Portfolio is classified as a diversified open-end management investment
company. A diversified portfolio may not, with respect to 75% of total assets,
invest more than 5% of total assets in the securities of a single issuer or
invest in more than 10% of the outstanding voting securities of such issuer.

The Portfolio may not, as a fundamental policy:


(1)      borrow money, except as permitted under the 1940 Act, and as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time;

(2)      issue senior securities, except as permitted under the 1940 Act, and as
         interpreted or modified by regulatory authority having jurisdiction,
         from time to time;


(3)      engage in the business of underwriting securities issued by others,
         except to the extent that the Portfolio may be deemed to be an
         underwriter in connection with the disposition of portfolio securities;


(4)      concentrate its investments in a particular industry, as that term is
         used in the 1940 Act, and as interpreted by or modified by regulatory
         authority having jurisdiction, from time to time; except that the
         Portfolio may concentrate in any underlying DWS fund;


(5)      purchase or sell real estate, which term does not include securities of
         companies which deal in real estate or mortgages or investment secured
         by real estate or interests therein, except that the Portfolio reserves
         freedom of action to hold and to sell real estate acquired as a result
         of the Portfolio's ownership of securities;


(6)      purchase or sell commodities, except as permitted by the 1940 Act, and
         as interpreted or modified by the regulatory authority having
         jurisdiction, from time to time; or

(7)      make loans except as permitted under the 1940 Act, and as interpreted
         or modified by regulatory authority having jurisdiction, from time to
         time.

With regard to fundamental policy (4) above, for purposes of determining the
percentage of the Portfolio's total assets invested in securities of issuers
having their principal business activities in a particular industry,
asset-backed securities will be classified as a single industry.

The Trust has also adopted the following non-fundamental policies for the
Portfolio, which may be changed or eliminated for the Portfolio by the Trust's
Board without a shareholder vote:


As a matter of non-fundamental policy, the Portfolio does not intend to:




(1)      purchase securities on margin, except (i) margin deposits in connection
         with short sales, futures contracts, options or other permitted
         investments; (ii) that transactions in futures contracts and options
         shall not be deemed to constitute selling securities short; and (iii)
         that the Portfolio may obtain such short-term credits as may be deemed
         necessary for the clearance of securities transactions; and





(2)      lend portfolio securities in an amount greater than 33 1/3% of its
         total assets.


To meet requirements contained in the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company, the Portfolio
must limit its investments so that at the close of each quarter of its taxable
year (1) no more than 25% of the value of its total assets is invested in (a)
the securities (other than US Government securities or securities of a regulated
investment company) of a single issuer or two or more issuers which the
Portfolio controls and which are engaged in the same, similar or related trades
or businesses, or (b) in the securities of one or more qualified publicly traded
partnerships (as discussed in "Federal Income Taxes" below), and (2) at least
50% of the value of its total assets is represented by cash, cash items
(including receivables), government securities, securities of other regulated
investment companies, and other securities of any issuer that does not represent
more than 5% of the value of the Portfolio's total assets or more than 10% of
the issuer's outstanding voting securities.



                       INVESTMENT POLICIES AND TECHNIQUES

General. This section explains the extent to which the Portfolio's investment
advisor, Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"),
can use various investment vehicles and strategies in managing the Portfolio's
assets. Descriptions of the investment techniques and risks associated with the
Portfolio appear herein. In the case of the Portfolio's principal investment
strategies, these descriptions elaborate upon discussions contained in the
Prospectus.


The Portfolio is a diversified series of DWS Variable Series II, an open-end
management investment company, which continuously offers and redeems shares at
net asset value. The Portfolio offers Class A shares.


In general, within the restrictions outlined here and in the Portfolio's
Prospectus, the Advisor has broad powers to decide how to invest Portfolio
assets, including the power to hold them uninvested.


Descriptions in this SAI of a particular investment practice or technique in
which the Portfolio may engage or a financial instrument which the Portfolio may
purchase (such as options, etc.) are meant to describe the spectrum of
investments that the Advisor in its discretion, might, but is not required to,
use in managing the Portfolio's assets. For purposes of this section, the
investment policies and techniques apply to the Portfolio (including when the
Advisor invests directly in individual securities on behalf of the Portfolio)
and the Underlying DWS Funds in which the Portfolio may invest, unless otherwise
indicated. The Portfolio and Underlying DWS Funds are referred to herein as a
"fund." Not all Underlying DWS Funds may engage in all of the practices
described below and an Underlying DWS Fund's ability to engage in any technique
or strategy is subject to the investment policies and techniques contained in
its prospectus and Statement of Additional Information. The Advisor may, in its
discretion, at any time employ such practice, technique or instrument for one or
more funds, but not for all funds advised by it. Furthermore, it is possible
that certain types of financial instruments or investment techniques described
herein may not be available, permissible, economically feasible or effective for
their intended purposes in all markets. Certain practices, techniques, or
instruments may not be principal activities of the Portfolio or an Underlying
DWS Fund but, to the extent employed, could from time to time have a material
impact on the Portfolio's performance.




Adjustable Rate Securities. The interest rates paid on the adjustable rate
securities in which a fund invests generally are readjusted at intervals of one
year or less to an increment over some predetermined interest rate index. There
are three main categories of indices: those based on US Treasury securities,
those derived from a calculated measure such as a cost of funds index and those
based on a moving average of mortgage rates. Commonly used indices include the
one-year, three-year and five-year constant maturity Treasury rates, the
three-month Treasury bill rate, the 180-day Treasury bill rate, rates on
longer-term Treasury securities, the 11th District Federal Home Loan Bank Cost
of Funds, the National Median Cost of Funds, the one-month, three-month,
six-month or one-year London Interbank Offered Rate ("LIBOR"), the prime rate of
a specific bank or commercial paper rates. Some indices, such as the one-year
constant maturity Treasury rate, closely mirror changes in market interest rate
levels. Others, such as the 11th District Home Loan Bank Cost of Funds index,
tend to lag behind changes in market rate levels and tend to be somewhat less
volatile.

The mortgage-backed securities either issued or guaranteed by the Government
National Mortgage Association ("GNMA"), Federal Home Loan Mortgage Corporation
("FHLMC") or Federal National Mortgage Association ("FNMA" or "Fannie Mae")
("Certificates") are called pass-through Certificates because a pro rata share
of both regular interest and principal payments (less GNMA's, FHLMC's or FNMA's
fees and any applicable loan servicing fees), as well as unscheduled early
prepayments on the underlying mortgage pool, are passed through monthly to the
holder of the Certificate (i.e., a fund). The principal and interest on GNMA
securities are guaranteed by GNMA and backed by the full faith and credit of the
US Government. FNMA guarantees full and timely payment of all interest and
principal, while FHLMC guarantees timely payment of interest and ultimate
collection of principal. mortgage-backed securities from FNMA and FHLMC are not
backed by the full faith and credit of the United States; however, they are
generally considered to offer minimal credit risks. The yields provided by these
mortgage-backed securities have historically exceeded the yields on other types
of US Government securities with comparable maturities in large measure due to
the prepayment risk discussed below.

If prepayments of principal are made on the underlying mortgages during periods
of rising interest rates, a fund generally will be able to reinvest such amounts
in securities with a higher current rate of return. However, a fund will not
benefit from increases in interest rates to the extent that interest rates rise
to the point where they cause the current coupon of adjustable rate mortgages
held as investments by a fund to exceed the maximum allowable annual or lifetime
reset limits (or "cap rates") for a particular mortgage. Also, a fund's net
asset value could vary to the extent that current yields on mortgage-backed
securities are different than market yields during interim periods between
coupon reset dates.

During periods of declining interest rates, of course, the coupon rates may
readjust downward, resulting in lower yields to a fund. Further, because of this
feature, the value of adjustable rate mortgages is unlikely to rise during
periods of declining interest rates to the same extent as fixed-rate
instruments. As with other mortgage-backed securities, interest rate declines
may result in accelerated prepayment of mortgages, and the proceeds from such
prepayments must be reinvested at lower prevailing interest rates.

One additional difference between adjustable rate mortgages and fixed rate
mortgages is that for certain types of adjustable rate mortgage securities, the
rate of amortization of principal, as well as interest payments, can and does
change in accordance with movements in a specified, published interest rate
index. The amount of interest due to an adjustable rate mortgage security holder
is calculated by adding a specified additional amount, the "margin," to the
index, subject to limitations or "caps" on the maximum and minimum interest that
is charged to the mortgagor during the life of the mortgage or to maximum and
minimum changes to that interest rate during a given period.


Advance Refunded Bonds. A fund may purchase Municipal Securities that are
subsequently refunded by the issuance and delivery of a new issue of bonds prior
to the date on which the outstanding issue of bonds can be redeemed or paid. The
proceeds from the new issue of bonds are typically placed in an escrow fund
consisting of US Government obligations that are used to pay the interest,
principal and call premium on the issue being refunded. A fund may also purchase
Municipal Securities that have been refunded prior to purchase by the fund.


Asset-Backed Securities. Asset-backed securities may include pools of mortgages
("mortgage-backed securities"), loans, receivables or other assets. Payment of
principal and interest may be largely dependent upon the cash flows generated by
the assets backing the securities. For purposes of determining the percentage of
a fund's total assets invested in securities of issuers having their principal
business activities in a particular industry, asset-backed securities will be
classified separately, based on the nature of the underlying assets, according
to the following categories: captive auto, diversified, retail and consumer
loans, captive equipment and business, business trade receivables, nuclear fuel
and capital and mortgage lending. Asset-backed securities (other than
mortgage-backed securities) present certain risks that are not presented by
mortgage-backed securities. Primarily, these securities may not have the benefit
of any security interest in the related assets. Credit card receivables are
generally unsecured and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set off certain amounts owed on the credit cards, thereby reducing the
balance due. There is the possibility that recoveries on repossessed collateral
may not, in some cases, be available to support payments on these securities.
Asset-backed securities are often backed by a pool of assets representing the
obligations of a number of different parties. To lessen the effect of failures
by obligors on underlying assets to make payments, the securities may contain
elements of credit support which fall into two categories: (i) liquidity
protection, and (ii) protection against losses resulting from ultimate default
by an obligor on the underlying assets. Liquidity protection refers to the
provision of advances, generally by the entity administering the pool of assets,
to ensure that the receipt of payments on the underlying pool occurs in a timely
fashion. Protection against losses results from payment of the insurance
obligations on at least a portion of the assets in the pool. This protection may
be provided through guarantees, policies or letters of credit obtained by the
issuer or sponsor from third parties, through various means of structuring the
transaction or through a combination of such approaches. The funds will not pay
any additional or separate fees for credit support. The degree of credit support
provided for each issue is generally based on historical information respecting
the level of credit risk associated with the underlying assets. Delinquency or
loss in excess of that anticipated or failure of the credit support could
adversely affect the return on an investment in such a security. The
availability of asset-backed securities may be affected by legislative or
regulatory developments. It is possible that such developments may require the
funds to dispose of any then existing holdings of such securities.

Asset-Indexed Securities. Asset-indexed securities are debt securities usually
issued by companies in precious metals related businesses such as mining, the
principal amount, redemption terms, or interest rates of which are related to
the market price of a specified precious metal. A fund will only enter into
transactions in publicly traded asset-indexed securities. Market prices of
asset-indexed securities will relate primarily to changes in the market prices
of the precious metals to which the securities are indexed rather than to
changes in market rates of interest. However, there may not be a perfect
correlation between the price movements of the asset-indexed securities and the
underlying precious metals. Asset-indexed securities typically bear interest or
pay dividends at below market rates (and in certain cases at nominal rates). A
fund may purchase asset-indexed securities to the extent permitted by law.


Asset Segregation. Certain investment transactions expose a fund to an
obligation to make future payments to third parties. Examples of these types of
transactions, include, but are not limited to, reverse repurchase agreements,
short sales, dollar rolls, when-issued, delayed-delivery or forward commitment
transactions and certain derivatives such as swaps, futures, forwards, and
options. To the extent that a fund engages in such transactions, a fund will (to
the extent required by applicable law) either (1) segregate cash or liquid
assets in the prescribed amount or (2) otherwise "cover" its future obligations
under the transaction, such as by holding an offsetting investment. If a fund
segregates sufficient cash or other liquid assets or otherwise "covers" its
obligations under such transactions, a fund will not consider the transactions
to be borrowings for purposes of its investment restrictions or "senior
securities" under the 1940 Act, and therefore, such transactions will not be
subject to the 300% asset coverage requirement under the 1940 Act otherwise
applicable to borrowings by a fund.

In some cases (e.g., with respect to futures and forwards that are contractually
required to "cash-settle"), a fund will segregate cash or other liquid assets
with respect to the amount of the daily net (marked-to-market) obligation
arising from the transaction, rather than the notional amount of the underlying
contract. By segregating assets in an amount equal to the net obligation rather
than the notional amount, a fund will have the ability to employ leverage to a
greater extent than if it set aside cash or other liquid assets equal to the
notional amount of the contract, which may increase the risk associated with
such transactions.

A fund may utilize methods of segregating assets or otherwise "covering"
transactions that are currently or in the future permitted under the 1940 Act,
the rules and regulation thereunder, or orders issued by the SEC thereunder. For
these purposes, interpretations and guidance provided by the SEC staff may be
taken into account when deemed appropriate by a fund.

Assets used as segregation or cover cannot be sold while the position in the
corresponding transaction is open, unless they are replaced with other
appropriate assets. As a result, the commitment of a large portion of a fund's
assets for segregation and cover purposes could impede portfolio management or a
fund's ability to meet redemption requests or other current obligations.

Segregating assets or otherwise "covering" for these purposes does not
necessarily limit the percentage of the assets of a fund that may be at risk
with respect to certain derivative transactions.


Bank and Savings and Loan Obligations. These obligations include negotiable
certificates of deposit, bankers' acceptances, deposit notes, fixed time
deposits or other short-term bank obligations. Certificates of deposit are
negotiable certificates evidencing the obligations of a bank to repay funds
deposited with it for a specified period of time. A fund may invest in
certificates of deposit of large domestic banks and their foreign branches,
large US regulated subsidiaries of large foreign banks (i.e., banks which at the
time of their most recent annual financial statements show total assets in
excess of $1 billion), and of smaller banks as described below. Although a fund
recognizes that the size of a bank is important, this fact alone is not
necessarily indicative of its creditworthiness. Investment in certificates of
deposit issued by foreign branches of domestic banks involves investment risks
that are different in some respects from those associated with investment in
certificates of deposit issued by domestic branches of domestic banks, including
the possible imposition of withholding taxes on interest income, the possible
adoption of foreign governmental restrictions which might adversely affect the
payment of principal and interest on such certificates of deposit, or other
adverse political or economic developments. In addition, it might be more
difficult to obtain and enforce a judgment against a foreign branch of a
domestic bank.



Banker's acceptances are credit instruments evidencing the obligations of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity.

Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time at a stated interest rate. Time deposits which
may be held by a fund will not benefit from insurance from the Bank Insurance
Fund or the Savings Association Insurance Fund administered by the Federal
Deposit Insurance Corporation. Fixed time deposits may be withdrawn on demand by
the investor, but may be subject to early withdrawal penalties that vary with
market conditions and the remaining maturity of the obligation. Fixed time
deposits subject to withdrawal penalties maturing in more than seven calendar
days are subject to a fund's limitation on investments in illiquid securities.

Bank Loans. Bank loans are typically senior debt obligations of borrowers
(issuers) and as such, are considered to hold a senior position in the capital
structure of the borrower. These may include loans which hold the most senior
position, that hold an equal ranking with other senior debt, or loans that are,
in the judgment of the Advisor, in the category of senior debt of the borrower.
This capital structure position generally gives the holders of these loans a
priority claim on some or all of the borrower's assets in the event of a
default. In most cases, these loans are either partially or fully collateralized
by the assets of a corporation, partnership, limited liability company or other
business entity, or by cash flow that the Advisor believes has a market value at
the time of acquisition that equals or exceeds the principal amount of the loan.
These loans are often issued in connection with recapitalizations, acquisitions,
leveraged buy-outs and refinancings. It is important to note that Moody's and
S&P may rate bank loans higher than high yield bonds of the same issuer to
reflect their more senior position. The fund may invest in both fixed- and
floating-rate loans. In addition, bank loans can trade either as an "assignment"
or "participation." When a fund buys an assignment, it is essentially becoming a
party to the bank agreement. The vast majority of all trades are assignments and
would therefore generally represent the preponderance of bank loans held by the
fund. In certain cases, a fund may buy bank loans on a participation basis, if
for example, the fund did not want to become party to the bank agreement.
However, in all cases, a fund will not purchase bank loans where Deutsche Bank,
or an affiliate, serves as an agent bank.

Participations and assignments involve credit risk, interest rate risk,
liquidity risk, and the risk of being a lender. If a fund purchases a
participation, it may only be able to enforce its rights through the lender, and
may assume the credit risk of both the lender and the borrower.

Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks. For example, if a
loan is foreclosed, the purchaser could become part owner of any collateral, and
would bear the costs and liabilities associated with owning and disposing of the
collateral. In addition, it is at least conceivable that under emerging legal
theories of lender liability, a purchaser could be held liable as a co-lender.

In the case of loans administered by a bank or other financial institution that
acts as agent for all holders, if assets held by the agent for the benefit of a
purchaser are determined to be subject to the claims of the agent's general
creditors, the purchaser might incur certain costs and delays in realizing
payment on the loan or loan participation and could suffer a loss of principal
or interest.

In the case of loan participations where a bank or other lending institution
serves as financial intermediary between a fund and the borrower, if the
participation does not shift to the fund the direct debtor-creditor relationship
with the borrower, Securities and Exchange Commission ("SEC") interpretations
require the fund, in some circumstances, to treat both the lending bank or other
lending institution and the borrower as issuers for purposes of the fund's
investment policies. Treating a financial intermediary as an issuer of
indebtedness may restrict a fund's ability to invest in indebtedness related to
a single financial intermediary, or a group of intermediaries engaged in the
same industry, even if the underlying borrowers represent many different
companies and industries.


Borrowing. As a matter of fundamental policy, a fund will not borrow money,
except as permitted under the 1940 Act, and as interpreted or modified by
regulatory authority having jurisdiction, from time to time. While each fund
(except the Portfolio and DWS Floating Rate Plus Fund) does not currently intend
to borrow for investment leveraging purposes, if such a strategy were
implemented in the future it would increase the funds' volatility and the risk
of loss in a declining market. Borrowing by a fund will involve special risk
considerations. Although the principal of a fund's borrowings will be fixed, a
fund's assets may change in value during the time a borrowing is outstanding,
thus increasing exposure to capital risk.

The Portfolio and DWS Floating Rate Plus Fund may borrow money from banks for
investment purposes to the extent permitted by the 1940 Act. This practice is
known as leverage. Currently, under the 1940 Act, a fund may borrow up to
one-third of its total assets (including the amount borrowed) provided that it
maintains continuous asset coverage of 300% with respect to such borrowings and
sells (within three days) sufficient portfolio holdings to restore such coverage
if it should decline to less than 300% due to market fluctuations or otherwise,
even if disadvantageous from an investment standpoint. A fund may borrow through
other means to the extent permitted by the 1940 Act. In addition to borrowing
for leverage purposes, a fund also may borrow money to meet redemptions in order
to avoid forced, unplanned sales of portfolio securities or for other temporary
or emergency purposes. This allows a fund greater flexibility to buy and sell
portfolio securities for investment or tax considerations, rather than for cash
flow considerations.

The use of borrowing involves special risk considerations that may not be
associated with other funds having similar policies. Because substantially all
of a fund's assets fluctuate in value, whereas the interest obligation resulting
from a borrowing may be fixed by the terms of a fund's agreement with its
lender, the net asset value per share of a fund will tend to increase more when
its portfolio securities increase in value and decrease more when its portfolio
securities decrease in value than would otherwise be the case if a fund did not
borrow funds. In addition, interest costs on borrowings may fluctuate with
changing market rates of interest and may partially offset or exceed the return
earned on borrowed funds. Under adverse market conditions, a fund might have to
sell portfolio securities to meet interest or principal payments at a time when
fundamental investment considerations would not favor such sales. The interest
that a fund must pay on borrowed money, together with any additional fees to
establish and maintain a borrowing facility, are additional costs that will
reduce or eliminate any net investment income and may also offset any potential
capital gains. Unless appreciation and income, if any, on assets acquired with
borrowed funds exceed the costs of borrowing, the use of leverage will diminish
the investment performance of a fund compared with what it would have been
without leverage.


Certificates of Deposit and Bankers' Acceptances. Certificates of deposit are
receipts issued by a depository institution in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited plus interest to the bearer
of the receipt on the date specified on the certificate. The certificate usually
can be traded in the secondary market prior to maturity. Bankers' acceptances
typically arise from short-term credit arrangements designed to enable
businesses to obtain funds to finance commercial transactions. Generally, an
acceptance is a time draft drawn on a bank by an exporter or an importer to
obtain a stated amount of funds to pay for specific merchandise. The draft is
then "accepted" by a bank that, in effect, unconditionally guarantees to pay the
face value of the instrument on its maturity date. The acceptance may then be
held by the accepting bank as an earning asset or it may be sold in the
secondary market at the going rate of discount for a specific maturity. Although
maturities for acceptances can be as long as 270 days, most acceptances have
maturities of six months or less.

Collateralized Mortgage Obligations ("CMOs"). CMOs are hybrids between
mortgage-backed bonds and mortgage pass-through securities. Similar to a bond,
interest and prepaid principal are paid, in most cases, semiannually. CMOs may
be collateralized by whole mortgage loans but are more typically collateralized
by portfolios of mortgage pass-through securities guaranteed by GNMA, FHLMC, or
Fannie Mae, and their income streams.

CMOs are structured into multiple classes, each bearing a different stated
maturity. Actual maturity and average life will depend upon the prepayment
experience of the collateral. CMOs provide for a modified form of call
protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes receive principal only after the first class has been
retired. An investor is partially guarded against a sooner than desired return
of principal because of the sequential payments. The prices of certain CMOs,
depending on their structure and the rate of prepayments, can be volatile. Some
CMOs may also not be as liquid as other securities.

In a typical CMO transaction, a corporation issues multiple series (e.g., A, B,
C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering are used to purchase
mortgages or mortgage pass-through certificates ("Collateral"). The Collateral
is pledged to a third party trustee as security for the Bonds. Principal and
interest payments from the Collateral are used to pay principal on the Bonds in
the order A, B, C, Z. The Series A, B, and C Bonds all bear current interest.
Interest on the Series Z Bond is accrued and added to principal and a like
amount is paid as principal on the Series A, B, or C Bond currently being paid
off. When the Series A, B, and C Bonds are paid in full, interest and principal
on the Series Z Bond begins to be paid currently. With some CMOs, the issuer
serves as a conduit to allow loan originators (primarily builders or savings and
loan associations) to borrow against their loan portfolios.

The principal risk of CMOs results from the rate of prepayments on underlying
mortgages serving as collateral and from the structure of the deal. An increase
or decrease in prepayment rates will affect the yield, average life and price of
CMOs.

Commercial Paper. A fund may invest in commercial paper issued by major
corporations under the Securities Act of 1933, as amended (the "1933 Act") in
reliance on the exemption from registration afforded by Section 3(a)(3) thereof.
Such commercial paper may be issued only to finance current transactions and
must mature in nine months or less. Trading of such commercial paper is
conducted primarily by institutional investors through investment dealers, and
individual investor participation in the commercial paper market is very
limited. A fund also may invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the 1933 Act ("Section 4(2) paper"). Section 4(2) paper is restricted as
to disposition under the federal securities laws, and generally is sold to
institutional investors such as a fund who agree that they are purchasing the
paper for investment and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) paper normally is
resold to other institutional investors like a fund through or with the
assistance of the issuer or investment dealers who make a market in the Section
4(2) paper, thus providing liquidity. The Advisor considers the legally
restricted but readily saleable Section 4(2) paper to be liquid; however,
pursuant to procedures approved by a fund's Board, if a particular investment in
Section 4(2) paper is not determined to be liquid, that investment will be
included within the limitation of a fund on illiquid securities. The Advisor
monitors the liquidity of its investments in Section 4(2) paper on a continuing
basis.


Commodity-Linked Derivative Instruments. A fund may invest in commodity-linked
derivative instruments, in particular in structured notes. The value of a
commodity-linked derivative instrument typically is based on the price movements
of a physical commodity, a commodity futures contract or commodity index, or
some other readily measurable economic variable dependent upon changes in the
value of commodities or the commodities markets. A fund invests in
commodity-linked derivative investments that are hybrid instruments excluded
from regulation under the Commodity Exchange Act and the rules thereunder.
Additionally, from time to time a fund may invest in other hybrid instruments
that do not qualify for exemption from regulation under the Commodity Exchange
Act.

A fund will invest in derivative debt instruments with principal and/or coupon
payments linked to the value of commodities, commodity futures contracts, or the
performance of commodity indices. These are "commodity-linked" or "index-linked"
notes. They are sometimes referred to as "structured notes" because the terms of
the debt instrument may be structured by the issuer of the note and the
purchaser of the note, such as a fund. These notes may be issued by banks,
brokerage firms, insurance companies and other corporations.

The values of these notes will rise and fall in response to changes in the
underlying commodity or related index or investment. These notes expose a fund
economically to movements in commodity prices, but a particular note is
primarily a debt obligation. These notes also are subject to credit and interest
rate risks that in general affect the value of debt securities. Therefore, at
the maturity of the note, a fund may receive more or less principal than it
originally invested. A fund might receive interest payments on the note that are
more or less than the stated coupon interest rate payments.

The structured notes a fund enters into are expected to involve leverage,
meaning that the value of the instrument will be calculated as a multiple of the
upward or downward price movement of the underlying index. The prices of
commodity-linked instruments may move in different directions than investments
in traditional equity and debt securities in periods of rising inflation. Of
course, there can be no guarantee that a fund's commodity-linked investments
would not be correlated with traditional financial assets under any particular
market conditions.

Commodity-linked structured notes may be issued by US and foreign banks,
brokerage firms, insurance companies and other corporations. These notes are
debt securities of the issuer and so, in addition to fluctuating in response to
changes in the underlying commodity index, will be subject to credit and
interest rate risks that typically affect debt securities.

The commodity-linked instruments a fund invests in may be wholly principal
protected, partially principal protected or offer no principal protection. With
a wholly principal protected instrument, a fund will receive at maturity the
greater of the par value of the note or the increase in value of the underlying
index. Partially protected instruments may suffer some loss of principal up to a
specified limit if the underlying index declines in value during the term of the
instrument. For instruments without principal protection, there is a risk that
the instrument could lose all of its value if the index declines sufficiently.
The Advisor's decision on whether and to what extent to use principal protection
depends in part on the cost of the protection. In addition, the ability of a
fund to take advantage of any protection feature depends on the creditworthiness
of the issuer of the instrument.

Some of the commodity-linked instruments a fund may hold will involve leverage.
A fund will not invest in an instrument if, at the time of purchase, (1) that
instrument's "leverage ratio" exceeds 300% of the price increase (or decrease)
in the underlying index or (2) a fund's portfolio leverage ratio" exceeds 150%.
What this means is that for an instrument with a "leverage factor" of 300%, a 1%
gain (or loss) in the underlying index would result in a 3% gain (or loss) in
the value of the instrument. "Portfolio leverage ratio" is defined as the
average (mean) leverage ratio of all instruments in a fund's portfolio, weighted
by the market values of such instruments or, in the case of futures contracts,
their notional value.

Derivative strategies and the writing of uncovered (or so-called "naked")
options are speculative and may hurt a fund's performance. A fund may attempt to
hedge its investments in order to mitigate risk, but it is not required to do
so. The benefits to be derived from a fund's derivatives and options strategy
are dependent upon the Advisor's ability to discern pricing inefficiencies and
predict trends in the commodities and other markets, which decisions could prove
to be inaccurate. This requires different skills and techniques than predicting
changes in the price of individual stocks or fixed-income securities, and there
can be no assurance that the use of this strategy will be successful.


Common Stocks. Common stock is issued by companies to raise cash for business
purposes and represents a proportionate interest in the issuing companies.
Therefore, a fund participates in the success or failure of any company in which
it holds stock. The market values of common stock can fluctuate significantly,
reflecting the business performance of the issuing company, investor perception
and general economic and financial market movements. Despite the risk of price
volatility, however, common stocks have historically offered a greater potential
for long-term gain on investment, compared to other classes of financial assets
such as bonds or cash equivalents, although there can be no assurance that this
will be true in the future.

Convertible Securities. A fund may invest in convertible securities, that is,
bonds, notes, debentures, preferred stocks and other securities which are
convertible into common stock. Investments in convertible securities can provide
an opportunity for capital appreciation and/or income through interest and
dividend payments by virtue of their conversion or exchange features.

The convertible securities in which a fund may invest are either fixed income or
zero coupon debt securities which may be converted or exchanged at a stated or
determinable exchange ratio into underlying shares of common stock. The exchange
ratio for any particular convertible security may be adjusted from time to time
due to stock splits, dividends, spin-offs, other corporate distributions or
scheduled changes in the exchange ratio. Convertible debt securities and
convertible preferred stocks, until converted, have general characteristics
similar to both debt and equity securities. Although to a lesser extent than
with debt securities generally, the market value of convertible securities tends
to decline as interest rates increase and, conversely, tends to increase as
interest rates decline. In addition, because of the conversion or exchange
feature, the market value of convertible securities typically changes as the
market value of the underlying common stocks changes, and, therefore, also tends
to follow movements in the general market for equity securities. A unique
feature of convertible securities is that as the market price of the underlying
common stock declines, convertible securities tend to trade increasingly on a
yield basis, and so may not experience market value declines to the same extent
as the underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock, although typically not
as much as the underlying common stock. While no securities investments are
without risk, investments in convertible securities generally entail less risk
than investments in common stock of the same issuer.

As debt securities, convertible securities are investments which provide for a
stream of income (or in the case of zero coupon securities, accretion of income)
with generally higher yields than common stocks. Convertible securities
generally offer lower yields than non-convertible securities of similar quality
because of their conversion or exchange features.

Of course, like all debt securities, there can be no assurance of income or
principal payments because the issuers of the convertible securities may default
on their obligations.

Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of the
same issuer. However, because of the subordination feature, convertible bonds
and convertible preferred stock typically have lower ratings than similar
non-convertible securities. Convertible securities may be issued as fixed income
obligations that pay current income or as zero coupon notes and bonds, including
Liquid Yield Option Notes ("LYONs"(TM)).

Corporate Obligations. Investment in corporate debt obligations involves credit
and interest rate risk. The value of fixed-income investments will fluctuate
with changes in interest rates and bond market conditions, tending to rise as
interest rates decline and to decline as interest rates rise. Corporate debt
obligations generally offer less current yield than securities of lower quality,
but lower-quality securities generally have less liquidity, greater credit and
market risk, and as a result, more price volatility. Longer-term bonds are,
however, generally more volatile than bonds with shorter maturities.


Currency Management Techniques. The instruments involved in currency-related
transactions may be considered derivative instruments. In connection with its
investments in foreign securities, a fund may enter into currency related
transactions to attempt to protect against an anticipated rise in the US dollar
price of securities that it intends to purchase. In addition, a fund may enter
into currency-related transactions to attempt to protect against the decline in
value of its foreign currency denominated or quoted portfolio securities, or a
decline in the value of anticipated dividends or interest from such securities,
due to a decline in the value of the foreign currency against the US dollar. In
addition to protecting a fund from currency movements, a fund will use currency
management techniques to add to investment returns and generally not for hedging
purposes when it employs the global asset allocation strategy. The forecasting
of currency market movements is extremely difficult and there can be no
assurance that currency strategies will be successful. If the Advisor is
incorrect in its forecast, currency strategies may result in investment
performance worse than if the strategies were not attempted. In addition,
forward contracts and over-the-counter currency options may be illiquid and are
subject to the risk that the counterparty will default on its obligations.


Custodial Receipts. Custodial receipts are interests in separately traded
interest and principal component parts of US Government securities that are
issued by banks or brokerage firms and are created by depositing US Government
securities into a special account at a custodian bank. The custodian holds the
interest and principal payments for the benefit of the registered owners of the
certificates or receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains the register.
Custodial receipts include Treasury Receipts ("TRs"), Treasury Investment Growth
Receipts ("TIGRs"), and Certificates of Accrual on Treasury Securities ("CATS").
TIGRs and CATS are interests in private proprietary accounts while TRs and
STRIPS (see "US Government Securities" below) are interests in accounts
sponsored by the US Treasury. Receipts are sold as zero coupon securities; for
more information, see "Zero Coupon Securities."

A fund may acquire US Government securities and their unmatured interest coupons
that have been separated ("stripped") by their holder, typically a custodian
bank or investment brokerage firm. Having separated the interest coupons from
the underlying principal of the US Government securities, the holder will resell
the stripped securities in custodial receipt programs with a number of different
names, including TIGRs and CATS. The stripped coupons are sold separately from
the underlying principal, which is usually sold at a deep discount because the
buyer receives only the right to receive a future fixed payment on the security
and does not receive any rights to periodic interest (cash) payments. The
underlying US Treasury bonds and notes themselves are generally held in
book-entry form at a Federal Reserve Bank. Counsel to the underwriters of these
certificates or other evidences of ownership of US Treasury securities have
stated that, in their opinion, purchasers of the stripped securities most likely
will be deemed the beneficial holders of the underlying US Government securities
for federal income tax and securities purposes. In the case of CATS and TIGRS,
the Internal Revenue Service (the "IRS") has reached this conclusion for the
purpose of applying the diversification requirements applicable to regulated
investment companies, such as a fund, under the Code. CATS and TIGRS are not
considered US Government securities by the staff of the SEC. Further, the IRS
conclusion noted above is contained only in a general counsel memorandum, which
is an internal document of no precedential value or binding effect, and a
private letter ruling, which also may not be relied upon by a fund. Each fund is
not aware of any binding legislative, judicial or administrative authority on
this issue.

Depositary Receipts. A fund may invest in sponsored or unsponsored American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global
Depositary Receipts ("GDRs"), International Depositary Receipts ("IDRs") and
other types of Depositary Receipts (which, together with ADRs, GDRs and IDRs are
hereinafter referred to as "Depositary Receipts"). Depositary receipts provide
indirect investment in securities of foreign issuers. Prices of unsponsored
Depositary Receipts may be more volatile than if they were sponsored by the
issuer of the underlying securities. Depositary Receipts may not necessarily be
denominated in the same currency as the underlying securities into which they
may be converted. In addition, the issuers of the stock of unsponsored
Depositary Receipts are not obligated to disclose material information in the
United States and, therefore, there may not be a correlation between such
information and the market value of the Depositary Receipts. ADRs are Depositary
Receipts which are bought and sold in the United States and are typically issued
by a US bank or trust company which evidence ownership of underlying securities
by a foreign corporation. GDRs, IDRs and other types of Depositary Receipts are
typically issued by foreign banks or trust companies, although they may also be
issued by United States banks or trust companies, and evidence ownership of
underlying securities issued by either a foreign or a United States corporation.
Generally, Depositary Receipts in registered form are designed for use in the
United States securities markets and Depositary Receipts in bearer form are
designed for use in securities markets outside the United States. For purposes
of a fund's investment policies, a fund's investments in ADRs, GDRs and other
types of Depositary Receipts will be deemed to be investments in the underlying
securities. Depositary Receipts, including those denominated in US dollars will
be subject to foreign currency exchange rate risk. However, by investing in US
dollar-denominated ADRs rather than directly in foreign issuers' stock, a fund
avoids currency risks during the settlement period. In general, there is a
large, liquid market in the United States for most ADRs. However, certain
Depositary Receipts may not be listed on an exchange and therefore may be
illiquid securities.

Dollar Roll Transactions. Dollar roll transactions consist of the sale by a fund
to a bank or broker/dealer (the "counterparty") of GNMA certificates or other
mortgage-backed securities together with a commitment to purchase from the
counterparty similar, but not identical, securities at a future date, at the
same price. The counterparty receives all principal and interest payments,
including prepayments, made on the security while it is the holder. A fund
receives a fee from the counterparty as consideration for entering into the
commitment to purchase. Dollar rolls may be renewed over a period of several
months with a different purchase and repurchase price fixed and a cash
settlement made at each renewal without physical delivery of securities.
Moreover, the transaction may be preceded by a firm commitment agreement
pursuant to which a fund agrees to buy a security on a future date.




A dollar roll involves costs to a fund. For example, while a fund receives a fee
as consideration for agreeing to repurchase the security, a fund forgoes the
right to receive all principal and interest payments while the counterparty
holds the security. These payments to the counterparty may exceed the fee
received by a fund, thereby effectively charging a fund interest on its
borrowing. Further, although a fund can estimate the amount of expected
principal prepayment over the term of the dollar roll, a variation in the actual
amount of prepayment could increase or decrease the cost of a fund's borrowing.


The entry into dollar rolls involves potential risks of loss that are different
from those related to the securities underlying the transactions. For example,
if the counterparty becomes insolvent, a fund's right to purchase from the
counterparty might be restricted. Additionally, the value of such securities may
change adversely before a fund is able to purchase them. Similarly, a fund may
be required to purchase securities in connection with a dollar roll at a higher
price than may otherwise be available on the open market. Since, as noted above,
the counterparty is required to deliver a similar, but not identical security to
a fund, the security that a fund is required to buy under the dollar roll may be
worth less than an identical security. Finally, there can be no assurance that a
fund's use of the cash that it receives from a dollar roll will provide a return
that exceeds borrowing costs.


Equity Equivalents. In addition to investing in common stocks, the fund may
invest in other equity securities and equity equivalents, including securities
that permit the fund to receive an equity interest in an issuer, the opportunity
to acquire an equity interest in an issuer or the opportunity to receive a
return on its investment that permits the Fund to benefit from the growth over
time in the equity of an issuer. Examples of equity securities and equity
security equivalents include preferred stock, convertible preferred stock and
convertible debt securities.

The fund will limit its holdings of convertible debt securities to those that,
at the time of purchase, are rated at least B- by Standard & Poor's ("S&P"), a
division of the McGraw-Hill Companies, Inc., or B3 by Moody's Investors Service
("Moody's"), or, if not rated by S&P and Moody's, are of equivalent investment
quality as determined by the Advisor. Debt securities rated below the four
highest categories are not considered investment-grade obligations. These
securities have speculative characteristics and present more credit risk than
investment-grade obligations.

Equity equivalents also may include securities whose value or return is derived
from the value or return of a different security.

Eurodollar Instruments. A fund may make investments in Eurodollar instruments
for hedging purposes or to enhance potential gain. Eurodollar instruments are US
dollar-denominated futures contracts or options thereon which are linked to the
London Interbank Offered Rate ("LIBOR"), although foreign currency-denominated
instruments are available from time to time. Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of funds and sellers to obtain
a fixed rate for borrowings. A fund might use Eurodollar futures contracts and
options thereon to hedge against changes in LIBOR, to which many interest rate
swaps and fixed income instruments are linked.


Eurodollar Obligations. Eurodollar bank obligations are US dollar-denominated
certificates of deposit and time deposits issued outside the US capital markets
by foreign branches of US banks and US branches of foreign banks. Eurodollar
obligations are subject to the same risks that pertain to domestic issues,
notably credit risk, market risk and liquidity risk. Additionally, Eurodollar
obligations are subject to certain sovereign risks.

Foreign Currencies. Because investments in foreign securities will usually
involve currencies of foreign countries, and because a fund may hold foreign
currencies and forward foreign currency exchange contracts ("forward
contracts"), futures contracts and options on futures contracts on foreign
currencies, the value of the assets of a fund as measured in US dollars may be
affected favorably or unfavorably by changes in foreign currency exchange rates
and exchange control regulations, and a fund may incur costs in connection with
conversions between various currencies.

The strength or weakness of the US dollar against these currencies is
responsible for part of a fund's investment performance. If the dollar falls in
value relative to the Japanese yen, for example, the dollar value of a Japanese
stock held in the portfolio will rise even though the price of the stock in yen
remains unchanged. Conversely, if the dollar rises in value relative to the yen,
the dollar value of the Japanese stock will fall. Many foreign currencies have
experienced significant devaluation relative to the dollar.

Although a fund values its assets daily in terms of US dollars, it does not
intend to convert its holdings of foreign currencies into US dollars on a daily
basis. It will do so from time to time, and investors should be aware of the
costs of currency conversion. Although foreign exchange dealers do not charge a
fee for conversion, they do realize a profit based on the difference (the
"spread") between the prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to a fund at one
rate, while offering a lesser rate of exchange should a fund desire to resell
that currency to the dealer. A fund will conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, or through entering into forward contracts
(or options thereon) to purchase or sell foreign currencies. (See "Strategic
Transactions and Derivatives" below.)

Foreign Fixed Income Securities. Because most foreign fixed income securities
are not rated, a fund will invest in foreign fixed income securities based on
the Advisor's analysis without relying on published ratings. Since such
investments will be based upon the Advisor's analysis rather than upon published
ratings, achievement of a fund's goals may depend more upon the abilities of the
underlying funds' advisor than would otherwise be the case.

The value of the foreign fixed income securities held by a fund, and thus the
net asset value of a fund's shares, generally will fluctuate with (a) changes in
the perceived creditworthiness of the issuers of those securities, (b) movements
in interest rates, and (c) changes in the relative values of the currencies in
which a fund's investments in fixed income securities are denominated with
respect to the US Dollar. The extent of the fluctuation will depend on various
factors, such as the average maturity of a fund's investments in foreign fixed
income securities, and the extent to which a fund hedges its interest rate,
credit and currency exchange rate risks. A longer average maturity generally is
associated with a higher level of volatility in the market value of such
securities in response to changes in market conditions.

Investments in sovereign debt, including Brady Bonds, involve special risks.
Brady Bonds are debt securities issued under a plan implemented to allow debtor
nations to restructure their outstanding commercial bank indebtedness. Foreign
governmental issuers of debt or the governmental authorities that control the
repayment of the debt may be unable or unwilling to repay principal or pay
interest when due. In the event of default, there may be limited or no legal
recourse in that, generally, remedies for defaults must be pursued in the courts
of the defaulting party. Political conditions, especially a sovereign entity's
willingness to meet the terms of its fixed income securities, are of
considerable significance. Also, there can be no assurance that the holders of
commercial bank loans to the same sovereign entity may not contest payments to
the holders of sovereign debt in the event of default under commercial bank loan
agreements. In addition, there is no bankruptcy proceeding with respect to
sovereign debt on which a sovereign has defaulted, and a fund may be unable to
collect all or any part of its investment in a particular issue. Foreign
investment in certain sovereign debt is restricted or controlled to varying
degrees, including requiring governmental approval for the repatriation of
income, capital or proceed of sales by foreign investors. These restrictions or
controls may at times limit or preclude foreign investment in certain sovereign
debt or increase the costs and expenses of a fund. Sovereign debt may be issued
as part of debt restructuring and such debt is to be considered speculative.
There is a history of defaults with respect to commercial bank loans by public
and private entities issuing Brady Bonds. All or a portion of the interest
payments and/or principal repayment with respect to Brady Bonds may be
uncollateralized.


Foreign Government Securities. The foreign government securities in which a fund
may invest generally consist of debt obligations issued or guaranteed by
national, state or provincial governments or similar political subdivisions. A
fund may invest in foreign government securities in the form of American
Depository Receipts. Foreign government securities also include debt securities
of supranational entities. Quasi-governmental and supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Examples include the International
Bank for Reconstruction and Development (the "World Bank"), the Japanese
Development Bank, the Asian Development Bank and the InterAmerican Development
Bank. Foreign government securities also include mortgage-related securities
issued or guaranteed by national, state or provincial governmental
instrumentalities, including quasi-governmental agencies.


Foreign Investment. Foreign securities are normally denominated and traded in
foreign currencies. As a result, the value of a fund's foreign investments and
the value of its shares may be affected favorably or unfavorably by changes in
currency exchange rates relative to the US dollar. There may be less information
publicly available about a foreign issuer than about a US issuer, and foreign
issuers may not be subject to accounting, auditing and financial reporting
standards and practices comparable to those in the US. The securities of some
foreign issuers are less liquid and at times more volatile than securities of
comparable US issuers. Foreign brokerage commissions and other fees are also
generally higher than in the US. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in payment or delivery of
securities or in the recovery of a fund's assets held abroad) and expenses not
present in the settlement of investments in US markets. Payment for securities
without delivery may be required in certain foreign markets.

In addition, foreign securities may be subject to the risk of nationalization or
expropriation of assets, imposition of currency exchange controls or
restrictions on the repatriation of foreign currency, confiscatory taxation,
political or financial instability and diplomatic developments which could
affect the value of a fund's investments in certain foreign countries.
Governments of many countries have exercised and continue to exercise
substantial influence over many aspects of the private sector through the
ownership or control of many companies, including some of the largest in these
countries. As a result, government actions in the future could have a
significant effect on economic conditions which may adversely affect prices of
certain portfolio securities. There is also generally less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the US. Dividends or interest on, or proceeds from the sale of, foreign
securities may be subject to foreign withholding taxes, and special US federal
income tax considerations may apply. Moreover, foreign economies may differ
favorably or unfavorably from the US economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.

Legal remedies available to investors in certain foreign countries may be more
limited than those available with respect to investments in the US or in other
foreign countries. The laws of some foreign countries may limit the fund's
ability to invest in securities of certain issuers organized under the laws of
those foreign countries.

Of particular importance, many foreign countries are heavily dependent upon
exports, particularly to developed countries, and, accordingly, have been and
may continue to be adversely affected by trade barriers, managed adjustments in
relative currency values, and other protectionist measures imposed or negotiated
by the US and other countries with which they trade. These economies also have
been and may continue to be negatively impacted by economic conditions in the US
and other trading partners, which can lower the demand for goods produced in
those countries.

The risks described above, including the risks of nationalization or
expropriation of assets, typically are increased in connection with investments
in "emerging markets." For example, political and economic structures in these
countries may be in their infancy and developing rapidly, and such countries may
lack the social, political and economic stability characteristic of more
developed countries (including amplified risk of war and terrorism). Certain of
these countries have in the past failed to recognize private property rights and
have at times nationalized and expropriated the assets of private companies.
Investments in emerging markets may be considered speculative.

The currencies of certain emerging market countries have experienced
devaluations relative to the US dollar, and future devaluations may adversely
affect the value of assets denominated in such currencies. In addition, currency
hedging techniques may be unavailable in certain emerging market countries. Many
emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation or deflation for many years, and future
inflation may adversely affect the economies and securities markets of such
countries.

In addition, unanticipated political or social developments may affect the value
of investments in emerging markets and the availability of additional
investments in these markets. Any change in the leadership or politics of
emerging market countries, or the countries that exercise a significant
influence over those countries, may halt the expansion of or reverse the
liberalization of foreign investment policies now occurring and adversely affect
existing investment opportunities. The small size, limited trading volume and
relative inexperience of the securities markets in these countries may make
investments in securities traded in emerging markets illiquid and more volatile
than investments in securities traded in more developed countries. For example,
limited market size may cause prices to be unduly influenced by traders who
control large positions. In addition, the fund may be required to establish
special custodial or other arrangements before making investments in securities
traded in emerging markets. There may be little financial or accounting
information available with respect to issuers of emerging market securities, and
it may be difficult as a result to assess the value of prospects of an
investment in such securities.

The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for a fund's securities in such markets may
not be readily available. A fund may suspend redemption of its shares for any
period during which an emergency exists, as determined by the SEC. Accordingly
if a fund believes that appropriate circumstances exist, it will promptly apply
to the SEC for a determination that an emergency is present. During the period
commencing from a fund's identification of such condition until the date of the
SEC action, a fund's securities in the affected markets will be valued at fair
value determined in good faith by or under the direction of a fund's Board.

High Yield/High Risk Bonds. A fund may also purchase debt securities which are
rated below investment-grade (commonly referred to as "junk bonds"), that is,
rated below Baa by Moody's or below BBB by S&P and unrated securities judged to
be of equivalent quality as determined by the underlying fund's advisor. These
securities usually entail greater risk (including the possibility of default or
bankruptcy of the issuers of such securities), generally involve greater
volatility of price and risk to principal and income, and may be less liquid,
than securities in the higher rating categories. The lower the ratings of such
debt securities, the more their risks render them like equity securities.
Securities rated D may be in default with respect to payment of principal or
interest.

Issuers of such high yield securities often are highly leveraged and may not
have available to them more traditional methods of financing. Therefore, the
risk associated with acquiring the securities of such issuers generally is
greater than is the case with higher rated securities. For example, during an
economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of high yield securities may experience financial stress.
During such periods, such issuers may not have sufficient revenues to meet their
interest payment obligations. The issuer's ability to service its debt
obligations may also be adversely affected by specific corporate developments,
or the issuer's inability to meet specific projected business forecasts, or the
unavailability of additional financing. The risk of loss from default by the
issuer is significantly greater for the holders of high yield securities because
such securities are generally unsecured and are often subordinated to other
creditors of the issuer. Prices and yields of high yield securities will
fluctuate over time and, during periods of economic uncertainty, volatility of
high yield securities may adversely affect a fund's net asset value. In
addition, investments in high yield zero coupon or pay-in-kind bonds, rather
than income-bearing high yield securities, may be more speculative and may be
subject to greater fluctuations in value due to changes in interest rates.

A fund may have difficulty disposing of certain high yield securities because
they may have a thin trading market. Because not all dealers maintain markets in
all high yield securities, a fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. The lack of a
liquid secondary market may have an adverse effect on the market price and a
fund's ability to dispose of particular issues and may also make it more
difficult for a fund to obtain accurate market quotations for purposes of
valuing a fund's assets. Market quotations generally are available on many high
yield issues only from a limited number of dealers and may not necessarily
represent firm bids of such dealers or prices for actual sales. Adverse
publicity and investor perceptions may decrease the values and liquidity of high
yield securities. These securities may also involve special registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties.

Credit quality in the high-yield securities market can change suddenly and
unexpectedly, and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield security. For these reasons, it is
generally the policy of the underlying fund's advisor (or subadvisor) not to
rely exclusively on ratings issued by established credit rating agencies, but to
supplement such ratings with its own independent and on-going review of credit
quality. The achievement of a fund's investment objective by investment in such
securities may be more dependent on the underlying fund's advisor's credit
analysis than is the case for higher quality bonds. Should the rating of a
portfolio security be downgraded, the underlying fund's advisor will determine
whether it is in the best interests of a fund to retain or dispose of such
security.

Prices for high-yield securities may be affected by legislative and regulatory
developments. Also, Congress has from time to time considered legislation which
would further restrict or eliminate the federal income tax deduction for
interest payments on these securities and regulate corporate restructurings.
Such legislation may significantly depress the prices of outstanding securities
of this type.

A portion of the high-yield securities acquired by a fund will be purchased upon
issuance, which may involve special risks because the securities so acquired are
new issues. In such instances a fund may be a substantial purchaser of the issue
and therefore have the opportunity to participate in structuring the terms of
the offering. Although this may enable a fund to seek to protect itself against
certain of such risks, the considerations discussed herein would nevertheless
remain applicable.



Illiquid Securities and Restricted Securities. A fund may purchase securities
that are subject to legal or contractual restrictions on resale ("restricted
securities"). Generally speaking, restricted securities may be sold (i) only to
qualified institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers; (iii) in limited quantities after they have been
held for a specified period of time and other conditions are met pursuant to an
exemption from registration; or (iv) in a public offering for which a
registration statement is in effect under the 1933 Act. Issuers of restricted
securities may not be subject to the disclosure and other investor protection
requirements that would be applicable if their securities were publicly traded.

Restricted securities are often illiquid, but they may also be liquid. For
example, restricted securities that are eligible for resale under Rule 144A are
often deemed to be liquid.

Each fund's Board has approved guidelines for use by its advisor in determining
whether a security is liquid or illiquid. Among the factors an advisor may
consider in reaching liquidity decisions relating to Rule 144A securities are:
(1) the frequency of trades and quotes for the security; (2) the number of
dealers wishing to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the market for the security
(i.e., the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of the transfer. Issuers of restricted securities may
not be subject to the disclosure and other investor protection requirement that
would be applicable if their securities were publicly traded. Where a
registration statement is required for the resale of restricted securities, a
fund may be required to bear all or part of the registration expenses. A fund
may be deemed to be an "underwriter" for purposes of the 1933 Act, when selling
restricted securities to the public and, in such event, a fund may be liable to
purchasers of such securities if the registration statement prepared by the
issuer is materially inaccurate or misleading.

A fund may also purchase securities that are not subject to legal or contractual
restrictions on resale, but that are deemed illiquid. Such securities may be
illiquid, for example, because there is a limited trading market for them.

A fund may be unable to sell a restricted or illiquid security. In addition, it
may be more difficult to determine a market value for restricted or illiquid
securities. Moreover, if adverse market conditions were to develop during the
period between a fund's decision to sell a restricted or illiquid security and
the point at which a fund is permitted or able to sell such security, a fund
might obtain a price less favorable than the price that prevailed when it
decided to sell.


Inflation-Indexed Bonds. A fund may purchase inflation-indexed securities issued
by the US Treasury, US government agencies and instrumentalities other than the
US Treasury, and entities other than the US Treasury or US government agencies
and instrumentalities.

Inflation-indexed bonds are fixed income securities or other instruments whose
principal value is periodically adjusted according to the rate of inflation. Two
structures are common. The US Treasury and some other issuers use a structure
that accrues inflation on either a current or lagged basis into the principal
value of the bond. Most other issuers pay out the price index accruals as part
of a semi-annual coupon.

Inflation-indexed securities issued by the US Treasury have maturities of five,
ten or twenty years, although it is possible that securities with other
maturities will be issued in the future. The US Treasury securities pay interest
on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted
principal amount. For example, if a fund purchased an inflation-indexed bond
with a par value of $1,000 and a 3% real rate of return coupon (payable 1.5%
semi-annually), and calculated inflation over the first six months was 1%, the
mid-year value of the bond would be $1,010 and the first semi-annual interest
payment would be $15.15 ($1,010 times 1.5%). If calculated inflation during the
second half of the year resulted in the whole year's inflation equaling 3%, the
end of year value of the bond would be $1,030 and the second semi-annual
interest payment would be $15.45 ($1,030 times 1.5%).

If the periodic adjustment rate measuring inflation falls, the principal value
of inflation-indexed bonds will be adjusted downward, and, consequently, the
interest payable on these securities (calculated with respect to a smaller
principal amount) will be reduced. Repayment of the original bond principal on
maturity (as adjusted for inflation) is guaranteed in the case of US Treasury
inflation-indexed bonds, even during a period of deflation. However, the current
market value of the bonds is not guaranteed and will fluctuate. A fund may also
invest in other inflation related bonds that may or may not provide a similar
guarantee. If a guarantee of principal is not provided, the adjusted principal
value of the bond repaid at maturity may be less than the original principal. In
addition, if a fund purchases inflation-indexed bonds offered by foreign
issuers, the rate of inflation measured by the foreign inflation index may not
be correlated to the rate of inflation in the US.

The value of inflation-indexed bonds is expected to change in response to
changes in real interest rates. Real interest rates, in turn, are tied to the
relationship between nominal interest rates and the rate of inflation.
Therefore, if inflation were to rise at a faster rate than nominal interest
rates, real interest rates might decline, leading to an increase in value of
inflation-indexed bonds. In contrast, if nominal interest rates increased at a
faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds. There can be no assurance,
however, that the value of inflation-indexed bonds will be directly correlated
to changes in interest rates.

While these securities are expected to be protected from long-term inflationary
trends, short-term increases in inflation may lead to a decline in value. If
interest rates rise due to reasons other than inflation (for example, due to
changes in currency exchange rates), investors in these securities may not be
protected to the extent that the increase is not reflected in the bond's
inflation measure.

In general, the measure used to determine the periodic adjustment of US
inflation-indexed bonds is the Consumer Price Index for Urban Consumers
("CPI-U"), which is calculated monthly by the US Bureau of Labor Statistics. The
CPI-U is a measurement of changes in the cost of living, made up of components
such as housing, food, transportation and energy. The inflation adjustment to
the securities references this index with a three month lag.

Inflation-indexed bonds issued by a foreign government are generally adjusted to
reflect a comparable inflation index calculate by the applicable government.
There can be no assurance that the CPI-U or any foreign inflation index will
accurately measure the real rate of inflation in the prices of goods and
services. Moreover, there can be no assurance that the rate of inflation in a
foreign country will be correlated to the rate of inflation in the US.

The taxation of inflation-indexed US Treasury securities is similar to the
taxation of conventional bonds. Both interest payments and the difference
between original principal and the inflation-adjusted principal will be treated
as interest income subject to taxation. Interest payments are taxable when
received or accrued. The inflation adjustment to the principal is subject to tax
in the year the adjustment is made, not at maturity of the security when the
cash from the repayment of principal is received. If an upward adjustment has
been made (which typically should happen), investors in non-tax-deferred
accounts will pay taxes on this amount currently. Decreases in the indexed
principal can be deducted only from current or previous interest payments
reported as income and is otherwise carried forward.

Inflation-indexed US Treasury securities therefore have a potential cash flow
mismatch to an investor, because investors must pay taxes on the
inflation-adjusted principal before the repayment of principal is received. It
is possible that, particularly for high income tax bracket investors,
inflation-indexed US Treasury securities would not generate enough income in a
given year to cover the tax liability they could create. This is similar to the
current tax treatment for zero-coupon bonds and other discount securities. If
inflation-indexed US Treasury securities are sold prior to maturity, capital
losses or gains are realized in the same manner as traditional bonds.

Inflation-indexed securities are designed to offer a return linked to inflation,
thereby protecting future purchasing power of the money invested in them.
However, inflation-indexed securities provide this protected return only if held
to maturity. In addition, inflation-indexed securities may not trade at par
value. Real interest rates (the market rate of interest less the anticipated
rate of inflation) change over time as a result of many factors, such as what
investors are demanding as a true value for money. When real rates do change,
inflation-indexed securities prices will be more sensitive to these changes than
conventional bonds, because these securities were sold originally based upon a
real interest rate that is no longer prevailing. Should market expectations for
real interest rates rise, the price of inflation-indexed securities and the
share price of a fund may fall. Investors in a fund should be prepared to accept
not only this share price volatility but also the possible adverse tax
consequences it may cause.

An investment in securities featuring inflation-adjusted principal and/or
interest involves factors not associated with more traditional fixed-principal
securities. Such factors include the possibility that the inflation index may be
subject to significant changes, that changes in the index may or may not
correlate to changes in interest rates generally or changes in other indices, or
that the resulting interest may be greater or less than that payable on other
securities of similar maturities. In the event of sustained deflation, it is
possible that the amount of semiannual interest payments, the inflation-adjusted
principal of the security and the value of the stripped components, will
decrease. If any of these possibilities are realized, a fund's net asset value
could be negatively affected.

Integrated Global Alpha Platform Strategy ("iGAP Strategy"). In addition to the
Portfolio's main investment strategy, the Advisor seeks to enhance returns by
employing a global tactical asset allocation overlay strategy. The global
tactical asset allocation strategy, which the Advisor calls iGAP, is a total
return strategy designed to add value by benefiting from short-term mis-pricings
within global equity, bond and currency markets. iGAP is expected to have a low
correlation to the performance of underlying DWS funds. The strategy will not be
used until the Portfolio obtains the minimum net asset requirement of $50
million. DWS Inflation Protected Plus Fund and DWS Floating Rate Plus Fund also
currently employ the iGAP strategy.

The iGAP Strategy combines diverse macro investment views from various
investment teams within Deutsche Asset Management. Because a single investment
approach rarely works in all market conditions, the teams are chosen to
diversify investment approaches thereby enhancing the expected return for a
given level of risk. The collective views are then used to determine iGAP's
positions using a disciplined, risk managed process. The result is a collection
of long and short investment positions within global equity, bond and currency
markets designed to generate excess returns that have little correlation to
major markets. The equity, bond and currency positions are then implemented by
the iGAP portfolio managers using futures and forward contracts. The iGAP
portfolio managers consider factors such as liquidity, cost, margin requirement
and credit quality when selecting the appropriate derivative or other
instrument. When used as a part of the iGAP Strategy, derivatives and other
instruments generally will not be used for hedging purposes.

For a more detailed discussion of the characteristics and risks of derivatives
and other instruments used in connection with the iGAP Strategy, see "Strategic
Transactions and Derivatives."

Investment of Uninvested Cash Balances. A fund may have cash balances that have
not been invested in portfolio securities ("Uninvested Cash"). Uninvested Cash
may result from a variety of sources, including dividends or interest received
from portfolio securities, unsettled securities transactions, reserves held for
investment strategy purposes, assets to cover a fund's open futures and other
derivatives positions, scheduled maturity of investments, liquidation of
investment securities to meet anticipated redemptions and dividend payments, and
new cash received from investors. Uninvested Cash may be invested directly in
money market instruments or other short-term debt obligations. A fund may use
Uninvested Cash to purchase shares of affiliated money market funds or shares of
Cash Management QP Trust, or other entities for which the Advisor may act as
investment advisor now or in the future that operate as cash management
investment vehicles but are excluded from the definition of "investment company"
pursuant to Section 3(c)(1) or 3(c)(7) of the 1940 Act (collectively, the
"Central Funds"), provided that any Central Fund will operate in accordance with
Rule 2a-7 under the 1940 Act. Investments in such cash management vehicles may
exceed the limits of Rule 12(d)(1)(A).


Interfund Borrowing and Lending Program. Each fund has received exemptive relief
from the SEC, which permits the funds to participate in an interfund-lending
program among certain investment companies advised by the Advisor. The
interfund-lending program allows the participating funds to borrow money from
and loan money to each other for temporary or emergency purposes. The program is
subject to a number of conditions designed to ensure fair and equitable
treatment of all participating funds, including the following: (1) no fund may
borrow money through the program unless it receives a more favorable interest
rate than a rate approximating the lowest interest rate at which bank loans
would be available to any of the participating funds under a loan agreement; and
(2) no fund may lend money through the program unless it receives a more
favorable return than that available from an investment in repurchase agreements
and, to the extent applicable, money market cash sweep arrangements. In
addition, a fund may participate in the program only if and to the extent that
such participation is consistent with a fund's investment objectives and
policies (for instance, money market funds would normally participate only as
lenders and tax exempt funds only as borrowers). Interfund loans and borrowings
may extend overnight, but could have a maximum duration of seven days. Loans may
be called on one day's notice. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity or
additional costs. The program is subject to the oversight and periodic review of
the Boards of the participating funds. To the extent the funds are actually
engaged in borrowing through the interfund lending program, such borrowings will
comply with each fund's non-fundamental policies.


Inverse Floaters. A Fund may invest in inverse floaters. Inverse floaters are
debt instruments with a floating rate of interest that bears an inverse
relationship to changes in short-term market interest rates. Investments in this
type of security involve special risks as compared to investments in, for
example, a fixed rate municipal security. A Fund could lose money and its NAV
could decline if movements in interest rates are incorrectly anticipated.
Moreover, the markets for securities of this type may be less developed and may
have less liquidity than the markets for more traditional municipal securities.


Investing in Emerging Markets. A fund's investments in foreign securities may be
in developed countries or in countries considered by a fund's advisor to have
developing or "emerging" markets, which involves exposure to economic structures
that are generally less diverse and mature than in the United States, and to
political systems that may be less stable. A developing or emerging market
country can be considered to be a country that is in the initial stages of its
industrialization cycle. Currently, emerging markets generally include every
country in the world other than the United States, Canada, Japan, Australia, New
Zealand, Hong Kong, Singapore and most Western European countries. Currently,
investing in many emerging markets may not be desirable or feasible because of
the lack of adequate custody arrangements for a fund's assets, overly burdensome
repatriation and similar restrictions, the lack of organized and liquid
securities markets, unacceptable political risks or other reasons. As
opportunities to invest in securities in emerging markets develop, a fund may
expand and further broaden the group of emerging markets in which it invests. In
the past, markets of developing or emerging market countries have been more
volatile than the markets of developed countries; however, such markets often
have provided higher rates of return to investors. The advisor believes that
these characteristics may be expected to continue in the future.

Most emerging securities markets have substantially less volume and are subject
to less governmental supervision than US securities markets. Securities of many
issuers in emerging markets may be less liquid and more volatile than securities
of comparable domestic issuers. In addition, there is less regulation of
securities exchanges, securities dealers, and listed and unlisted companies in
emerging markets than in the US.

Emerging markets also have different clearance and settlement procedures, and in
certain markets there have been times when settlements have not kept pace with
the volume of securities transactions. Delays in settlement could result in
temporary periods when a portion of the assets of a fund is uninvested and no
return is earned thereon. The inability of a fund to make intended security
purchases due to settlement problems could cause a fund to miss attractive
investment opportunities. Inability to dispose of portfolio securities due to
settlement problems could result either in losses to a fund due to subsequent
declines in value of the portfolio security or, if a fund has entered into a
contract to sell the security, could result in possible liability to the
purchaser. Costs associated with transactions in foreign securities are
generally higher than costs associated with transactions in US securities. Such
transactions also involve additional costs for the purchase or sale of foreign
currency.

Certain emerging markets require prior governmental approval of investments by
foreign persons, limit the amount of investment by foreign persons in a
particular company, limit the investment by foreign persons only to a specific
class of securities of a company that may have less advantageous rights than the
classes available for purchase by domiciliaries of the countries and/or impose
additional taxes on foreign investors. Certain emerging markets may also
restrict investment opportunities in issuers in industries deemed important to
national interest.

Certain emerging markets may require governmental approval for the repatriation
of investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if a deterioration occurs in an emerging market's
balance of payments or for other reasons, a country could impose temporary
restrictions on foreign capital remittances. A fund could be adversely affected
by delays in, or a refusal to grant, any required governmental approval for
repatriation of capital, as well as by the application to a fund of any
restrictions on investments.

In the course of investment in emerging markets, a fund will be exposed to the
direct or indirect consequences of political, social and economic changes in one
or more emerging markets. While a fund will manage its assets in a manner that
will seek to minimize the exposure to such risks, there can be no assurance that
adverse political, social or economic changes will not cause a fund to suffer a
loss of value in respect of the securities in a fund's portfolio.

The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for a fund's securities in such markets may
not be readily available. A fund may suspend redemption of its shares for any
period during which an emergency exists, as determined by the SEC. Accordingly
if a fund believes that appropriate circumstances exist, it will promptly apply
to the SEC for a determination that an emergency is present. During the period
commencing from a fund's identification of such condition until the date of the
SEC action, a fund's securities in the affected markets will be valued at fair
value determined in good faith by or under the direction of a fund's Board.

Volume and liquidity in most foreign markets are less than in the US, and
securities of many foreign companies are less liquid and more volatile than
securities of comparable US companies. Fixed commissions on foreign securities
exchanges are generally higher than negotiated commissions on US exchanges,
although a fund endeavors to achieve the most favorable net results on its
portfolio transactions. There is generally less government supervision and
regulation of business and industry practices, securities exchanges, brokers,
dealers and listed companies than in the US. Mail service between the US and
foreign countries may be slower or less reliable than within the US, thus
increasing the risk of delayed settlements of portfolio transactions or loss of
certificates for certificated portfolio securities. In addition, with respect to
certain emerging markets, there is the possibility of expropriation or
confiscatory taxation, political or social instability, or diplomatic
developments which could affect a fund's investments in those countries.
Moreover, individual emerging market economies may differ favorably or
unfavorably from the US economy in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position.

A fund may have limited legal recourse in the event of a default with respect to
certain debt obligations it holds. If the issuer of a fixed-income security
owned by a fund defaults, a fund may incur additional expenses to seek recovery.
Debt obligations issued by emerging market country governments differ from debt
obligations of private entities; remedies from defaults on debt obligations
issued by emerging market governments, unlike those on private debt, must be
pursued in the courts of the defaulting party itself. A fund's ability to
enforce its rights against private issuers may be limited. The ability to attach
assets to enforce a judgment may be limited. Legal recourse is therefore
somewhat diminished. Bankruptcy, moratorium and other similar laws applicable to
private issuers of debt obligations may be substantially different from those of
other countries. The political context, expressed as an emerging market
governmental issuer's willingness to meet the terms of the debt obligation, for
example, is of considerable importance. In addition, no assurance can be given
that the holders of commercial bank debt may not contest payments to the holders
of debt obligations in the event of default under commercial bank loan
agreements.

Income from securities held by a fund could be reduced by a withholding tax at
the source or other taxes imposed by the emerging market countries in which a
fund makes its investments. A fund's net asset value may also be affected by
changes in the rates or methods of taxation applicable to a fund or to entities
in which a fund has invested. The Advisor will consider the cost of any taxes in
determining whether to acquire any particular investments, but can provide no
assurance that the taxes will not be subject to change.

Many emerging markets have experienced substantial, and, in some periods,
extremely high rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain emerging market
countries. In an attempt to control inflation, wage and price controls have been
imposed in certain countries. Of these countries, some, in recent years, have
begun to control inflation through prudent economic policies.

Emerging market governmental issuers are among the largest debtors to commercial
banks, foreign governments, international financial organizations and other
financial institutions. Certain emerging market governmental issuers have not
been able to make payments of interest on or principal of debt obligations as
those payments have come due. Obligations arising from past restructuring
agreements may affect the economic performance and political and social
stability of those issuers.

Governments of many emerging market countries have exercised and continue to
exercise substantial influence over many aspects of the private sector through
the ownership or control of many companies, including some of the largest in any
given country. As a result, government actions in the future could have a
significant effect on economic conditions in emerging markets, which in turn,
may adversely affect companies in the private sector, general market conditions
and prices and yields of certain of the securities in a fund's portfolio.
Expropriation, confiscatory taxation, nationalization, political, economic or
social instability or other similar developments have occurred frequently over
the history of certain emerging markets and could adversely affect a fund's
assets should these conditions recur.

The ability of emerging market country governmental issuers to make timely
payments on their obligations is likely to be influenced strongly by the
issuer's balance of payments, including export performance, and its access to
international credits and investments. An emerging market whose exports are
concentrated in a few commodities could be vulnerable to a decline in the
international prices of one or more of those commodities. Increased
protectionism on the part of an emerging market's trading partners could also
adversely affect the country's exports and diminish its trade account surplus,
if any. To the extent that emerging markets receive payment for its exports in
currencies other than dollars or non-emerging market currencies, its ability to
make debt payments denominated in dollars or non-emerging market currencies
could be affected.

Another factor bearing on the ability of emerging market countries to repay debt
obligations is the level of international reserves of the country. Fluctuations
in the level of these reserves affect the amount of foreign exchange readily
available for external debt payments and thus could have a bearing on the
capacity of emerging market countries to make payments on these debt
obligations.

To the extent that an emerging market country cannot generate a trade surplus,
it must depend on continuing loans from foreign governments, multilateral
organizations or private commercial banks, aid payments from foreign governments
and inflows of foreign investment. The access of emerging markets to these forms
of external funding may not be certain, and a withdrawal of external funding
could adversely affect the capacity of emerging market country governmental
issuers to make payments on their obligations. In addition, the cost of
servicing emerging market debt obligations can be affected by a change in
international interest rates since the majority of these obligations carry
interest rates that are adjusted periodically based upon international rates.

Investment Company Securities. A fund may acquire securities of other investment
companies to the extent consistent with its investment objective and the
limitations of the 1940 Act. Each Underlying DWS Fund that makes its shares
available to other DWS funds pursuant to a "fund-of-funds" arrangement has
adopted a non-fundamental policy that prohibits it from investing in other
investment companies in reliance on Sections 12(d)(1)(G) or 12(d)(1)(F). A fund
will indirectly bear its proportionate share of any management fees and other
expenses paid by such other investment companies.


For example, a fund may invest in a variety of investment companies which seek
to track the composition and performance of specific indexes or a specific
portion of an index. These index-based investments hold substantially all of
their assets in securities representing their specific index. Accordingly, the
main risk of investing in index-based investments is the same as investing in a
portfolio of equity securities comprising the index. The market prices of
index-based investments will fluctuate in accordance with both changes in the
market value of their underlying portfolio securities and due to supply and
demand for the instruments on the exchanges on which they are traded (which may
result in their trading at a discount or premium to their net asset values).
Index-based investments may not replicate exactly the performance of their
specified index because of transaction costs and because of the temporary
unavailability of certain component securities of the index.


Examples of index-based investments include:

SPDRs(R): SPDRs, an acronym for "Standard & Poor's Depositary Receipts," are
based on the S&P 500 Composite Stock Price Index. They are issued by the SPDR
Trust, a unit investment trust that holds shares of substantially all the
companies in the S&P 500 in substantially the same weighting and seeks to
closely track the price performance and dividend yield of the Index.

MidCap SPDRs(R): MidCap SPDRs are based on the S&P MidCap 400 Index. They are
issued by the MidCap SPDR Trust, a unit investment trust that holds a portfolio
of securities consisting of substantially all of the common stocks in the S&P
MidCap 400 Index in substantially the same weighting and seeks to closely track
the price performance and dividend yield of the Index.

Select Sector SPDRs(R): Select Sector SPDRs are based on a particular sector or
group of industries that are represented by a specified Select Sector Index
within the Standard & Poor's Composite Stock Price Index. They are issued by The
Select Sector SPDR Trust, an open-end management investment company with nine
portfolios that each seeks to closely track the price performance and dividend
yield of a particular Select Sector Index.

DIAMONDS(SM): DIAMONDS are based on the Dow Jones Industrial Average(SM). They
are issued by the DIAMONDS Trust, a unit investment trust that holds a portfolio
of all the component common stocks of the Dow Jones Industrial Average and seeks
to closely track the price performance and dividend yield of the Dow.

Nasdaq-100 Shares: Nasdaq-100 Shares are based on the Nasdaq 100 Index. They are
issued by the Nasdaq-100 Trust, a unit investment trust that holds a portfolio
consisting of substantially all of the securities, in substantially the same
weighting, as the component stocks of the Nasdaq-100 Index and seeks to closely
track the price performance and dividend yield of the Index.

Investment-Grade Bonds. When the Advisor believes that it is appropriate to do
so in order to achieve a fund's objectives, a fund may purchase
"investment-grade" bonds, which are those rated Aaa, Aa, A or Baa by Moody's or
AAA, AA, A or BBB by S&P or, if unrated, judged to be of equivalent quality as
determined by the Advisor. Moody's considers bonds it rates Baa to have
speculative elements as well as investment-grade characteristics. To the extent
that a fund invests in higher-grade securities, a fund will not be able to avail
itself of opportunities for higher income which may be available at lower
grades.

The principal risks involved with investments in bonds include interest rate
risk, credit risk and pre-payment risk. Interest rate risk refers to the likely
decline in the value of bonds as interest rates rise. Generally, longer-term
securities are more susceptible to changes in value as a result of interest-rate
changes than are shorter-term securities. Credit risk refers to the risk that an
issuer of a bond may default with respect to the payment of principal and
interest. The lower a bond is rated, the more it is considered to be a
speculative or risky investment. Pre-payment risk is commonly associated with
pooled debt securities, such as mortgage-backed securities and asset backed
securities, but may affect other debt securities as well. When the underlying
debt obligations are prepaid ahead of schedule, the return on the security will
be lower than expected. Pre-payment rates usually increase when interest rates
are falling.


IPO Risk. Securities issued through an initial public offering (IPO) can
experience an immediate drop in value if the demand for the securities does not
continue to support the offering price. Information about the issuers of IPO
securities is also difficult to acquire since they are new to the market and may
not have lengthy operating histories. A fund may engage in short-term trading in
connection with its IPO investments, which could produce higher trading costs
and adverse tax consequences. The number of securities issued in an IPO is
limited, so it is likely that IPO securities will represent a smaller component
of a fund's portfolio as the fund's assets increase (and thus have a more
limited effect on the fund's performance).

Lending of Portfolio Securities. A fund may lend its investment securities to
approved institutional borrowers who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. By lending its
investment securities, a fund attempts to increase its net investment income
through the receipt of interest on the loan. Any gain or loss in the market
price of the securities loaned that might occur during the term of the loan
would belong to a fund. A fund may lend its investment securities so long as the
terms, structure and the aggregate amount of such loans are not inconsistent
with the 1940 Act or the rules and regulations or interpretations of the SEC
thereunder, which currently require, among other things, that (a) the borrower
pledge and maintain with a fund collateral consisting of liquid, unencumbered
assets having a value at all times not less than 100% of the value of the
securities loaned, (b) the borrower add to such collateral whenever the price of
the securities loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by a fund at any time, and
(d) a fund receives reasonable interest on the loan (which may include a fund
investing any cash collateral in interest bearing short-term investments), and
distributions on the loaned securities and any increase in their market value. A
fund will bear any losses incurred from the investment of the collateral it
receives. There may be risks of delay in recovery of the securities or even loss
of rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers selected by a fund's
delegate after a commercially reasonable review of relevant facts and
circumstances, including the creditworthiness of the borrower.

A fund may pay negotiated fees in connection with loaned securities, pursuant to
written contracts. In addition, voting rights may pass with the loaned
securities, but if a material event occurs affecting an investment on loan, the
loan must be called and the securities voted. Pursuant to an exemptive order
granted by the SEC, cash collateral received by a fund may be invested in a
money market fund managed by the Advisor (or one of its affiliates).


Micro-Cap Companies. While, historically, micro-capitalization company stocks
have outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. There can be no assurance that this will
continue to be true in the future. Micro-capitalization companies may have
limited product lines, markets or financial resources; may lack management depth
or experience; and may be more vulnerable to adverse general market or economic
developments than large companies. The prices of micro-capitalization company
securities are often more volatile than prices associated with large company
issues, and can display abrupt or erratic movements at times, due to limited
trading volumes and less publicly available information.


Mortgage-Backed Securities and Mortgage Pass-Through Securities. Mortgage-backed
securities are interests in pools of mortgage loans, including mortgage loans
made by savings and loan institutions, mortgage bankers, commercial banks and
others. Pools of mortgage loans are assembled as securities for sale to
investors by various governmental, government-related and private organizations
as further described below. Underlying mortgages may be of a variety of types,
including adjustable rate, conventional 30-year, graduated payment and 15-year.

A decline in interest rates may lead to a faster rate of repayment of the
underlying mortgages, and may expose a fund to a lower rate of return upon
reinvestment. To the extent that such mortgage-backed securities are held by a
fund, the prepayment right will tend to limit to some degree the increase in net
asset value of a fund because the value of the mortgage-backed securities held
by a fund may not appreciate as rapidly as the price of non-callable debt
securities. Mortgage-backed securities are subject to the risk of prepayment and
the risk that the underlying loans will not be repaid. Because principal may be
prepaid at any time, mortgage-backed securities may involve significantly
greater price and yield volatility than traditional debt securities.

When interest rates rise, mortgage prepayment rates tend to decline, thus
lengthening the life of a mortgage-related security and increasing the price
volatility of that security, affecting the price volatility of a fund's shares.

Interests in pools of mortgage-backed securities differ from other forms of debt
securities, which normally provide for periodic payment of interest in fixed
amounts with principal payments at maturity or specified call dates. Instead,
these securities provide a monthly payment which consists of both interest and
principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their mortgage loans, net
of any fees paid to the issuer or guarantor of such securities. Additional
payments are caused by repayments of principal resulting from the sale of the
underlying property, refinancing or foreclosure, net of fees or costs which may
be incurred. Some mortgage-related securities (such as securities issued by
GNMA) are described as "modified pass-through." These securities entitle the
holder to receive all interest and principal payments owed on the mortgage pool,
net of certain fees, at the scheduled payment dates regardless of whether or not
the mortgagor actually makes the payment.

The principal governmental guarantor of mortgage-related securities is GNMA.
GNMA is a wholly owned US Government corporation within the Department of
Housing and Urban Development. GNMA is authorized to guarantee, with the full
faith and credit of the US Government, the timely payment of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers) and backed by
pools of FHA-insured or VA-guaranteed mortgages. These guarantees, however, do
not apply to the market value or yield of mortgage-backed securities or to the
value of fund shares. Also, GNMA securities often are purchased at a premium
over the maturity value of the underlying mortgages. This premium is not
guaranteed and will be lost if prepayment occurs.

Government-related guarantors (i.e., not backed by the full faith and credit of
the US Government) include Fannie Mae and FHLMC. Fannie Mae is a
government-sponsored corporation owned entirely by private stockholders. It is
subject to general regulation by the Secretary of Housing and Urban Development.
Fannie Mae purchases conventional (i.e., not insured or guaranteed by any
government agency) mortgages from a list of approved seller/servicers which
include state and federally chartered savings and loan associations, mutual
savings banks, commercial banks and credit unions and mortgage bankers.
Pass-through securities issued by Fannie Mae are guaranteed as to timely payment
of principal and interest by Fannie Mae but are not backed by the full faith and
credit of the US Government.

FHLMC is a corporate instrumentality of the US Government and was created by
Congress in 1970 for the purpose of increasing the availability of mortgage
credit for residential housing. Its stock is owned by the twelve Federal Home
Loan Banks. FHLMC issues Participation Certificates ("PCs") which represent
interests in conventional mortgages from FHLMC's national portfolio. FHLMC
guarantees the timely payment of interest and ultimate collection of principal,
but PCs are not backed by the full faith and credit of the US Government.

Mortgage-backed securities may be issued or guaranteed by GNMA, FNMA (also known
as Fannie Mae) and FHLMC (also known as Freddie Mac), but also may be issued or
guaranteed by other issuers, including private companies. GNMA is a
government-owned corporation that is an agency of the U.S. Department of Housing
and Urban Development. It guarantees, with the full faith and credit of the
United States, full and timely payment of all monthly principal and interest on
its mortgage-backed securities. Until recently, FNMA and FHLMC were
government-sponsored corporations owned entirely by private stockholders. Both
issue mortgage-related securities that contain guarantees as to timely payment
of interest and principal but that are not backed by the full faith and credit
of the U.S. government. The value of the companies' securities fell sharply in
2008 due to concerns that the firms did not have sufficient capital to offset
losses. In mid-2008, the U.S. Treasury was authorized to increase the size of
home loans that FNMA and FHLMC could purchase in certain residential areas and,
until 2009, to lend FNMA and FHLMC emergency funds and to purchase the
companies' stock. More recently, in September 2008, the U.S. Treasury announced
that FNMA and FHLMC had been placed in conservatorship by the Federal Housing
Finance Agency ("FHFA"), a newly created independent regulator. In addition to
placing the companies in conservatorship, the U.S. Treasury announced three
additional steps that it intended to take with respect to FNMA and FHLMC. First,
the U.S. Treasury has entered into preferred stock purchase agreements ("PSPAs")
under which, if the FHFA determines that FNMA's or FHLMC's liabilities have
exceeded its assets under generally accepted accounting principles, the U.S.
Treasury will contribute cash capital to the company in an amount equal to the
difference between liabilities and assets. The PSPAs are designed to provide
protection to the senior and subordinated debt and the mortgage-backed
securities issued by FNMA and FHLMC. Second, the U.S. Treasury established a new
secured lending credit facility that is available to FNMA and FHLMC until
December 2009. Third, the U.S. Treasury initiated a temporary program to
purchase FNMA and FHLMC mortgage-backed securities, which is expected to
continue until December 2009. No assurance can be given that the U.S. Treasury
initiatives discussed above with respect to the debt and mortgage-backed
securities issued by FNMA and FHLMC will be successful.

Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional mortgage loans. Such issuers may, in
addition, be the originators and/or servicers of the underlying mortgage loans
as well as the guarantors of the mortgage-related securities. Pools created by
such non-governmental issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government or agency guarantees of payments. However, timely payment of interest
and principal of these pools may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit. The insurance and guarantees are issued by governmental
entities, private insurers and the mortgage poolers. Such insurance and
guarantees and the creditworthiness of the issuers thereof will be considered in
determining whether a mortgage-related security meets a fund's investment
quality standards. There can be no assurance that the private insurers or
guarantors can meet their obligations under the insurance policies or guarantee
arrangements. A fund may buy mortgage-related securities without insurance or
guarantees, if through an examination of the loan experience and practices of
the originators/servicers and poolers, the underlying fund's advisor determines
that the securities meet a fund's quality standards. Although the market for
such securities is becoming increasingly liquid, securities issued by certain
private organizations may not be readily marketable.





Participation Interests. A fund may purchase from financial institutions
participation interests in securities in which a fund may invest. A
participation interest gives a fund an undivided interest in the security in the
proportion that a fund's participation interest bears to the principal amount of
the security. These instruments may have fixed, floating or variable interest
rates. If the participation interest is unrated, or has been given a rating
below that which is permissible for purchase by a fund, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank, or the payment obligation otherwise will be collateralized by US
Government securities, or, in the case of unrated participation interest,
determined by the underlying fund's advisor to be of comparable quality to those
instruments in which a fund may invest. For certain participation interests, a
fund will have the right to demand payment, on not more than seven days notice,
for all or any part of a fund's participation interests in the security, plus
accrued interest. As to these instruments, a fund generally intends to exercise
its right to demand payment only upon a default under the terms of the security.

Preferred Stock. Preferred stock has a preference (i.e., ranks higher) in
liquidation (and generally dividends) over common stock but is subordinated
(i.e., ranks lower) in liquidation to fixed income securities. Dividends on
preferred stock may be cumulative, and in such cases, all cumulative dividends
usually must be paid prior to dividend payments to common stockholders. Because
of this preference, preferred stocks generally entail less risk than common
stocks. As a general rule the market value of preferred stocks with fixed
dividend rates and no conversion rights moves inversely with interest rates and
perceived credit risk, with the price determined by the dividend rate. Some
preferred stocks are convertible into other securities (e.g., common stock) at a
fixed price and ratio or upon the occurrence of certain events. The market price
of convertible preferred stocks generally reflects an element of conversion
value. Because many preferred stocks lack a fixed maturity date, these
securities generally fluctuate substantially in value when interest rates
change; such fluctuations often exceed those of long-term bonds of the same
issuer. Some preferred stocks pay an adjustable dividend that may be based on an
index, formula, auction procedure or other dividend rate reset mechanism. In the
absence of credit deterioration, adjustable rate preferred stocks tend to have
more stable market values than fixed rate preferred stocks.

All preferred stocks are also subject to the same types of credit risks as
corporate bonds. In addition, because preferred stock is subordinate to debt
securities and other obligations of an issuer, deterioration in the credit
rating of the issuer will cause greater changes in the value of a preferred
stock than in a more senior debt security with similar yield characteristics.
Preferred stocks may be rated by the Standard & Poor's Division of the
McGraw-Hill Companies ("S&P") and Moody's Investors Service, Inc. ("Moody's")
although there is no minimum rating which a preferred stock must have to be an
eligible investment for a fund. Generally, however, the preferred stocks in
which a fund invests will be rated at least CCC by S&P or Caa by Moody's or, if
unrated, of comparable quality in the opinion of the Advisor. Preferred stocks
rated CCC by S&P are regarded as predominantly speculative with respect to the
issuer's capacity to pay preferred stock obligations and represent the highest
degree of speculation among securities rated between BB and CCC; preferred
stocks rated Caa by Moody's are likely to be in arrears on dividend payments.
Moody's rating with respect to preferred stocks does not purport to indicate the
future status of payments of dividends.


Privatized Enterprises. Investments in foreign securities may include securities
issued by enterprises that have undergone or are currently undergoing
privatization. The governments of certain foreign countries have, to varying
degrees, embarked on privatization programs contemplating the sale of all or
part of their interests in state enterprises. A fund's investments in the
securities of privatized enterprises may include privately negotiated
investments in a government or state-owned or controlled company or enterprise
that has not yet conducted an initial equity offering, investments in the
initial offering of equity securities of a state enterprise or former state
enterprise and investments in the securities of a state enterprise following its
initial equity offering.

In certain jurisdictions, the ability of foreign entities, such as a fund, to
participate in privatizations may be limited by local law, or the price or terms
on which a fund may be able to participate may be less advantageous than for
local investors. Moreover, there can be no assurance that governments that have
embarked on privatization programs will continue to divest their ownership of
state enterprises, that proposed privatizations will be successful or that
governments will not re-nationalize enterprises that have been privatized.

In the case of the enterprises in which a fund may invest, large blocks of the
stock of those enterprises may be held by a small group of stockholders, even
after the initial equity offerings by those enterprises. The sale of some
portion or all of those blocks could have an adverse effect on the price of the
stock of any such enterprise.

Prior to making an initial equity offering, most state enterprises or former
state enterprises go through an internal reorganization or management. Such
reorganizations are made in an attempt to better enable these enterprises to
compete in the private sector. However, certain reorganizations could result in
a management team that does not function as well as an enterprise's prior
management and may have a negative effect on such enterprise. In addition, the
privatization of an enterprise by its government may occur over a number of
years, with the government continuing to hold a controlling position in the
enterprise even after the initial equity offering for the enterprise.

Prior to privatization, most of the state enterprises in which a fund may invest
enjoy the protection of and receive preferential treatment from the respective
sovereigns that own or control them. After making an initial equity offering,
these enterprises may no longer have such protection or receive such
preferential treatment and may become subject to market competition from which
they were previously protected. Some of these enterprises may not be able to
operate effectively in a competitive market and may suffer losses or experience
bankruptcy due to such competition.


Put Bonds. A fund may invest in "put" bonds (including securities with variable
interest rates) that may be sold back to the issuer of the security at face
value at the option of the holder prior to their stated maturity. The option to
"put" the bond back to the issuer before the stated final maturity can cushion
the price decline of the bond in a rising interest rate environment. However,
the premium paid, if any, for an option to put will have the effect of reducing
the yield otherwise payable on the underlying security. For the purpose of
determining the "maturity" of securities purchased subject to an option to put,
and for the purpose of determining a fund's dollar weighted average maturity, a
fund will consider "maturity" to be the first date on which it has the right to
demand payment from the issuer of the put although the final maturity of the
security is later than such date.


Real Estate Investment Trusts ("REITs"). REITs are sometimes informally
characterized as equity REITs, mortgage REITs and hybrid REITs. Investment in
REITs may subject a fund to risks associated with the direct ownership of real
estate, such as decreases in real estate values, overbuilding, increased
competition and other risks related to local or general economic conditions,
increases in operating costs and property taxes, changes in zoning laws,
casualty or condemnation losses, possible environmental liabilities, regulatory
limitations on rent and fluctuations in rental income. Equity REITs generally
experience these risks directly through fee or leasehold interests, whereas
mortgage REITs generally experience these risks indirectly through mortgage
interests, unless the mortgage REIT forecloses on the underlying real estate.
Changes in interest rates may also affect the value of a fund's investment in
REITs. For instance, during periods of declining interest rates, certain
mortgage REITs may hold mortgages that the mortgagors elect to prepay, which
prepayment may diminish the yield on securities issued by those REITs.


Certain REITs have relatively small market capitalizations, which may tend to
increase the volatility of the market price of their securities. Furthermore,
REITs are dependent upon specialized management skills, have limited
diversification and are, therefore, subject to risks inherent in operating and
financing a limited number of projects. REITs are also subject to heavy cash
flow dependency, defaults by borrowers and the possibility of failing to qualify
for tax-free pass-through of income under the Code and for exemption from the
registration requirements of the 1940 Act. By investing in REITs indirectly
through a fund, a shareholder will bear not only his or her proportionate share
of the expenses of a fund, but also, indirectly, similar expenses of the REITs.
In addition, REITs depend generally on their ability to generate cash flow to
make distributions to shareholders.


Repurchase Agreements. A fund may invest in repurchase agreements pursuant to
its investment guidelines. In a repurchase agreement, a fund acquires ownership
of a security and simultaneously commits to resell that security to the seller,
typically a bank or broker/dealer.

A repurchase agreement provides a means for a fund to earn income on funds for
periods as short as overnight. It is an arrangement under which the purchaser
(i.e., a fund) acquires a security ("Obligation") and the seller agrees, at the
time of sale, to repurchase the Obligation at a specified time and price.
Securities subject to a repurchase agreement are held in a segregated account
and the value of such securities is kept at least equal to the repurchase price
on a daily basis. The repurchase price may be higher than the purchase price,
the difference being income to a fund, or the purchase and repurchase prices may
be the same, with interest at a stated rate due to a fund together with the
repurchase price upon repurchase. In either case, the income to a fund is
unrelated to the interest rate on the Obligation itself. Obligations will be
held by the custodian or in the Federal Reserve Book Entry System.

It is not clear whether a court would consider the Obligation purchased by a
fund subject to a repurchase agreement as being owned by a fund or as being
collateral for a loan by a fund to the seller. In the event of the commencement
of bankruptcy or insolvency proceedings with respect to the seller of the
Obligation before repurchase of the Obligation under a repurchase agreement, a
fund may encounter delay and incur costs before being able to sell the security.
Delays may involve loss of interest or decline in price of the Obligation. If
the court characterizes the transaction as a loan and a fund has not perfected a
security interest in the Obligation, a fund may be required to return the
Obligation to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, a fund would be at risk of losing some or all
of the principal and income involved in the transaction. As with any unsecured
debt Obligation purchased for a fund, the Advisor seeks to reduce the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
obligor, in this case the seller of the Obligation. Apart from the risk of
bankruptcy or insolvency proceedings, there is also the risk that the seller may
fail to repurchase the Obligation, in which case a fund may incur a loss if the
proceeds to a fund of the sale to a third party are less than the repurchase
price. However, if the market value (including interest) of the Obligation
subject to the repurchase agreement becomes less than the repurchase price
(including interest), a fund will direct the seller of the Obligation to deliver
additional securities so that the market value (including interest) of all
securities subject to the repurchase agreement will equal or exceed the
repurchase price.

Reverse Repurchase Agreements. A fund may enter into "reverse repurchase
agreements," which are repurchase agreements in which a fund, as the seller of
the securities, agrees to repurchase such securities at an agreed time and
price. A fund maintains a segregated account in connection with outstanding
reverse repurchase agreements. A fund will enter into reverse repurchase
agreements only when the Advisor believes that the interest income to be earned
from the investment of the proceeds of the transaction will be greater than the
interest expense of the transaction. Such transactions may increase fluctuations
in the market value of fund assets and its yield and may be viewed as a form of
leverage.




Senior Loans. Senior Loans are direct obligations of corporations or other
business entities and are generally arranged by banks or other commercial
lending institutions and made generally to finance internal growth, mergers,
acquisitions, stock repurchases and leveraged buyouts. Senior Loans may include
restrictive covenants which must be maintained by the borrower. Such covenants,
in addition to the timely payment of interest and principal, may include
mandatory prepayment provisions arising from free cash flow, restrictions on
dividend payments and usually state that a borrower must maintain specific
minimum financial ratios as well as establishing limits on total debt. A breach
of covenant, which is not waived by the agent, is normally an event of
acceleration, i.e., the agent has the right to call the outstanding Senior Loan.
In addition, loan covenants may include mandatory prepayment provisions stemming
from free cash flow. Free cash flow is cash that is in excess of capital
expenditures plus debt service requirements of principal and interest. The free
cash flow shall be applied to prepay the Senior Loan in an order of maturity
described in the loan documents. Under certain interests in Senior Loans, a fund
may have an obligation to make additional loans upon demand by the borrower.

A fund's investment in Senior Loans may take the form of purchase of an
assignment or a portion of a Senior Loan from a third party ("assignment") or
acquiring a participation in a Senior Loan ("participation"). A fund may pay a
fee or forego a portion of interest payments to the lender selling a
participation or assignment under the terms of such participation or assignment.
When a fund is a purchaser of an assignment, it typically succeeds to all the
rights and obligations under the loan agreement of the assigning lender and
becomes a lender under the loan agreement with the same rights and obligations
as the assigning lender. Assignments are, however, arranged through private
negotiations between potential assignees and potential assignors, and the rights
and obligations acquired by the purchaser of an assignment may be more limited
than those held by the assigning lender. A fund may also invest in
participations in Senior Loans. With respect to any given Senior Loan, the
rights of a fund when it acquires a participation may be more limited than the
rights of the original lenders or of investors who acquire an assignment.
Participations may entail certain risks relating to the creditworthiness of the
parties from which the participations are obtained.

In a typical interest in a Senior Loan, the agent administers the loan and has
the right to monitor the collateral. The agent is also required to segregate the
principal and interest payments received from the borrower and to hold these
payments for the benefit of the lenders. A fund normally looks to the agent to
collect and distribute principal of and interest on a Senior Loan. Furthermore,
a fund looks to the agent to use normal credit remedies, such as to foreclose on
collateral; monitor credit loan covenants; and notify the lenders of any adverse
changes in the borrower's financial condition or declarations of insolvency. In
the event of a default by the borrower, it is possible, though unlikely, that a
fund could receive a portion of the borrower's collateral. If a fund receives
collateral other than cash, such collateral will be liquidated and the cash
received from such liquidation will be available for investment as part of a
fund's portfolio. At times a fund may also negotiate with the agent regarding
the agent's exercise of credit remedies under a Senior Loan. The agent is
compensated for these services by the borrower as is set forth in the loan
agreement. Such compensation may take the form of a fee or other amount paid
upon the making of the Senior Loan and/or an ongoing fee or other amount.

The loan agreement in connection with Senior Loans sets forth the standard of
care to be exercised by the agents on behalf of the lenders and usually provides
for the termination of the agent's agency status in the event that it fails to
act properly, becomes insolvent, enters FDIC receivership, or if not FDIC
insured, enters into bankruptcy or if the agent resigns. In the event an agent
is unable to perform its obligations as agent, another lender would generally
serve in that capacity.

A fund believes that the principal credit risk associated with acquiring Senior
Loans from another lender is the credit risk associated with the borrower of the
underlying Senior Loan. A fund may incur additional credit risk, however, when a
fund acquires a participation in a Senior Loan from another lender because a
fund must assume the risk of insolvency or bankruptcy of the other lender from
which the Senior Loan was acquired. However, in acquiring Senior Loans, a fund
conducts an analysis and evaluation of the financial condition of each such
lender. A fund has taken the following measures in an effort to reduce such
risks. Commercial paper rated A-1 by S&P indicates that the degree of safety
regarding timely payment is considered by S&P to be either overwhelming or very
strong and issues of commercial paper rated Prime-1 by Moody's are considered by
Moody's to have a superior ability for repayment of senior short-term debt
obligations.

Senior Loans, unlike certain bonds, usually do not have call protection. This
means that interests comprising a fund's portfolio, while having a stated one to
ten-year term, may be prepaid, often without penalty. A fund generally holds
Senior Loans to maturity unless it has become necessary to adjust a fund's
portfolio in accordance with the Advisor's view of current or expected economic
or specific industry or borrower conditions.

Senior Loans frequently require full or partial prepayment of a loan when there
are asset sales or a securities issuance. Prepayments on Senior Loans may also
be made by the borrower at its election. The rate of such prepayments may be
affected by, among other things, general business and economic conditions, as
well as the financial status of the borrower. Prepayment would cause the actual
duration of a Senior Loan to be shorter than its stated maturity. Prepayment may
be deferred by a fund. This should, however, allow a fund to reinvest in a new
loan and recognize as income any unamortized loan fees. This may result in a new
facility fee payable to a fund.

Under a Senior Loan, the borrower generally must pledge as collateral assets
which may include one or more of the following: cash; accounts receivable;
inventory; property, plant and equipment; both common and preferred stock in its
subsidiaries; trademarks, copyrights, patent rights; and franchise value. A fund
may also receive guarantees as a form of collateral. In some instances, a Senior
Loan may be secured only by stock in a borrower or its affiliates. A fund may
also invest in Senior Loans not secured by any collateral. The market value of
the assets serving as collateral (if any) will, at the time of investment, in
the opinion of the Advisor, equal or exceed the principal amount of the Senior
Loan. The valuations of these assets may be performed by an independent
appraisal. If the agent becomes aware that the value of the collateral has
declined, the agent may take action as it deemed necessary for the protection of
its own interests and the interests of the other lenders, including, for
example, giving the borrower an opportunity to provide additional collateral or
accelerating the loan. There is no assurance, however, that the borrower would
provide additional collateral or that the liquidation of the existing collateral
would satisfy the borrower's obligation in the event of nonpayment of scheduled
interest or principal, or that such collateral could be readily liquidated.

A fund may be required to pay and may receive various fees and commissions in
the process of purchasing, selling and holding Senior Loans. The fee component
may include any, or a combination of, the following elements: arrangement fees,
non-use fees, facility fees, letter of credit fees and ticking fees. Arrangement
fees are paid at the commencement of a loan as compensation for the initiation
of the transaction. A non-use fee is paid based upon the amount committed but
not used under the loan. Facility fees are on-going annual fees paid in
connection with a loan. Letter of credit fees are paid if a loan involves a
letter of credit. Ticking fees are paid from the initial commitment indication
until loan closing if for an extended period. The amount of fees is negotiated
at the time of transaction.

If legislation or state or federal regulators impose additional requirements or
restrictions on the ability of financial institutions to make loans that are
considered highly leveraged transactions, the availability of Senior Loans for
investment by a fund may be adversely affected. In addition, such requirements
or restrictions could reduce or eliminate sources of financing for certain
borrowers. This would increase the risk of default. If legislation or federal or
state regulators require financial institutions to dispose of Senior Loans that
are considered highly leveraged transactions or subject such Senior Loans to
increased regulatory scrutiny, financial institutions may determine to sell such
Senior Loans. Such sales could result in prices that, in the opinion of the
Advisor, do not represent fair value. If a fund attempts to sell a Senior Loan
at a time when a financial institution is engaging in such a sale, the price a
fund could get for the Senior Loan may be adversely affected.

Short Sales. When a fund takes a long position, it purchases a stock outright.
When a fund takes a short position, it sells at the current market price a stock
it does not own but has borrowed in anticipation that the market price of the
stock will decline. To complete, or close out, the short sale transaction, a
fund buys the same stock in the market and returns it to the lender. The price
at such time may be more or less than the price at which the security was sold
by a fund. Until the security is replaced, a fund is required to pay the lender
amounts equal to any dividends or interest, which accrue during the period of
the loan. To borrow the security, a fund may also be required to pay a premium,
which would increase the cost of the security sold. The proceeds of the short
sale will be retained by the broker, to the extent necessary to meet the margin
requirements, until the short position is closed out. A fund makes money when
the market price of the borrowed stock goes down and a fund is able to replace
it for less than it earned by selling it short. Alternatively if the price of
the stock goes up after the short sale and before the short position is closed,
a fund will lose money because it will have to pay more to replace the borrowed
stock than it received when it sold the stock short.

A fund may not always be able to close out a short position at a particular time
or at an acceptable price. A lender may request that the borrowed securities be
returned to it on short notice, and a fund may have to buy the borrowed
securities at an unfavorable price. If this occurs at a time that other short
sellers of the same security also want to close out their positions, a "short
squeeze" can occur. A short squeeze occurs when demand is greater than supply
for the stock sold short. A short squeeze makes it more likely that a fund will
have to cover its short sale at an unfavorable price. If that happens, a fund
will lose some or all of the potential profit from, or even incur a loss as a
result of, the short sale.

Until a fund closes its short position or replaces the borrowed security, a fund
will designate liquid assets it owns (other than the short sales proceeds) as
segregated assets to the books of the broker and/or its custodian in an amount
equal to its obligation to purchase the securities sold short, as required by
the 1940 Act. The amount segregated in this manner will be increased or
decreased each business day equal to the change in market value of a fund's
obligation to purchase the security sold short. If the lending broker requires a
fund to deposit additional collateral (in addition to the short sales proceeds
that the broker holds during the period of the short sale), which may be as much
as 50% of the value of the securities sold short, the amount of the additional
collateral may be deducted in determining the amount of cash or liquid assets a
fund is required to segregate to cover the short sale obligation pursuant to the
1940 Act. The amount segregated must be unencumbered by any other obligation or
claim than the obligation that is being covered. A fund believes that short sale
obligations that are covered, either by an offsetting asset or right (acquiring
the security sold short or having an option to purchase the security sold short
at exercise price that covers the obligation), or by a fund's segregated asset
procedures (or a combination thereof), are not senior securities under the 1940
Act and are not subject to a fund's borrowing restrictions. This requirement to
segregate assets limits a fund's leveraging of its investments and the related
risk of losses from leveraging. A fund also is required to pay the lender of the
security any dividends or interest that accrues on a borrowed security during
the period of the loan. Depending on the arrangements made with the broker or
custodian, a fund may or may not receive any payments (including interest) on
collateral it has deposited with the broker.

Short sales involve the risk that a fund will incur a loss by subsequently
buying a security at a higher price than the price at which a fund previously
sold the security short. Any loss will be increased by the amount of
compensation, interest or dividends, and transaction costs a fund must pay to a
lender of the security. In addition, because a fund's loss on a short sale stems
from increases in the value of the security sold short, the extent of such loss,
like the price of the security sold short, is theoretically unlimited. By
contrast, a fund's loss on a long position arises from decreases in the value of
the security held by a fund and therefore is limited by the fact that a
security's value cannot drop below zero.

The use of short sales, in effect, leverages a fund's portfolio, which could
increase a fund's exposure to the market, magnify losses and increase the
volatility of returns.

Although a fund's share price may increase if the securities in its long
portfolio increase in value more than the securities underlying its short
positions, a fund's share price may decrease if the securities underlying its
short positions increase in value more than the securities in its long
portfolio.


Small Companies. The Advisor believes that many small companies may have sales
and earnings growth rates which exceed those of larger companies, and that such
growth rates may in turn be reflected in more rapid share price appreciation
over time. However, investing in smaller company stocks involves greater risk
than is customarily associated with investing in larger, more established
companies. For example, smaller companies can have limited product lines,
markets, or financial and managerial resources. Smaller companies may also be
dependent on one or a few key persons, and may be more susceptible to losses and
risks of bankruptcy. Also, the securities of smaller companies may be thinly
traded (and therefore have to be sold at a discount from current market prices
or sold in small lots over an extended period of time). Transaction costs in
smaller company stocks may be higher than those of larger companies.

Supranational Entities. Supranational entities are international organizations
designated or supported by governmental entities to promote economic
reconstruction or development and international banking institutions and related
government agencies. Examples include the International Bank for Reconstruction
and Development (the World Bank), the European Coal and Steel Community, The
Asian Development Bank and the InterAmerican Development Bank. Obligations of
supranational entities are backed by the guarantee of one or more foreign
governmental parties which sponsor the entity.


TBA Purchase Commitments. TBA purchase commitments may be considered securities
in themselves, and involve a risk of loss if the value of the security to be
purchased declines prior to settlement date, which risk is in addition to the
risk of decline in the value of a fund's other assets. Unsettled TBA purchase
commitments are valued at the current market value of the underlying securities.

Temporary Defensive Investments. As a temporary defensive measure, a fund could
shift up to 100% of its assets into investments such as money market securities.


Trust Preferred Securities. A fund may invest in Trust Preferred Securities,
which are hybrid instruments issued by a special purpose trust (the "Special
Trust"), the entire equity interest of which is owned by a single issuer. The
proceeds of the issuance to a fund of Trust Preferred Securities are typically
used to purchase a junior subordinated debenture, and distributions from the
Special Trust are funded by the payments of principal and interest on the
subordinated debenture.

If payments on the underlying junior subordinated debentures held by the Special
Trust are deferred by the debenture issuer, the debentures would be treated as
original issue discount ("OID") obligations for the remainder of their term. As
a result, holders of Trust Preferred Securities, such as a fund, may be required
to accrue daily for federal income tax purposes their share of the OID on the
debentures (regardless of whether a fund receives any cash distributions from
the Special Trust), in addition to reporting the stated interest on the
debentures, and the value of Trust Preferred Securities would likely be
negatively affected. Interest payments on the underlying junior subordinated
debentures typically may only be deferred if dividends are suspended on both
common and preferred stock of the issuer. The underlying junior subordinated
debentures generally rank slightly higher in terms of payment priority than both
common and preferred securities of the issuer, but rank below other subordinated
debentures and debt securities. Trust Preferred Securities may be subject to
mandatory prepayment under certain circumstances. The market values of Trust
Preferred Securities may be more volatile than those of conventional debt
securities. Trust Preferred Securities may be issued in reliance on Rule 144A
under the 1933 Act, and, unless and until registered, are restricted securities;
there can be no assurance as to the liquidity of Trust Preferred Securities and
the ability of holders of Trust Preferred Securities, such as a fund, to sell
their holdings.

US Government Securities. There are two broad categories of US
Government-related debt instruments: (a) direct obligations of the US Treasury,
and (b) securities issued or guaranteed by US Government agencies.

Examples of direct obligations of the US Treasury are Treasury bills, notes,
bonds and other debt securities issued by the US Treasury. These instruments are
backed by the "full faith and credit" of the United States. They differ
primarily in interest rates, the length of maturities and the dates of issuance.
Treasury bills have original maturities of one year or less. Treasury notes have
original maturities of one to ten years and Treasury bonds generally have
original maturities of greater than ten years.

Some agency securities are backed by the full faith and credit of the United
States (such as Maritime Administration Title XI Ship Financing Bonds and Agency
for International Development Housing Guarantee Program Bonds) and others are
backed only by the rights of the issuer to borrow from the US Treasury (such as
FHLMC Bonds and FNMA Bonds), while still others, such as the securities of the
Federal Farm Credit Bank, are supported only by the credit of the issuer. With
respect to securities supported only by the credit of the issuing agency or by
an additional line of credit with the US Treasury, there is no guarantee that
the US Government will provide support to such agencies and such securities may
involve risk of loss of principal and interest.

US Government securities may include "zero coupon" securities that have been
stripped by the US Government of their unmatured interest coupons and
collateralized obligations issued or guaranteed by a US Government agency or
instrumentality.

Interest rates on US Government obligations may be fixed or variable. Interest
rates on variable rate obligations are adjusted at regular intervals, at least
annually, according to a formula reflecting then current specified standard
rates, such as 91-day US Treasury bill rates. These adjustments generally tend
to reduce fluctuations in the market value of the securities.

The government guarantee of the US Government securities in a fund's portfolio
does not guarantee the net asset value of the shares of a fund. There are market
risks inherent in all investments in securities and the value of an investment
in a fund will fluctuate over time. Normally, the value of investments in US
Government securities varies inversely with changes in interest rates. For
example, as interest rates rise the value of investments in US Government
securities will tend to decline, and as interest rates fall the value of a
fund's investments will tend to increase. In addition, the potential for
appreciation in the event of a decline in interest rates may be limited or
negated by increased principal prepayments with respect to certain
mortgage-backed securities, such as GNMA Certificates. Prepayments of high
interest rate mortgage-backed securities during times of declining interest
rates will tend to lower the return of a fund and may even result in losses to a
fund if some securities were acquired at a premium. Moreover, during periods of
rising interest rates, prepayments of mortgage-backed securities may decline,
resulting in the extension of a fund's average portfolio maturity. As a result,
a fund's portfolio may experience greater volatility during periods of rising
interest rates than under normal market conditions.

Variable and Floating Rate Instruments. A fund may invest in variable or
floating rate instruments and variable rate demand instruments, including
variable amount master demand notes. These instruments will normally involve
industrial development or revenue bonds that provide that the rate of interest
is set as a specific percentage of a designated base rate (such as the prime
rate) at a major commercial bank. In addition, the interest rate on these
securities may be reset daily, weekly or on some other reset period and may have
a floor or ceiling on interest rate changes. When holding such an instrument, a
fund can demand payment of the obligation at all times or at stipulated dates on
short notice (not to exceed 30 days) at par plus accrued interest.

Debt instruments purchased by a fund may be structured to have variable or
floating interest rates. These instruments may include variable amount master
demand notes that permit the indebtedness to vary in addition to providing for
periodic adjustments in the interest rates. The Advisor will consider the
earning power, cash flows and other liquidity ratios of the issuers and
guarantors of such instruments and, if the instrument is subject to a demand
feature, will continuously monitor their financial ability to meet payment on
demand. Where necessary to ensure that a variable or floating rate instrument is
equivalent to the quality standards applicable to a fund's fixed income
investments, the issuer's obligation to pay the principal of the instrument will
be backed by an unconditional bank letter or line of credit, guarantee or
commitment to lend. Any bank providing such a bank letter, line of credit,
guarantee or loan commitment will meet a fund's investment quality standards
relating to investments in bank obligations. The Advisor will also continuously
monitor the creditworthiness of issuers of such instruments to determine whether
a fund should continue to hold the investments.

The absence of an active secondary market for certain variable and floating rate
notes could make it difficult to dispose of the instruments, and a fund could
suffer a loss if the issuer defaults or during periods in which a fund is not
entitled to exercise its demand rights.


Variable and floating rate instruments held by a fund will be subject to a
fund's limitation on investments in illiquid securities when a reliable trading
market for the instruments does not exist and a fund may not demand payment of
the principal amount of such instruments within seven days.


Warrants. The holder of a warrant has the right, until the warrant expires, to
purchase a given number of shares of a particular issuer at a specified price.
Such investments can provide a greater potential for profit or loss than an
equivalent investment in the underlying security. Prices of warrants do not
necessarily move, however, in tandem with the prices of the underlying
securities and are, therefore, considered speculative investments. Warrants pay
no dividends and confer no rights other than a purchase option. Thus, if a
warrant held by a fund were not exercised by the date of its expiration, a fund
would lose the entire purchase price of the warrant.

When-Issued Securities. A fund may from time to time purchase equity and debt
securities on a "when-issued," "delayed delivery" or "forward delivery" basis.
The price of such securities, which may be expressed in yield terms, is fixed at
the time the commitment to purchase is made, but delivery and payment for the
securities takes place at a later date. During the period between purchase and
settlement, no payment is made by a fund to the issuer and no interest accrues
to a fund. When a fund purchases such securities, it immediately assumes the
risks of ownership, including the risk of price fluctuation. Failure to deliver
a security purchased on this basis may result in a loss or missed opportunity to
make an alternative investment.

To the extent that assets of a fund are held in cash pending the settlement of a
purchase of securities, a fund would earn no income. While such securities may
be sold prior to the settlement date, a fund intends to purchase them with the
purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time a fund makes the commitment to purchase a
security on this basis, it will record the transaction and reflect the value of
the security in determining its net asset value. The market value of the
securities may be more or less than the purchase price. A fund will establish a
segregated account in which it will maintain cash and liquid securities equal in
value to commitments for such securities.

Zero Coupon Securities. A fund may invest in zero coupon securities, which pay
no cash income and are sold at substantial discounts from their value at
maturity. When held to maturity, their entire income, which consists of
accretion of discount, comes from the difference between the issue price and
their value at maturity. Zero coupon securities are subject to greater market
value fluctuations from changing interest rates than debt obligations of
comparable maturities which make current distributions of interest (cash). Zero
coupon securities which are convertible into common stock offer the opportunity
for capital appreciation as increases (or decreases) in market value of such
securities closely follow the movements in the market value of the underlying
common stock. Zero coupon convertible securities generally are expected to be
less volatile than the underlying common stocks as they usually are issued with
maturities of 15 years or less and are issued with options and/or redemption
features exercisable by the holder of the obligation entitling the holder to
redeem the obligation and receive a defined cash payment.

Zero coupon securities include municipal securities, securities issued directly
by the US Treasury, and US Treasury bonds or notes and their unmatured interest
coupons and receipts for their underlying principal ("coupons") which have been
separated by their holder, typically a custodian bank or investment brokerage
firm, from the underlying principal (the "corpus") of the US Treasury security.
A number of securities firms and banks have stripped the interest coupons and
receipts and then resold them in custodial receipt programs with a number of
different names, including TIGRS and CATS. The underlying US Treasury Bonds and
Notes themselves are held in book-entry form at the Federal Reserve Bank or, in
the case of bearer securities (i.e., unregistered securities which are owned
ostensibly by the bearer or holder thereof), in trust on behalf of the owners
thereof. Counsel to the underwriters of these certificates or other evidences of
ownership of the US Treasury securities have stated that, for federal income tax
and securities purposes, in their opinion purchasers of such certificates, such
as a fund, most likely will be deemed the beneficial holder of the underlying US
Government securities. A fund intends to adhere to the current SEC staff
position that privately stripped obligations should not be considered US
Government securities for the purpose of determining if a fund is "diversified"
under the 1940 Act.

The US Treasury has facilitated transfers of ownership of zero coupon securities
by accounting separately for the beneficial ownership of particular interest
coupon and corpus payments on Treasury securities through the Federal Reserve
book-entry record-keeping system. The Federal Reserve program, as established by
the Treasury Department, is known as "STRIPS" or "Separate Trading of Registered
Interest and Principal of Securities." Under the STRIPS program, a fund will be
able to have its beneficial ownership of zero coupon securities recorded
directly in the book-entry record-keeping system in lieu of having to hold
certificates or other evidences of ownership of the underlying US Treasury
securities.

When US Treasury obligations have been stripped of their unmatured interest
coupons by the holder, the principal or corpus is sold at a deep discount
because the buyer receives only the right to receive a future fixed payment on
the security and does not receive any rights to periodic interest (cash)
payments. Once stripped or separated, the corpus and coupons may be sold
separately. Typically, the coupons are sold separately or grouped with other
coupons with like maturity dates and sold bundled in such form. Purchasers of
stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero coupon securities that the Treasury sells.

The Underlying DWS Funds

As noted in the Portfolio's prospectus, the Portfolio may invest in other DWS
funds ("Underlying DWS Funds"). The Portfolio will purchase or sell shares in
the Underlying DWS Funds to (a) accommodate purchases and sales of the
Portfolio's shares, (b) change the percentages of the Portfolio's assets
invested in each of the Underlying DWS Funds in response to changing market
conditions, and (c) maintain or modify the allocation of the Portfolio's assets
in accordance with the investment mixes described below. The shares that the
Portfolio purchases in the Underlying DWS Funds will be of the share class with
the lowest fees.

Portfolio managers will allocate Portfolio assets among the Underlying DWS Funds
in accordance with target percentage ranges - generally 0%-30% of the
Portfolio's assets.

Risk Factors of Underlying DWS Funds

In pursuing their investment objectives, each of the Underlying DWS Funds is
permitted investment strategies in a wide range of investment techniques. The
Underlying DWS Funds' risks are determined by the nature of the securities held
and the portfolio management strategies used by the Advisor. Further information
about the Underlying DWS Funds is contained in the prospectuses of such funds.
Shareholders of the Portfolio will be affected by the portfolio management
strategies and investment policies of the Underlying DWS Funds in direct
proportion to the amount of assets the Portfolio allocates to each Underlying
DWS Fund.

DIMA also serves as advisor to each of the Underlying DWS Funds.

The following is a list of the Underlying DWS Funds in which the Portfolio
currently may invest.

         o        DWS Commodity Securities Fund

         o        DWS Disciplined Market Neutral Fund

         o        DWS Emerging Markets Equity Fund

         o        DWS Emerging Markets Fixed Income Fund

         o        DWS Floating Rate Plus Fund

         o        DWS Gold & Precious Metals Fund

         o        DWS Inflation Protected Plus Fund

         o        DWS RREEF Global Infrastructure Fund

         o        DWS RREEF Global Real Estate Securities Fund

Initially, the Portfolio intends to make allocations ranging from approximately
0%-30% of its assets (exclusive of assets allocated to the iGAP Strategy) in
each of the following underlying funds:

DWS Commodity Securities Fund. The fund's investment objective is capital
appreciation. The fund seeks to achieve its investment objective by focusing on
commodities-related securities and equity-related securities, including
commodities-related structured notes and similar instruments that the Advisor
believes are undervalued but have favorable prospects for appreciation. The fund
is designed for investors who seek to diversify their overall portfolios by
adding exposure to the commodities markets.

DWS Disciplined Market Neutral Fund. The fund seeks capital appreciation
independent of stock market direction. It pursues its objective by investing,
under normal circumstances, in long and short positions of common stock of large
US companies. The managers buy, or take, long positions in common stock that the
managers believe are undervalued and sell, or take, short positions in common
stock that the managers believe are overvalued. The fund's investment strategy
is designed to maintain approximately equal dollar amounts invested in long and
short positions under normal circumstances. By employing this market neutral
strategy, the fund seeks to limit the fund's volatility relative to movements in
the overall stock market (that is, the fund's price movements are not expected
to correlate closely with the market's price movements). The managers attempt to
achieve returns for the fund that exceed the return on an investment in 3-month
US Treasury Bills.

DWS Emerging Markets Equity Fund. The fund seeks long term growth of capital.
Under normal circumstances, the fund invests at least 80% of net assets, plus
the amount of any borrowings for investment purposes, in emerging market
equities (equities traded mainly in emerging markets or issued by companies that
are organized in emerging markets or have more than half of their business
there). The fund invests primarily in common stocks. The fund considers
"emerging markets" to include any country that is defined as an emerging or
developing economy by any one of the following: The International Bank for
Reconstruction and Development (i.e., the World Bank), the International Finance
Corporation or the United Nations or its authorities.

DWS Emerging Markets Fixed Income Fund. The fund seeks to provide high current
income and, secondarily, long term capital appreciation. Under normal
circumstances, the fund invests at least 80% of net assets, plus the amount of
any borrowings for investment purposes, in high yield bonds (also known as "junk
bonds") and other debt securities issued by governments and corporations in
emerging market countries (i.e., the issuer is traded mainly in an emerging
market, is organized under the laws of an emerging market country or is a
company with more than half of its business in emerging markets) or the return
on which is derived primarily from emerging markets. The fund considers
"emerging markets" to include any country that is defined as an emerging or
developing economy by any one of the following: The International Bank for
Reconstruction and Development (i.e., the World Bank), the International Finance
Corporation or the United Nations or its authorities. Historically, the managers
have tended to emphasize Latin America, but may also invest in Asia, Africa, the
Middle East and Eastern Europe. To help manage risk, the fund invests at least
65% of total assets in US dollar-denominated securities. The fund also does not
invest more than 40% of total assets in any one country. The fund may invest up
to 20% of net assets in debt securities from developed markets and up to 20% of
net assets in US debt securities including those that are rated below
investment-grade.


DWS Floating Rate Plus Fund. The fund seeks to provide high current income. The
fund invests, under normal market conditions, at least 80% of its total assets
in adjustable rate loans that have a senior right to payment ("Senior Loans")
and other floating rate debt securities. The fund may also borrow money in an
amount up to 33 1/3% of the fund's total assets for a range of purposes,
including to create investment leverage.


DWS Gold & Precious Metals Fund. The fund seeks maximum return (principal change
and income). The fund invests at least 80% of net assets, plus the amount of any
borrowings for investment purposes, in common stocks and other equities of US
and foreign companies engaged in activities related to gold, silver, platinum or
other precious metals, and in gold coin and bullion directly. These companies
may be involved in activities such as exploration, mining, fabrication,
processing and distribution. While the fund invests mainly in common stocks, it
may invest up to 20% of net assets in: high-quality debt securities of companies
in precious metals and minerals operations; and debt securities whose return is
linked to precious metals prices. The fund's equity investments are mainly
common stocks, but may also include other types of equities such as preferred or
convertible stocks.

DWS Inflation Protected Plus Fund. The fund seeks to provide maximum
inflation-adjusted return, consistent with preservation of capital. Under normal
circumstances, the fund will invest at least 80% of its net assets, plus any
borrowings for investment purposes, in inflation-indexed bonds of varying
maturities issued by the US government, non-US governments, their agencies or
instrumentalities, and corporations and derivatives related to these securities.
The fund may invest the remaining portion of its assets in other types of
fixed-income securities, cash or cash equivalents. In an attempt to enhance
return, the fund also employs a global asset allocation strategy, which invests
in instruments across domestic and international fixed-income and currency
markets.

DWS RREEF Global Infrastructure Fund. The fund seeks total return from both
capital appreciation and current income through investment in a global portfolio
of securities of infrastructure-related companies. The fund invests at least 80%
of its net assets in the securities of US and non-US infrastructure-related
companies. The fund considers a company to be an infrastructure-related company
if at least 50% of its assets are infrastructure assets or 50% of its gross
income or net profits are derived, directly or indirectly, from the ownership,
management, construction, operation, utilization or financing of infrastructure
assets. The fund primarily invests in common stock and may invest in convertible
and preferred stock, rights or warrants to purchase common stock, debt
securities and listed limited partnership interests. The fund allocates its
assets among various regions and countries, including exposure to emerging
market countries.

DWS RREEF Global Real Estate Securities Fund. The fund's investment objective is
to seek total return through a combination of current income and long-term
capital appreciation. The fund seeks to achieve this objective by investing
primarily in publicly listed real estate investment trusts (REITs) and real
estate operating companies on a global basis. Under normal circumstances, the
fund will invest at least 80% of its net assets, plus the amount of any
borrowing for investment purposes, in the equity securities of REITs and real
estate operating companies listed on recognized stock exchanges around the
world. Equity securities include common stock, preferred stock and securities
convertible into common stock.

As noted above, the Portfolio will invest in futures and forward contracts as
part of its iGAP investment strategy. The Portfolio may also engage in the
following derivatives transactions directly or indirectly through its
investments in the Underlying DWS Funds.

Strategic Transactions and Derivatives

A fund may, but is not required to, utilize various other investment strategies
as described below for a variety of purposes, such as hedging various market
risks, managing the effective maturity or duration of the fixed-income
securities in a fund's portfolio or enhancing potential gain. These strategies
may be executed through the use of derivative contracts.

In the course of pursuing these investment strategies, a fund may purchase and
sell exchange-listed and over-the-counter put and call options on securities,
equity and fixed-income indices and other instruments, purchase and sell futures
contracts and options thereon, enter into various transactions such as swaps,
caps, floors, collars, currency forward contracts, currency futures contracts,
currency swaps or options on currencies, or currency futures and various other
currency transactions (collectively, all the above are called "Strategic
Transactions"). In addition, certain Strategic Transactions may also include new
techniques, instruments or strategies that are permitted as regulatory changes
occur. Strategic Transactions may be used without limit (subject to certain
limits imposed by the 1940 Act) to attempt to protect against possible changes
in the market value of securities held in or to be purchased for a fund's
portfolio resulting from securities markets or currency exchange rate
fluctuations, to protect a fund's unrealized gains in the value of its portfolio
securities, to facilitate the sale of such securities for investment purposes,
to manage the effective maturity or duration of a fund's portfolio, or to
establish a position in the derivatives markets as a substitute for purchasing
or selling particular securities. Some Strategic Transactions may also be used
to enhance potential gain. Any or all of these investment techniques may be used
at any time and in any combination, and there is no particular strategy that
dictates the use of one technique rather than another, as use of any Strategic
Transaction is a function of numerous variables including market conditions. The
ability of a fund to utilize these Strategic Transactions successfully will
depend on the Advisor's ability to predict pertinent market movements, which
cannot be assured. A fund will comply with applicable regulatory requirements
when implementing these strategies, techniques and instruments. Strategic
Transactions will not be used to alter fundamental investment purposes and
characteristics of a fund, and a fund will segregate assets (or as provided by
applicable regulations, enter into certain offsetting positions) to cover its
obligations under options, futures and swaps to limit leveraging of a fund.

Strategic Transactions, including derivative contracts, have risks associated
with them including possible default by the other party to the transaction,
illiquidity and, to the extent the Advisor's view as to certain market movements
is incorrect, the risk that the use of such Strategic Transactions could result
in losses greater than if they had not been used. Use of put and call options
may result in losses to a fund, force the sale or purchase of portfolio
securities at inopportune times or for prices higher than (in the case of put
options) or lower than (in the case of call options) current market values,
limit the amount of appreciation a fund can realize on its investments or cause
a fund to hold a security it might otherwise sell. The use of currency
transactions can result in a fund incurring losses as a result of a number of
factors including the imposition of exchange controls, suspension of
settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of a
fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of a fund's position. In addition, futures and
options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets, a
fund might not be able to close out a transaction without incurring substantial
losses, if at all. Although the use of futures and options transactions for
hedging should tend to minimize the risk of loss due to a decline in the value
of the hedged position, at the same time they tend to limit any potential gain
which might result from an increase in value of such position. Finally, the
daily variation margin requirements for futures contracts would create a greater
ongoing potential financial risk than would purchases of options, where the
exposure is limited to the cost of the initial premium. Losses resulting from
the use of Strategic Transactions would reduce net asset value, and possibly
income, and such losses can be greater than if the Strategic Transactions had
not been utilized.


General Characteristics of Options. Put options and call options typically have
similar structural characteristics and operational mechanics regardless of the
underlying instrument on which they are purchased or sold. Thus, the following
general discussion relates to each of the particular types of options discussed
in greater detail below. In addition, many Strategic Transactions involving
options require segregation of a fund's assets in special accounts, as described
in the section entitled "Asset Segregation."

A put option gives the purchaser of the option, upon payment of a premium, the
right to sell, and the writer the obligation to buy, the underlying security,
commodity, index, currency or other instrument at the exercise price. For
instance, each fund's purchase of a put option on a security might be designed
to protect its holdings in the underlying instrument (or, in some cases, a
similar instrument) against a substantial decline in the market value by giving
each fund the right to sell such instrument at the option exercise price. A call
option, upon payment of a premium, gives the purchaser of the option the right
to buy, and the seller the obligation to sell, the underlying instrument at the
exercise price. Each fund's purchase of a call option on a security, financial
future, index, currency or other instrument might be intended to protect each
fund against an increase in the price of the underlying instrument that it
intends to purchase in the future by fixing the price at which it may purchase
such instrument. An American style put or call option may be exercised at any
time during the option period while a European style put or call option may be
exercised only upon expiration or during a fixed period prior thereto. Each fund
is authorized to purchase and sell exchange listed options and over-the-counter
options ("OTC options"). Exchange listed options are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"), which guarantees
the performance of the obligations of the parties to such options. The
discussion below uses the OCC as an example, but is also applicable to other
financial intermediaries. With certain exceptions, OCC issued and exchange
listed options generally settle by physical delivery of the underlying security
or currency, although in the future cash settlement may become available. Index
options and Eurodollar instruments are cash settled for the net amount, if any,
by which the option is "in-the-money" (i.e., where the value of the underlying
instrument exceeds, in the case of a call option, or is less than, in the case
of a put option, the exercise price of the option) at the time the option is
exercised. Frequently, rather than taking or making delivery of the underlying
instrument through the process of exercising the option, listed options are
closed by entering into offsetting purchase or sale transactions that do not
result in ownership of the new option.

Each fund's ability to close out its position as a purchaser or seller of an OCC
or exchange listed put or call option is dependent, in part, upon the liquidity
of the option market. Among the possible reasons for the absence of a liquid
option market on an exchange are: (i) insufficient trading interest in certain
options; (ii) restrictions on transactions imposed by an exchange; (iii) trading
halts, suspensions or other restrictions imposed with respect to particular
classes or series of options or underlying securities including reaching daily
price limits; (iv) interruption of the normal operations of the OCC or an
exchange; (v) inadequacy of the facilities of an exchange or OCC to handle
current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.

The hours of trading for listed options may not coincide with the hours during
which the underlying financial instruments are traded. To the extent that the
option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that may not be reflected in the option markets.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. Each
fund expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.

Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty fails to make or
take delivery of the security, currency or other instrument underlying an OTC
option it has entered into with each fund or fails to make a cash settlement
payment due in accordance with the terms of that option, each fund will lose any
premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Advisor must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. Each fund will engage in OTC option transactions only with US
government securities dealers recognized by the Federal Reserve Bank of New York
as "primary dealers" or broker/dealers, domestic or foreign banks or other
financial institutions which have received (or the guarantors of the obligation
of which have received) a short-term credit rating of A-1 from S&P or P-1 from
Moody's or an equivalent rating from any other nationally recognized statistical
rating organization ("NRSRO") or, in the case of OTC currency transactions, are
determined to be of equivalent credit quality by the Advisor. The staff of the
SEC currently takes the position that OTC options purchased by each fund, and
portfolio securities "covering" the amount of each fund's obligation pursuant to
an OTC option sold by it (the cost of any sell-back plus the in-the-money
amount, if any) are illiquid, and are subject to each fund's limitation on
investing no more than 15% of its net assets in illiquid securities.

If each fund sells a call option, the premium that it receives may serve as a
partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase each fund's income. The sale of put options can also provide income.

Each fund may purchase and sell call options on securities including, but not
limited to, US Treasury and agency securities, mortgage-backed securities,
foreign sovereign debt, corporate debt securities, equity securities (including
convertible securities), Eurodollar instruments that are traded on US and
foreign securities exchanges and in the over-the-counter markets, and on
securities indices, currencies and futures contracts, and for DWS Massachusetts
Tax-Free Fund, municipal obligations. All calls sold by each fund must be
"covered" (i.e., each fund must own the securities or futures contract subject
to the call) or must meet the asset segregation requirements described below as
long as the call is outstanding. Even though each fund will receive the option
premium to help protect it against loss, a call sold by each fund exposes each
fund during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or instrument and
may require each fund to hold a security or instrument which it might otherwise
have sold.

Each fund may purchase and sell put options on securities including, but not
limited to, US Treasury and agency securities, mortgage-backed securities,
foreign sovereign debt, corporate debt securities, equity securities (including
convertible securities), Eurodollar instruments (whether or not it holds the
above securities in its portfolio), and on securities indices, currencies and
futures contracts other than futures on individual corporate debt and individual
equity securities and for DWS Massachusetts Tax-Free Fund, municipal
obligations. Except for DWS Technology Fund, each fund will not sell put options
if, as a result, more than 50% of each fund's total assets would be required to
be segregated to cover its potential obligations under such put options other
than those with respect to futures and options thereon. In selling put options,
there is a risk that each fund may be required to buy the underlying security at
a disadvantageous price above the market price.




General Characteristics of Futures. A fund may enter into futures contracts or
purchase or sell put and call options on such futures as hedges against
anticipated interest rate, currency or equity market changes, and for duration
management, risk management and return enhancement purposes. Futures are
generally bought and sold on the commodities exchanges where they are listed
with payment of initial and variation margin as described below. The sale of a
futures contract creates a firm obligation by a fund, as seller, to deliver to
the buyer the specific type of financial instrument called for in the contract
at a specific future time for a specified price (or, with respect to index
futures and Eurodollar instruments, the net cash amount). Options on futures
contracts are similar to options on securities except that an option on a
futures contract gives the purchaser the right in return for the premium paid to
assume a position in a futures contract and obligates the seller to deliver such
position.


A fund's use of futures and options thereon will in all cases be consistent with
applicable regulatory requirements and in particular the rules and regulations
of the CFTC and will be entered into for bona fide hedging, risk management
(including duration management) or other portfolio and return enhancement
management purposes. Typically, maintaining a futures contract or selling an
option thereon requires a fund to deposit with a financial intermediary or
futures commission merchant as security for its obligations an amount of cash or
other specified assets (initial margin) which initially is typically 1% to 10%
of the face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the mark to market value of the contract
fluctuates. The purchase of an option on financial futures involves payment of a
premium for the option without any further obligation on the part of a fund. If
a fund exercises an option on a futures contract it will be obligated to post
initial margin (and potential subsequent variation margin) for the resulting
futures position just as it would for any position. Futures contracts and
options thereon are generally settled by entering into an offsetting transaction
but there can be no assurance that the position can be offset prior to
settlement at an advantageous price, nor that delivery will occur. Each fund is
exempt from Commodity Pool Operator registration.


Hedging Strategies. A fund may use certain strategies designed to adjust the
overall risk of its investment portfolio. These "hedging" strategies involve
derivative contracts, including (but not limited to) US Treasury and Eurodollar
futures contracts and exchange-traded put and call options on such futures
contracts. New financial products and risk management techniques continue to be
developed and may be used if consistent with a fund's investment objective and
policies. Among other purposes, these hedging strategies may be used to
effectively maintain desired portfolio duration or to protect against market
risk should a fund change its investments among different types of fixed income
securities.

A fund might not use any hedging strategies, and there can be no assurance that
any strategy used will succeed. If the Advisor is incorrect in its judgment on
market values, interest rates or other economic factors in using a hedging
strategy, a fund may have lower net income and a net loss on the investment.
Each of these strategies involves certain risks, which include:

o        the fact that the skills needed to use hedging instruments are
         different from those needed to select securities for a fund;

o        the possibility of imperfect correlation, or even no correlation,
         between the price movements of hedging instruments and price movements
         of the securities or currencies being hedged;

o        possible constraints placed on a fund's ability to purchase or sell
         portfolio investments at advantageous times due to the need for a fund
         to maintain "cover" or to segregate securities; and

o        the possibility that a fund will be unable to close out or liquidate
         its hedged position.

A hedge is designed to offset a loss in a portfolio position with a gain in the
hedged position; at the same time, however, a properly correlated hedge will
result in a gain in the portfolio position being offset by a loss in the hedged
position. As a result, the use of options, futures and currency exchange
transactions for hedging purposes could limit any potential gain from an
increase in the value of the position hedged. With respect to futures contracts,
since the value of portfolio securities will far exceed the value of the futures
contracts sold by a fund, an increase in the value of the futures contracts
could only mitigate, but not totally offset, the decline in the value of a
fund's assets.

To the extent that a fund engages in the strategies described above, a fund may
experience losses greater than if these strategies had not been utilized. In
addition to the risks described above, these instruments may be illiquid and/or
subject to trading limits, and a fund may be unable to close out a position
without incurring substantial losses, if at all. A fund is also subject to the
risk of default by a counterparty to an off-exchange transaction.

Options on Securities Indices and Other Financial Indices. A fund also may
purchase and sell call and put options on securities indices and other financial
indices and in so doing can achieve many of the same objectives it would achieve
through the sale or purchase of options on individual securities or other
instruments. Options on securities indices and other financial indices are
similar to options on a security or other instrument except that, rather than
settling by physical delivery of the underlying instrument, they settle by cash
settlement, i.e., an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option (except if, in the case
of an OTC option, physical delivery is specified). This amount of cash is equal
to the excess of the closing price of the index over the exercise price of the
option, which also may be multiplied by a formula value. The seller of the
option is obligated, in return for the premium received, to make delivery of
this amount. The gain or loss on an option on an index depends on price
movements in the instruments making up the market, market segment, industry or
other composite on which the underlying index is based, rather than price
movements in individual securities, as is the case with respect to options on
securities.

Currency Transactions. A fund may engage in currency transactions with
counterparties primarily in order to hedge, or manage the risk of the value of
portfolio holdings denominated in particular currencies against fluctuations in
relative value. Currency transactions include forward currency contracts,
exchange listed currency futures, exchange listed and OTC options on currencies,
and currency swaps. A forward currency contract involves a privately negotiated
obligation to purchase or sell (with delivery generally required) a specific
currency at a future date, which may be any fixed number of days from the date
of the contract agreed upon by the parties, at a price set at the time of the
contract. A currency swap is an agreement to exchange cash flows based on the
notional difference among two or more currencies and operates similarly to an
interest rate swap, which is described below. A fund may enter into currency
transactions with counterparties which have received (or the guarantors of the
obligations which have received) a credit rating of A-1 or P-1 by S&P or
Moody's, respectively, or that have an equivalent rating from a NRSRO or (except
for OTC currency options) are determined to be of equivalent credit quality by
the underlying fund's advisor.

A fund's dealings in forward currency contracts and other currency transactions
such as futures, options, options on futures and swaps generally will be limited
to hedging involving either specific transactions or portfolio positions except
as described below. Transaction hedging is entering into a currency transaction
with respect to specific assets or liabilities of a fund, which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency.

A fund generally will not enter into a transaction to hedge currency exposure to
an extent greater, after netting all transactions intended wholly or partially
to offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging or cross hedging as described below.

A fund may also cross-hedge currencies by entering into transactions to purchase
or sell one or more currencies that are expected to decline in value relative to
other currencies to which a fund has or in which a fund expects to have
portfolio exposure.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, a fund may also engage in proxy
hedging. Proxy hedging is often used when the currency to which the fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a commitment or option to sell a currency whose
changes in value are generally considered to be correlated to a currency or
currencies in which some or all of a fund's portfolio securities are or are
expected to be denominated, in exchange for US dollars. The amount of the
commitment or option would not exceed the value of a fund's securities
denominated in correlated currencies. Currency hedging involves some of the same
risks and considerations as other transactions with similar instruments.
Currency transactions can result in losses to a fund if the currency being
hedged fluctuates in value to a degree or in a direction that is not
anticipated. Further, there is the risk that the perceived correlation between
various currencies may not be present or may not be present during the
particular time that a fund is engaging in proxy hedging. If a fund enters into
a currency hedging transaction, the fund will comply with the asset segregation
requirements described below.

Risks of Currency Transactions. Currency transactions are subject to risks
different from those of other portfolio transactions. Because currency control
is of great importance to the issuing governments and influences economic
planning and policy, purchases and sales of currency and related instruments can
be negatively affected by government exchange controls, blockages, and
manipulations or exchange restrictions imposed by governments. These can result
in losses to a fund if it is unable to deliver or receive currency or funds in
settlement of obligations and could also cause hedges it has entered into to be
rendered useless, resulting in full currency exposure as well as incurring
transaction costs. Buyers and sellers of currency futures are subject to the
same risks that apply to the use of futures generally. Further, settlement of a
currency futures contract for the purchase of most currencies must occur at a
bank based in the issuing nation. Trading options on currency futures is
relatively new, and the ability to establish and close out positions on such
options is subject to the maintenance of a liquid market which may not always be
available. Currency exchange rates may fluctuate based on factors extrinsic to
that country's economy.

Risks of Strategic Transactions Outside the US. When conducted outside the US,
Strategic Transactions may not be regulated as rigorously as in the US, may not
involve a clearing mechanism and related guarantees, and are subject to the risk
of governmental actions affecting trading in, or the prices of, foreign
securities, currencies and other instruments. The value of such positions also
could be adversely affected by: (i) other complex foreign political, legal and
economic factors, (ii) lesser availability than in the US of data on which to
make trading decisions, (iii) delays in a fund's ability to act upon economic
events occurring in foreign markets during non-business hours in the US, (iv)
the imposition of different exercise and settlement terms and procedures and
margin requirements than in the US, and (v) lower trading volume and liquidity.

Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which a
fund may enter are interest rate, currency, index and other swaps and the
purchase or sale of related caps, floors and collars. A fund expects to enter
into these transactions primarily to preserve a return or spread on a particular
investment or portion of its portfolio, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities a fund anticipates purchasing at a later
date. A fund will not sell interest rate caps or floors where it does not own
securities or other instruments providing the income stream a fund may be
obligated to pay. Interest rate swaps involve the exchange by a fund with
another party of their respective commitments to pay or receive interest, e.g.,
an exchange of floating rate payments for fixed rate payments with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount of two or more currencies based on the relative value
differential among them and an index swap is an agreement to swap cash flows on
a notional amount based on changes in the values of the reference indices. The
purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling such cap to the extent that a specified
index exceeds a predetermined interest rate or amount. The purchase of a floor
entitles the purchaser to receive payments on a notional principal amount from
the party selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a predetermined range of interest
rates or values.

Swaps will be entered in on a net basis, i.e., the two payment streams are
netted out in a cash settlement on the payment date or dates specified in the
instrument, with each fund receiving or paying, as the case may be, only the net
amount of the two payments. Inasmuch as each fund will segregate assets (or
enter into offsetting positions) to cover its obligations under swaps, the
Advisor and the funds believe such obligations do not constitute senior
securities under the 1940 Act and, accordingly, will not treat them as being
subject to its borrowing restrictions. Each fund will not enter into any swap,
cap, floor or collar transaction unless, at the time of entering into such
transaction, the unsecured long-term debt of the counterparty, combined with any
credit enhancements, is rated at least A by S&P or Moody's or has an equivalent
rating from another NRSRO or is determined to be of equivalent credit quality by
the Advisor. If there is a default by the counterparty, each fund may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.

A credit default swap is a contract between a buyer and a seller of protection
against a pre-defined credit event. The buyer of protection pays the seller a
fixed regular fee provided that no event of default on an underlying reference
obligation has occurred. If an event of default occurs, the seller must pay the
buyer the full notional value, or "par value," of the reference obligation in
exchange for the reference obligation. Credit default swaps are used as a means
of "buying" credit protection, i.e., attempting to mitigate the risk of default
or credit quality deterioration in some portion of a fund's holdings, or
"selling" credit protection, i.e., attempting to gain exposure to an underlying
issuer's credit quality characteristics without directly investing in that
issuer. Where a fund is a seller of credit protection, it effectively adds
leverage to its portfolio because, in addition to its total net assets, a fund
would be subject to investment exposure on the notional amount of the swap. A
fund will only sell credit protection with respect to securities in which it
would be authorized to invest directly. A fund currently considers credit
default swaps to be illiquid and treats the market value of the contract as
illiquid for purposes of determining compliance with a fund's restrictions on
investing in illiquid securities.

If a fund is a buyer of a credit default swap and no event of default occurs, a
fund will lose its investment and recover nothing. However, if a fund is a buyer
and an event of default occurs, a fund will receive the full notional value of
the reference obligation that may have little or no value. As a seller, the fund
receives a fixed rate of income through the term of the contract (typically
between six months and three years), provided that there is no default event. If
an event of default occurs, the seller must pay the buyer the full notional
value of the reference obligation. Credit default swaps involve greater risks
than if the fund had invested in the reference obligation directly.

A fund may use credit default swaps to gain exposure to particular issuers or
particular markets through investments in portfolios of credit default swaps,
such as Dow Jones CDX.NA.HY certificates. By investing in certificates
representing interests in a basket of credit default swaps, the fund is taking
credit risk with respect to an entity or group of entities and providing credit
protection to the swap counterparties. For example, the CDX EM is a tradable
basket of 19 credit default swaps on country credits which seeks to replicate
the returns on the indices of a broad group of emerging markets countries. The
credits are a subset of the countries represented by the JPMorgan Emerging
Markets Bond Index Global Diversified. By purchasing interests in CDX EM, the
fund is gaining emerging markets exposure through a single investment. Unlike
other types of credit default swaps which are generally considered illiquid,
credit default swap certificates generally can be sold within seven days and are
not subject to the fund's restrictions on investing in illiquid securities.

Combined Transactions. A fund may enter into multiple transactions, including
multiple options transactions, multiple futures transactions, multiple currency
transactions (including forward currency contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest rate
transactions ("component" transactions), instead of a single Strategic
Transaction, as part of a single or combined strategy when, in the opinion of
the Advisor, it is in the best interests of a fund to do so. A combined
transaction will usually contain elements of risk that are present in each of
its component transactions. Although combined transactions are normally entered
into based on the Advisor's judgment that the combined strategies will reduce
risk or otherwise more effectively achieve the desired portfolio management
goal, it is possible that the combination will instead increase such risks or
hinder achievement of the portfolio management objective.




Portfolio Holdings

In addition to the public disclosure of portfolio holdings through required SEC
quarterly filings, the Portfolio may make its portfolio holdings information
publicly available on the DWS Funds' Web site as described in the Portfolio's
prospectus. The Portfolio does not disseminate non-public information about
portfolio holdings except in accordance with policies and procedures adopted by
the Portfolio.


The Portfolio's procedures permit non-public portfolio holdings information to
be shared with Deutsche Asset Management and its affiliates (collectively
"DeAM"), subadvisors, if any, custodians, independent registered public
accounting firms, attorneys, officers and trustees/directors and each of their
respective affiliates and advisers who require access to this information to
fulfill their duties to the Portfolio and are subject to the duties of
confidentiality, including the duty not to trade on non-public information,
imposed by law or contract, or by the Portfolio's procedures. This non-public
information may also be disclosed, subject to the requirements described below,
to certain third parties, such as securities lending agents, financial printers,
proxy voting firms, mutual fund analysts and rating and tracking agencies, or to
shareholders in connection with in-kind redemptions (collectively, "Authorized
Third Parties").

Prior to any disclosure of the Portfolio's non-public portfolio holdings
information to Authorized Third Parties, a person authorized by the Portfolio's
Trustees/Directors must make a good faith determination in light of the facts
then known that the Portfolio has a legitimate business purpose for providing
the information, that the disclosure is in the best interest of the Portfolio,
and that the recipient assents or otherwise has a duty to keep the information
confidential and to not trade based on the information received while the
information remains non-public. No compensation is received by the Portfolio or
DeAM for disclosing non-public holdings information. Periodic reports regarding
these procedures will be provided to the Portfolio's Trustees/Directors.

Portfolio holdings information distributed by the trading desks of DeAM or a
subadvisor for the purpose of facilitating efficient trading of such securities
and receipt of relevant research is not subject to the foregoing requirements.
Non-public portfolio holding information does not include portfolio
characteristics (other than holdings or subsets of holdings) about the Portfolio
and information derived therefrom, including, but not limited to, how the
Portfolio's investments are divided among various sectors, industries,
countries, value and growth stocks, bonds, currencies and cash, types of bonds,
bond maturities, duration, bond coupons and bond credit quality ratings so long
as the identity of the Portfolio's holdings could not be derived from such
information.


                           MANAGEMENT OF THE PORTFOLIO

Deutsche Investment Management Americas Inc. ("DIMA"), which is part of Deutsche
Asset Management ("DeAM"), is the Advisor for the Portfolio. Under the oversight
of the Trust's Board, DIMA, with headquarters at 345 Park Avenue, New York, New
York 10154, the subadvisor and the sub-subadvisors (each described below) make
the Portfolio's investment decisions, buy and sell securities for the Portfolio
and conduct research that leads to these purchase and sale decisions. The
Advisor may also provide consulting services to the subadvisors and
sub-subadvisors. The Advisor manages the Portfolio's daily investment and
business affairs subject to the policies established by the Board of Trustees.
DIMA and its predecessors have more than 80 years of experience managing mutual
funds. DIMA provides a full range of investment advisory services to
institutional and retail clients. The Advisor is also responsible for selecting
brokers and dealers and for negotiating brokerage commissions and dealer
charges.

DeAM is the marketing name in the US for the asset management activities of
Deutsche Bank AG, DIMA, Deutsche Bank Trust Company Americas and DWS Trust
Company. DeAM is a global asset management organization that offers a wide range
of investing expertise and resources, including hundreds of portfolio managers
and analysts and an office network that reaches the world's major investment
centers. This well-resourced global investment platform brings together a wide
variety of experience and investment insight, across industries, regions, asset
classes and investing styles. DIMA is an indirect, wholly owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global banking institution that is
engaged in a wide range of financial services, including investment management,
mutual fund, retail, private and commercial banking, investment banking and
insurance. DWS Investments is part of Deutsche Bank's Asset Management division
and, within the US, represents the retail asset management activities of
Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment
Management Americas Inc. and DWS Trust Company.

Pursuant to an investment management agreement between the Trust, on behalf of
the Portfolio, and DIMA (the "Investment Management Agreement"), the Advisor
provides continuing investment management of the assets of the Portfolio. In
addition to the investment management of the assets of the Portfolio, the
Advisor determines the investments to be made for the Portfolio, including what
portion of its assets remain uninvested in cash or cash equivalents, and with
whom the orders for investments are placed, consistent with the Portfolio's
policies as stated in its Prospectus and SAI, or as adopted by the Fund's Board.
The Advisor will also monitor, to the extent not monitored by the Portfolio's
administrator or other agent, the Portfolio's compliance with its investment and
tax guidelines and other compliance policies. The Investment Management
Agreement was approved by the Board on September 19, 2008, is effective until
September 30, 2010, and continues from year to year thereafter only if approved
annually by the vote of a majority of those Trustees who are not parties to such
Agreements or interested persons of the Advisor or the Trust ("Independent
Trustees" or "Non-interested Trustees"), cast in person at a meeting called for
the purpose of voting on such approval, and either by a vote of the Trust's
Trustees or of a majority of the outstanding voting securities of the Portfolio.


The Advisor provides assistance to the Fund's Board in valuing the securities
and other instruments held by the Portfolio, to the extent reasonably required
by valuation policies and procedures that may be adopted by the Portfolio.

Pursuant to the Investment Management Agreement, (unless otherwise provided in
the agreement or as determined by the Fund's Board and to the extent permitted
by applicable law), the Advisor pays the compensation and expenses of all the
Board members, officers, and executive employees of the Portfolio, including the
Portfolio's share of payroll taxes, who are affiliated persons of the Advisor.


For all services provided under the Investment Management Agreement, the
Portfolio pays the Advisor under the Investment Management Agreement a fee,
calculated daily and paid monthly, in the sum of: (i) 0.20% of the portfolio's
average daily net assets invested in other DWS funds; and (ii) 1.20% of the
Portfolio's average daily net assets invested in all other assets not considered
other DWS funds. For purposes of the management fee, "other DWS funds" means
US-registered investment companies with the Advisor serving as investment
advisor. The Advisor and its affiliates earn fees at varying rates for providing
services to the underlying DWS funds. The Advisor may therefore have a conflict
of interest in selecting the underlying DWS funds and in determining whether to
invest in an ETF, from which it will not receive any fees. However, the Advisor
is a fiduciary to the Portfolio and will select investments that it believes are
best suited to meet the Portfolio's investment objective.





Because the Portfolio has not commenced operations as of the date of this SAI,
the Portfolio does not have any advisory fee information to report.

Through April 30, 2010, the Advisor has contractually agreed to waive all or a
portion of its management fee and reimburse or pay operating expenses to the
extent necessary to maintain "Total Annual Operating Expenses" at 0.21%,
excluding certain expenses such as extraordinary expenses, taxes, brokerage,
interest, and acquired funds (underlying funds) fees and expenses (estimated at
1.35%).




The Investment Management Agreement provides that the Portfolio is generally
responsible for expenses that include: fees payable to the Advisor; outside
legal, accounting or auditing expenses, including with respect to expenses
related to negotiation, acquisition or distribution of portfolio investments;
maintenance of books and records that are maintained by the Portfolio, the
Portfolio's custodian, or other agents of the Portfolio; taxes and governmental
fees; fees and expenses of the Portfolio's accounting agent, custodian,
sub-custodians, depositories, transfer agents, dividend reimbursing agents and
registrars; payment for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
or other instruments of the Portfolio; and litigation expenses and other
extraordinary expenses not incurred in the ordinary course of the Portfolio's
business.

The Investment Management Agreement allows the Advisor to delegate any of its
duties under the Agreement to a subadvisor, subject to a majority vote of the
Board of the Fund, including a majority of the Board who are not interested
persons of the Fund, and, if required by applicable law, subject to a majority
vote of the Portfolio's shareholders.


The Investment Management Agreement provides that the Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Portfolio in connection with matters to which the agreement relates, except
a loss resulting from willful malfeasance, bad faith or gross negligence on the
part of the Advisor in the performance of its duties or from reckless disregard
by the Advisor of its obligations and duties under the Investment Management
Agreement. The Investment Management Agreement may be terminated at any time,
without payment of penalty, by either party or by vote of a majority of the
outstanding voting securities of the Portfolio on 60 days' written notice.


Under a separate agreement between Deutsche Bank AG and the Portfolio, Deutsche
Bank AG has granted a license to the Portfolio to utilize the trademark "DWS."

Officers and employees of the Advisor from time to time may have transactions
with various banks, including the Portfolio's custodian bank. It is the
Advisor's opinion that the terms and conditions of those transactions which have
occurred were not influenced by existing or potential custodial or other
Portfolio relationships.

The Advisor may serve as advisor to other funds with investment objectives and
policies similar to those of the Portfolio that may have different distribution
arrangements or expenses, which may affect performance.

None of the officers or Trustees of the Fund may have dealings with the
Portfolio as principals in the purchase or sale of securities, except as
individual subscribers to or holders of shares of the Portfolio.



The Advisor may enter into arrangements with affiliates and third party service
providers to perform various administrative, back-office and other services
relating to client accounts. Such service providers may be located in the US or
in non-US jurisdictions.

In addition, the Board has approved a subadvisor approval policy for the Fund
(the "Subadvisor Approval Policy"). The Subadvisor Approval Policy permits the
Advisor, subject to the approval of the Board, including a majority of its
independent board members, to appoint and replace subadvisors and to amend
sub-advisory contracts without obtaining shareholder approval. Under the
Subadvisor Approval Policy, the Board, including its independent board members,
will continue to evaluate and approve all new sub-advisory contracts between the
Advisor and any subadvisor, as well as all changes to any existing sub-advisory
contract. The Fund cannot implement the Subadvisor Approval Policy without the
SEC either adopting revisions to current rules (as it proposed to do in October
2003) or granting the Fund exemptive relief from existing rules. The Fund and
the Advisor would be subject to certain conditions imposed by the SEC (and
certain conditions that may be imposed in the future within either exemptive
relief or a rule) to ensure that the interests of the Fund and its shareholders
are adequately protected whenever the Advisor acts under the Subadvisor Approval
Policy, including any shareholder notice requirements.


Subadvisors and Sub-Subadvisors

Subadvisors. RREEF America L.L.C. ("RREEF"), an investment advisor registered
with the SEC, is located at 875 N. Michigan Avenue, Chicago, Illinois 60611.
RREEF is an indirect wholly owned subsidiary of Deutsche Bank AG. RREEF has
provided real estate investment management services to institutional investors
since 1975 across a diversified portfolio of industrial properties, office
buildings, residential apartments and shopping centers. RREEF has also been an
investment advisor of real estate securities since 1993. While DIMA is the
investment advisor to the Portfolio, a portion the day-to-day activities of
managing the Portfolio have been delegated to RREEF. RREEF manages the
Portfolio's direct investments in global infrastructure and global real estate.
DIMA compensates RREEF out of the management fee it receives from the Portfolio.

Deutsche Investments Australia Limited ("DIAL") is an indirect, wholly owned
subsidiary of Deutsche Bank AG. DIAL is located at Level 16, 126 Phillip Street,
Sydney NSW 200, Australia. DIAL serves as both subadvisor for mutual funds and
investment advisor for certain institutional accounts. While DIMA is the
investment advisor to the Portfolio, a portion the day-to-day activities of
managing the Portfolio have been delegated to DIAL. DIAL manages the Portfolio's
direct investments in gold and precious metals securities. DIMA compensates DIAL
out of the management fee it receives from the Portfolio.

RREEF and DIAL provide sub-advisory services to the Portfolio pursuant to
separate sub-advisory agreements with DIMA. Each subadvisory agreement provides
that the subadvisor will not be liable for any error of judgment or mistake of
law or for any loss suffered by the Portfolio in connection with matters to
which the subadvisory agreement relates, except a loss resulting from willful
misconduct, bad faith or gross negligence on the part of the subadvisor in the
performance of its duties under the subadvisory agreement

Each subadvisory agreement shall continue in effect until September 30, 2010 and
from year to year thereafter, but only as long as such continuance is
specifically approved at least annually (a) by a majority of the Trustees of the
Trust who are not parties to such agreement or interested persons of any such
party except in their capacity as Trustees, and (b) by the shareholders or the
Board of Trustees of the Trust. Each subadvisory agreement may be terminated at
any time upon sixty days' notice by the subadvisor, DIMA or by the Board of
Trustees of the Trust or by majority vote of the outstanding shares of the
Portfolio, and will terminate automatically upon assignment or upon termination
of the Portfolio's Investment Management Agreement.

Sub-subadvisors. Pursuant to agreements between RREEF and RREEF Global Advisors
Limited ("RGAL"), Deutsche Asset Management (Hong Kong) Limited ("DeAM Hong
Kong") and DIAL (the "subsubadvisors"), these entities have been appointed to
act as sub-subadvisors to the Portfolio with respect to the Portfolio's direct
investments in global infrastructure and global real estate securities. RGAL
provides sub-subadvisory services related to European securities, DeAM Hong Kong
provides sub-subadvisory services related to Asian securities and DIAL provides
sub-subadvisory services related to Australian securities. The sub-subadvisors
are indirect, wholly owned subsidiaries of Deutsche Bank AG.

RGAL is located at 1 Great Winchester Street, London, United Kingdom, EC2N 2DB.
DeAM Hong Kong is located at 48/F Cheung Kong Center, 2 Queen's Road Central,
Hong Kong, China.

The sub-subadvisors are paid for their sub-subadvisory services by RREEF from
the subadvisory fee paid by DIMA to RREEF.




Compensation of Portfolio Managers


Portfolio managers are eligible for total compensation comprised of base salary
and discretionary incentive compensation.

Base Salary - Base salary generally represents a smaller percentage of portfolio
managers' total compensation than discretionary incentive compensation. Base
salary is linked to job function, responsibilities and financial services
industry peer comparison through the use of extensive market data surveys.

Discretionary Incentive Compensation - Generally, discretionary incentive
compensation comprises a greater proportion of total compensation as a portfolio
manager's seniority and compensation levels increase. Discretionary incentive
compensation is determined based on an analysis of a number of factors,
including among other things, the performance of Deutsche Bank, the performance
of the Asset Management division, and the employee's individual contribution. In
evaluating individual contribution, management will consider a combination of
quantitative and qualitative factors. A portion of the portfolio manager's
discretionary incentive compensation may be delivered in long-term equity
programs (usually in the form of Deutsche Bank equity) (the "Equity Plan"). Top
performing portfolio managers may earn discretionary incentive compensation that
is a multiple of their base salary.

o        The quantitative analysis of a portfolio manager's individual
         performance is based on, among other factors, performance of all of the
         accounts managed by the portfolio manager (which includes the fund and
         any other accounts managed by the portfolio manager) over a one-,
         three-, and five-year period relative to the appropriate Morningstar
         and Lipper peer group universes and/or benchmark index(es) with respect
         to each account. Additionally, the portfolio manager's
         retail/institutional asset mix is weighted, as appropriate for
         evaluation purposes. Generally the benchmark index used is a benchmark
         index set forth in the fund's prospectus to which the fund's
         performance is compared. Additional or different appropriate peer group
         or benchmark indices may also be used. Primary weight is given to
         pre-tax portfolio performance over three-year and five-year time
         periods (adjusted as appropriate if the portfolio manager has served
         for less than five years) with lesser consideration given to portfolio
         performance over a one-year period. The increase or decrease in a
         fund's assets due to the purchase or sale of fund shares is not
         considered a material factor.

o        The qualitative analysis of a portfolio manager's individual
         performance is based on, among other things, the results of an annual
         management and internal peer review process, and management's
         assessment of overall portfolio manager contributions to investor
         relations, the investment process and overall performance (distinct
         from fund and other account performance). Other factors, including
         contributions made to the investment team, as well as adherence to
         Compliance Policies and Procedures, Risk Management procedures, the
         firm's Code of Ethics and "living the values" of the Advisor are also
         factors.

The quantitative analysis of a portfolio manager's performance is given more
weight in determining discretionary incentive compensation than the qualitative
portion.

Certain portfolio managers may also participate in the Equity Plan. The amount
of equity awarded under the long-term equity programs is generally based on the
individual's total compensation package and may comprise from 0% to 30% of the
total compensation award. As discretionary incentive compensation increases, the
percentage of compensation awarded in Deutsche Bank equity also increases.
Portfolio managers may receive a portion of their equity compensation in the
form of shares in the proprietary mutual funds that they manage or support.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned beneficially and of
record by each member of the Portfolio's portfolio management team in the
Portfolio as well as in all DWS Funds as a group (i.e., those funds advised by
Deutsche Asset Management or its affiliates), including investments by their
immediate family members sharing the same household and amounts invested through
retirement and deferred compensation plans. This information is provided as of
September 30, 2008.

<TABLE>
<CAPTION>
                                                Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                       Fund Shares Owned                      Fund Shares Owned
-------------------------                       -----------------                      -----------------
<S>                                                   <C>                             <C>        <C>
Inna Okounkova                                        $0(1)                           $100,001 - $500,000
Thomas Picciochi                                      $0(2)                           $100,001 - $500,000
Robert Wang                                           $0(3)                           $100,001 - $500,000

(1)      Although the Portfolio Manager does not have an investment in this
         variable annuity portfolio, the Portfolio Manager does hold $1 -
         $10,000 in the retail mutual fund that has the same investment strategy
         DWS Alternative Asset Allocation Plus Fund. This investment is included
         in the "Dollar Range of All DWS Fund Shares Owned."

(2)      Although the Portfolio Manager does not have an investment in this
         variable annuity portfolio, the Portfolio Manager does hold $10,001 -
         $50,000 in the retail mutual fund that has the same investment strategy
         DWS Alternative Asset Allocation Plus Fund. This investment is included
         in the "Dollar Range of All DWS Fund Shares Owned."

(3)      Although the Portfolio Manager does not have an investment in this
         variable annuity portfolio, the Portfolio Manager does hold $1 -
         $10,000 in the retail mutual fund that has the same investment strategy
         DWS Alternative Asset Allocation Plus Fund. This investment is included
         in the "Dollar Range of All DWS Fund Shares Owned."

Conflicts of Interest

In addition to managing the assets of the Portfolio, the Portfolio's portfolio
managers may have responsibility for managing other client accounts of the
Advisor or its affiliates. The tables below show, for each portfolio manager,
the number and asset size of (1) SEC registered investment companies (or series
thereof) other than the Fund, (2) pooled investment vehicles that are not
registered investment companies and (3) other accounts (e.g., accounts managed
for individuals or organizations) managed by each portfolio manager. Total
assets attributed to each portfolio manager in the tables below include total
assets of each account managed by them, although the manager may only manage a
portion of such account's assets. The tables also show the number of performance
based fee accounts, as well as the total assets of the accounts for which the
advisory fee is based on the performance of the account. This information is
provided as of September 30, 2008.

Other SEC Registered Investment Companies Managed:

                                                                                 Number of
                                      Number of         Total Assets of         Investment          Total Assets of
                                      Registered          Registered         Company Accounts        Performance-
                                      Investment          Investment         with Performance-         Based Fee
Name of Portfolio Manager             Companies            Companies             Based Fee             Accounts
-------------------------             ---------            ---------             ---------             --------

Inna Okounkova                            16             $3,510,660,509              0                    $0
Thomas Picciochi                          13             $7,313,528,293              0                    $0
Robert Wang                               43            $14,234,720,458              0                    $0


Other Pooled Investment Vehicles Managed:

                                                                              Number of Pooled
                                                                                 Investment
                                      Number of                               Vehicle Accounts      Total Assets of
                                       Pooled          Total Assets of              with             Performance-
                                     Investment       Pooled Investment         Performance-           Based Fee
Name of Portfolio Manager             Vehicles             Vehicles              Based Fee             Accounts
-------------------------             --------             --------              ---------             --------

Inna Okounkova                              4              $84,612,626               0                          $0
Thomas Picciochi                           11             $644,711,755               1                $125,426,656
Robert Wang                                36           $1,018,472,589               1                $125,426,656


Other Accounts Managed:

                                                                                 Number of
                                                                               Other Accounts      Total Assets of
                                      Number of                                     with             Performance-
                                        Other          Total Assets of          Performance-           Based Fee
Name of Portfolio Manager             Accounts          Other Accounts           Based Fee             Accounts
-------------------------             --------          --------------           ---------             --------

Inna Okounkova                              0                       $0               0                          $0
Thomas Picciochi                           14             $944,218,197               8                $219,246,360
Robert Wang                                50           $8,300,637,621               8                $219,246,360
</TABLE>

In addition to the accounts above, an investment professional may manage
accounts in a personal capacity that may include holdings that are similar to,
or the same as, those of the Portfolio. The Advisor has in place a Code of
Ethics that is designed to address conflicts of interest and that, among other
things, imposes restrictions on the ability of portfolio managers and other
"access persons" to invest in securities that may be recommended or traded in
the Portfolio and other client accounts.

Real, potential or apparent conflicts of interest may arise when a portfolio
manager has day-to-day portfolio management responsibilities with respect to
more than one fund or account, including the following:

o        Certain investments may be appropriate for the Portfolio and also for
         other clients advised by the Advisor, including other client accounts
         managed by the Portfolio's portfolio management team. Investment
         decisions for the Portfolio and other clients are made with a view to
         achieving their respective investment objectives and after
         consideration of such factors as their current holdings, availability
         of cash for investment and the size of their investments generally. A
         particular security may be bought or sold for only one client or in
         different amounts and at different times for more than one but less
         than all clients. Likewise, because clients of the Advisor may have
         differing investment strategies, a particular security may be bought
         for one or more clients when one or more other clients are selling the
         security. The investment results achieved for the Portfolio may differ
         from the results achieved for other clients of the Advisor. In
         addition, purchases or sales of the same security may be made for two
         or more clients on the same day. In such event, such transactions will
         be allocated among the clients in a manner believed by the Advisor to
         be most equitable to each client, generally utilizing a pro rata
         allocation methodology. In some cases, the allocation procedure could
         potentially have an adverse effect or positive effect on the price or
         amount of the securities purchased or sold by the Portfolio. Purchase
         and sale orders for the Portfolio may be combined with those of other
         clients of the Advisor in the interest of achieving the most favorable
         net results to the Portfolio and the other clients.

o        To the extent that a portfolio manager has responsibilities for
         managing multiple client accounts, a portfolio manager will need to
         divide time and attention among relevant accounts. The Advisor attempts
         to minimize these conflicts by aligning its portfolio management teams
         by investment strategy and by employing similar investment models
         across multiple client accounts.

o        In some cases, an apparent conflict may arise where the Advisor has an
         incentive, such as a performance-based fee, in managing one account and
         not with respect to other accounts it manages. The Advisor will not
         determine allocations based on whether it receives a performance-based
         fee from the client. Additionally, the Advisor has in place supervisory
         oversight processes to periodically monitor performance deviations for
         accounts with like strategies.

o        The Advisor and its affiliates and the investment team of the Portfolio
         may manage other mutual funds and separate accounts on a long-short
         basis. The simultaneous management of long and short portfolios creates
         potential conflicts of interest including the risk that short sale
         activity could adversely affect the market value of the long
         positions(and vice versa), the risk arising from sequential orders in
         long and short positions, and the risks associated with receiving
         opposing orders at the same time. The Advisor has adopted procedures
         that it believes are reasonably designed to mitigate these potential
         conflicts of interest. Included in these procedures are specific
         guidelines developed to ensure fair and equitable treatment for all
         clients whose accounts are managed by each Fund's portfolio management
         team. The Advisor and the portfolio management team have established
         monitoring procedures, a protocol for supervisory reviews, as well as
         compliance oversight to ensure that potential conflicts of interest
         relating to this type of activity are properly addressed.

The Advisor is owned by Deutsche Bank AG, a multi-national financial services
company. Therefore, the Advisor is affiliated with a variety of entities that
provide, and/or engage in commercial banking, insurance, brokerage, investment
banking, financial advisory, broker-dealer activities (including sales and
trading), hedge funds, real estate and private equity investing, in addition to
the provision of investment management services to institutional and individual
investors. Since Deutsche Bank AG, its affiliates, directors, officers and
employees (the "Firm") are engaged in businesses and have interests other than
managing asset management accounts, such other activities involve real,
potential or apparent conflicts of interest. These interests and activities
include potential advisory, transactional and financial activities and other
interests in securities and companies that may be directly or indirectly
purchased or sold by the Firm for its clients' advisory accounts. These are
considerations of which advisory clients should be aware and which may cause
conflicts that could be to the disadvantage of the Advisor's advisory clients.
The Advisor has instituted business and compliance policies, procedures and
disclosures that are designed to identify, monitor and mitigate conflicts of
interest and, as appropriate, to report them to the Fund's Board.




Code of Ethics


The Portfolio has adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940
Act, to ensure that the interests of the Portfolio's shareholders come before
the interests of the people who manage the Portfolio. Among other provisions,
the Code of Ethics prohibits portfolio managers and other investment personnel
from buying or selling any real estate securities or any securities sold in
private placements in which the person has, or by reason of the transaction
acquires, any direct or indirect beneficial ownership without the prior approval
of the Portfolio's compliance officer.

The Advisor and its affiliates (including the Portfolio's distributor, DWS
Investments Distributors, Inc. (the "Distributor")) have each adopted a Code of
Ethics pursuant to Rule 17j-1 under the 1940 Act (the "Consolidated Code"). The
Consolidated Code permits access persons to trade in securities that may be
purchased or held by the Portfolio for their own accounts, subject to compliance
with the Consolidated Code's pre-clearance requirements. In addition, the
Consolidated Code also provides for trading "blackout periods" that prohibit
trading by personnel within periods of trading by the Portfolio in the same
security. The Consolidated Code also prohibits short-term trading profits and
personal investment in initial public offerings and requires prior approval with
respect to purchases of securities in private placements.


                           PORTFOLIO SERVICE PROVIDERS


Administrator


The Advisor serves as the Portfolio's administrator and has entered into an
administrative services agreement with the Portfolio (the "Administrative
Services Agreement"), pursuant to which the Advisor provides administrative
services to the Portfolio including, among others, providing the Portfolio with
personnel, preparing and making required filings on behalf of the Portfolio,
maintaining books and records for the Portfolio, and monitoring the valuation of
Portfolio securities. For all services provided under the Administrative
Services Agreement, the Portfolio pays the Advisor a fee, computed daily and
paid monthly, of 0.100% of the Portfolio's average daily net assets.

Under the Administrative Services Agreement, the Advisor is obligated on a
continuous basis to provide such administrative services as the Board reasonably
deems necessary for the proper administration of the Portfolio. The Advisor
provides the Portfolio with personnel; arranges for the preparation and filing
of the Portfolio's tax returns; prepares and submits reports and meeting
materials to the Board and the shareholders; prepares and files updates to the
Portfolio's prospectus and statement of additional information as well as other
reports required to be filed by the SEC; maintains the Portfolio's records;
provides the Portfolio with office space, equipment and services; supervises,
negotiates the contracts of and monitors the performance of third parties
contractors; oversees the tabulation of proxies; monitors the valuation of
portfolio securities and monitors compliance with Board-approved valuation
procedures; assists in establishing the accounting and tax policies of the
Portfolio; assists in the resolution of accounting issues that may arise with
respect to the Portfolio; establishes and monitors the Portfolio's operating
expense budgets; reviews and processes the Portfolio's bills; assists in
determining the amount of dividends and distributions available to be paid by
the Portfolio, prepares and arranges dividend notifications and provides
information to agents to effect payments thereof; provides to the Board periodic
and special reports; provides assistance with investor and public relations
matters; and monitors the registration of shares under applicable federal and
state law. The Advisor also performs certain fund accounting services under the
Administrative Services Agreement. The Administrative Services Agreement
provides that the Advisor will not be liable under the Administrative Services
Agreement except for willful misfeasance, bad faith or negligence in the
performance of its duties or from the reckless disregard by it of its duties and
obligations thereunder.

Because the Portfolio commenced operations on January 20, 2009, the Portfolio
does not have any historical administrative fee information to report.

Pursuant to an agreement between the Advisor and State Street Bank and Trust
Company ("SSB"), the Advisor or has delegated certain administrative functions
to SSB. The costs and expenses of such delegation are borne by the Advisor, not
by the Portfolio.

Pursuant to DeAM procedures approved by the Boards on behalf of the DWS funds,
proof of claim forms are routinely filed on behalf of the DWS funds by a third
party service provider, with certain limited exceptions. The Boards of the DWS
funds receive periodic reports regarding the implementation of these procedures.


Distributor


DWS Investments Distributors, Inc. ("DIDI" or the "Distributor"), 222 South
Riverside Plaza, Chicago, Illinois 60606, a wholly owned subsidiary of the
Advisor, is the distributor and principal underwriter for shares of the
Portfolio pursuant to an Underwriting Agreement in the continuous offering of
its shares. Terms of continuation, termination and assignment under the
underwriting agreement are identical to those described above with regard to the
investment management agreements, except that termination other than upon
assignment requires sixty days' notice.

In addition, DIDI may, from time to time, from its own resources pay certain
firms additional amounts for ongoing administrative services and assistance
provided to their customers and clients who are shareholders of the Portfolio.


Recordkeeping


Technically, the shareholders of the Portfolio are the participating insurance
companies that offer the Portfolio as an investment option for holders of
certain variable annuity contracts and variable life insurance policies.
Effectively, ownership of Portfolio shares is passed through to insurance
company contract and policy holders. The holders of the shares of the Portfolio
on the records of the Trust are the participating insurance companies and no
information concerning the Portfolio holdings of specific contract and policy
holders is maintained by the Trust. The insurance companies place orders for the
purchase and redemption of Portfolio shares with the Trust reflecting the
investment of premiums paid, surrender and transfer requests and other matters
on a net basis; they maintain all records of the transactions and holdings of
Portfolio shares and distributions thereon for individual contract and policy
holders; and they prepare and mail to contract and policy holders confirmations
and periodic account statements reflecting such transactions and holdings.


Transfer Agent


DWS Investments Service Company ("DISC" or the "Transfer Agent"), 210 West 10th
Street, Kansas City, Missouri 64105-1614, an affiliate of the Advisor, is the
Portfolio's transfer agent, dividend-paying agent and shareholder service agent.

The Transfer Agent receives an annual service fee for each account of the
Portfolio, based on the type of account. For open retail accounts, the fee is a
flat fee ranging from $20.00 to $27.50 per account, for open wholesale money
funds the fee is $32.50 per account, while for certain retirement accounts
serviced on the recordkeeping system of ADP, Inc., the fee is a flat fee up to
$3.60 per account (as of 2007, indexed to inflation) plus an asset based fee of
up to 0.25% of average net assets. 1/12th of the annual service charge for each
account is charged and payable to the Transfer Agent each month. A fee is
charged for any account which at any time during the month had a share balance
in the Portfolio. Smaller fees are also charged for closed accounts for which
information must be retained on the Transfer Agent's system for up to 18 months
after closing for tax reporting purposes.

Certain out-of-pocket expenses incurred by the Transfer Agent, including
expenses of printing and mailing routine fund disclosure documents, costs of
record retention and transaction processing costs are reimbursed by the
Portfolio or are paid directly by the Portfolio. Certain additional
out-of-pocket expenses, including costs of computer hardware and software, third
party record-keeping and processing of proxy statements, may only be reimbursed
by the Portfolio with the prior approval of the Board.


Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc.
("DST"), DISC has delegated certain transfer agent and dividend paying agent
functions to DST. The costs and expenses of such delegation are borne by DISC,
not by the Portfolio.

Custodian


SSB, as custodian, will have custody of all securities and cash of the
Portfolio. The custodian attends to the collection of principal and income, and
payment for and collection of proceeds of securities bought and sold by the
Portfolio.


Independent Registered Public Accounting Firm

Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02116, will serve as the
Portfolio's independent registered public accounting firm, 200 Clarendon Street,
Boston, MA 02116. Ernst & Young LLP will audit the financial statements of the
Portfolio and provide other audit, tax and related services. Shareholders will
receive annual audited financial statements and semi-annual unaudited financial
statements.

Counsel


Vedder Price P.C., 222 N. LaSalle St., Chicago, Illinois, serves as legal
counsel to the Fund.





Ropes & Gray LLP, One International Place, Boston, MA, serves as counsel to the
Independent Trustees.


Regulatory Matters and Legal Proceedings

On December 21, 2006, Deutsche Asset Management ("DeAM") settled proceedings
with the Securities and Exchange Commission ("SEC") and the New York Attorney
General on behalf of Deutsche Asset Management, Inc. ("DAMI") and DIMA, the
investment advisors to many of the DWS Investments funds, regarding allegations
of improper trading of fund shares at DeAM and at the legacy Scudder and Kemper
organizations prior to their acquisition by DeAM in April 2002. These regulators
alleged that although the prospectuses for certain funds in the regulators' view
indicated that the funds did not permit market timing, DAMI and DIMA breached
their fiduciary duty to those funds in that their efforts to limit trading
activity in the funds were not effective at certain times. The regulators also
alleged that DAMI and DIMA breached their fiduciary duty to certain funds by
entering into certain market timing arrangements with investors. These trading
arrangements originated in businesses that existed prior to the currently
constituted DeAM organization, which came together as a result of various
mergers of the legacy Scudder, Kemper and Deutsche fund groups, and all of the
arrangements were terminated prior to the start of the regulatory investigations
that began in the summer of 2003. No current DeAM employee approved these
trading arrangements. Under the terms of the settlements, DAMI and DIMA neither
admitted nor denied any wrongdoing.

The terms of the SEC settlement, which identified improper trading in the legacy
Deutsche and Kemper mutual funds only, provide for payment of disgorgement in
the amount of $17.2 million. The terms of the settlement with the New York
Attorney General provide for payment of disgorgement in the amount of $102.3
million, which is inclusive of the amount payable under the SEC settlement, plus
a civil penalty in the amount of $20 million. The total amount payable by DeAM,
approximately $122.3 million, will be distributed to shareholders of the
affected funds in accordance with a distribution plan to be developed by a
distribution consultant. The funds' investment advisors do not believe these
amounts will have a material adverse financial impact on them or materially
affect their ability to perform under their investment management agreements
with the DWS funds. The above-described amounts are not material to Deutsche
Bank, and have already been reserved.

Among the terms of the settled orders, DeAM is subject to certain undertakings
regarding the conduct of its business in the future, including formation of a
Code of Ethics Oversight Committee to oversee all matters relating to issues
arising under the advisors' Code of Ethics; establishment of an Internal
Compliance Controls Committee having overall compliance oversight responsibility
of the advisors; engagement of an Independent Compliance Consultant to conduct a
comprehensive review of the advisors' supervisory compliance and other policies
and procedures designed to prevent and detect breaches of fiduciary duty,
breaches of the Code of Ethics and federal securities law violations by the
advisors and their employees; and commencing in 2008, the advisors shall undergo
a compliance review by an independent third party.

In addition, DeAM is subject to certain further undertakings relating to the
governance of the mutual funds, including that at least 75% of the members of
the Boards of Trustees/Directors overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Trustees/Directors
continue to be independent of DeAM; DeAM maintain existing management fee
reductions for certain funds for a period of five years and not increase
management fees for these certain funds during this period; the funds retain a
senior officer (or independent consultants, as applicable) responsible for
assisting in the review of fee arrangements and monitoring compliance by the
funds and the investment advisors with securities laws, fiduciary duties, codes
of ethics and other compliance policies, the expense of which shall be borne by
DeAM; and periodic account statements, fund prospectuses and the mutual funds'
web site contain additional disclosure and/or tools that assist investors in
understanding the fees and costs associated with an investment in the funds and
the impact of fees and expenses on fund returns.

DeAM has also settled proceedings with the Illinois Secretary of State regarding
market timing matters. The terms of the Illinois settlement provide for investor
education contributions totaling approximately $4 million and a payment in the
amount of $2 million to the Securities Audit and Enforcement Fund.

On September 28, 2006, the SEC and the National Association of Securities
Dealers ("NASD") (now known as the Financial Industry Regulatory Authority, or
"FINRA") announced final agreements in which Deutsche Investment Management
Americas Inc. ("DIMA"), Deutsche Asset Management, Inc. ("DAMI") and DWS Scudder
Distributors, Inc. (now known as DWS Investments Distributors, Inc. ("DIDI"))
settled administrative proceedings regarding disclosure of brokerage allocation
practices in connection with sales of the DWS Funds' (now known as the DWS
Investments Funds) shares during 2001-2003. The agreements with the SEC and NASD
are reflected in orders which state, among other things, that DIMA and DAMI
failed to disclose potential conflicts of interest to the funds' Boards and to
shareholders relating to DIDI's use of certain funds' brokerage commissions to
reduce revenue sharing costs to broker-dealer firms with whom it had
arrangements to market and distribute DWS Fund shares. These directed brokerage
practices were discontinued in October 2003.

Under the terms of the settlements, in which DIMA, DAMI and DIDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DIDI agreed
to pay disgorgement, prejudgment interest and civil penalties in the total
amount of $19.3 million. The portion of the settlements distributed to the funds
was approximately $17.8 million and was paid to the funds as prescribed by the
settlement orders based upon the amount of brokerage commissions from each fund
used to satisfy revenue sharing agreements with broker-dealers who sold fund
shares.

As part of the settlements, DIMA, DAMI and DIDI also agreed to implement certain
measures and undertakings relating to revenue sharing payments including making
additional disclosures in the funds' Prospectuses or Statements of Additional
Information, adopting or modifying relevant policies and procedures and
providing regular reporting to the fund Boards.

Additional information announced by DeAM regarding the terms of the settlements
is available at www.dws-investments.com/regulatory_settlements.

The matters alleged in the regulatory settlements described above also serve as
the general basis of a number of private class action lawsuits involving the DWS
funds. These lawsuits name as defendants various persons, including certain DWS
funds, the funds' investment advisors and their affiliates, and certain
individuals, including in some cases fund Trustees/Directors, officers, and
other parties. Each DWS fund's investment advisor has agreed to indemnify the
applicable DWS funds in connection with these lawsuits, or other lawsuits or
regulatory actions that may be filed making similar allegations.

Based on currently available information, the funds' investment advisors believe
the likelihood that the pending lawsuits will have a material adverse financial
impact on a DWS fund is remote and such actions are not likely to materially
affect their ability to perform under their investment management agreements
with the DWS funds.

                             PORTFOLIO TRANSACTIONS


As a fund-of-funds, the Portfolio invests in shares of other DWS Funds, which
are purchased directly from the issuer. The following discussion applies to the
Portfolio's other investments.

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. As
applicable, references in this section to the "Advisor" should be read to mean
the Sub-Advisor and the Sub-Subadvisors, as applicable, except as noted below.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Portfolio is to seek best execution, taking into account such
factors, among others, as price; commission (where applicable); the
broker-dealer's ability to ensure that securities will be delivered on
settlement date; the willingness of the broker-dealer to commit its capital and
purchase a thinly traded security for its own inventory; whether the
broker-dealer specializes in block orders or large program trades; the
broker-dealer's knowledge of the market and the security; the broker-dealer's
ability to maintain confidentiality; the broker-dealer's ability to provide
access to new issues; the broker-dealer's ability to provide support when
placing a difficult trade; the financial condition of the broker-dealer; and
whether the broker-dealer has the infrastructure and operational capabilities to
execute and settle the trade. The Advisor seeks to evaluate the overall
reasonableness of brokerage commissions with commissions charged on comparable
transactions and compares the brokerage commissions (if any) paid by the
Portfolio to reported commissions paid by others. The Advisor routinely reviews
commission rates, execution and settlement services performed and makes internal
and external comparisons.


Commission rates on transactions in equity securities on US securities exchanges
are subject to negotiation. Commission rates on transactions in equity
securities on foreign securities exchanges are generally fixed. Purchases and
sales of fixed-income securities and certain over-the-counter securities are
effected on a net basis, without the payment of brokerage commissions.
Transactions in fixed income and certain over-the-counter securities are
generally placed by the Advisor with the principal market makers for these
securities unless the Advisor reasonably believes more favorable results are
available elsewhere. Transactions with dealers serving as market makers reflect
the spread between the bid and asked prices. Purchases of underwritten issues
will include an underwriting fee paid to the underwriter. Money market
instruments are normally purchased in principal transactions directly from the
issuer or from an underwriter or market maker.


It is likely that the broker-dealers selected based on the considerations
described in this section will include firms that also sell shares of the
Portfolio to their customers. However, the Advisor does not consider sales of
shares of the Portfolio as a factor in the selection of broker-dealers to
execute portfolio transactions for the Portfolio and, accordingly, has
implemented policies and procedures reasonably designed to prevent its traders
from considering sales of shares of the Portfolio as a factor in the selection
of broker-dealers to execute portfolio transactions for the Portfolio.

The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for the
Portfolio, to cause the Portfolio to pay brokerage commissions in excess of that
which another broker-dealer might charge for executing the same transaction in
order to obtain research and brokerage services if the Advisor determines that
such commissions are reasonable in relation to the overall services provided.
The Advisor may from time to time, in reliance on Section 28(e) of the 1934 Act,
execute portfolio transactions with broker-dealers that provide research and
brokerage services to the Advisor. Consistent with the Advisor's policy
regarding best execution, where more than one broker is believed to be capable
of providing best execution for a particular trade, the Advisor may take into
consideration the receipt of research and brokerage services in selecting the
broker-dealer to execute the trade. Although certain research and brokerage
services from broker-dealers may be useful to the Portfolio and to the Advisor,
it is the opinion of the Advisor that such information only supplements its own
research effort since the information must still be analyzed, weighed and
reviewed by the Advisor's staff. To the extent that research and brokerage
services of value are received by the Advisor, the Advisor may avoid expenses
that it might otherwise incur. Research and brokerage services received from a
broker-dealer may be useful to the Advisor and its affiliates in providing
investment management services to all or some of its clients, which includes the
Portfolio. Services received from broker-dealers that executed securities
transactions for the Portfolio will not necessarily be used by the Advisor
specifically to service such Portfolio.


Research and brokerage services provided by broker-dealers may include, but are
not limited to, information on the economy, industries, groups of securities,
individual companies, statistical information, accounting and tax law
interpretations, political developments, legal developments affecting portfolio
securities, technical market action, pricing and appraisal services, credit
analysis, risk measurement analysis, performance analysis and measurement and
analysis of corporate responsibility issues. Research and brokerage services are
typically received in the form of written or electronic reports, access to
specialized financial publications, telephone contacts and personal meetings
with security analysts, but may also be provided in the form of access to
various computer software and meetings arranged with corporate and industry
representatives.

The Advisor may also select broker-dealers and obtain from them research and
brokerage services that are used in connection with executing trades provided
that such services are consistent with interpretations under Section 28(e) of
the 1934 Act. Typically, these services take the form of computer software
and/or electronic communication services used by the Advisor to facilitate
trading activity with those broker-dealers.


Research and brokerage services may include products obtained from third parties
if the Advisor determines that such product or service constitutes brokerage and
research as defined in Section 28(e) and interpretations thereunder. Currently,
it is the Advisor's policy that Sub-Advisors may not execute portfolio
transactions on behalf of the Portfolio to obtain third party research and
brokerage services. The Advisor may, in the future, change this policy.
Regardless, certain Sub-Advisors may, as matter of internal policy, limit or
preclude third party research and brokerage services.


The Advisor may use brokerage commissions to obtain certain brokerage products
or services that have a mixed use (i.e., it also serves a function that does not
relate to the investment decision-making process). In those circumstances, the
Advisor will make a good faith judgment to evaluate the various benefits and
uses to which it intends to put the mixed use product or service and will pay
for that portion of the mixed use product or service that it reasonably believes
does not constitute research and brokerage services with its own resources.

DIMA will monitor regulatory developments and market practice in the use of
client commissions to obtain research and brokerage services and may adjust its
portfolio transactions policies in response thereto.


Investment decisions for the Portfolio and for other investment accounts managed
by the Advisor are made independently of each other in light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable. To the
extent permitted by law, the Advisor may aggregate the securities to be sold or
purchased for a Portfolio with those to be sold or purchased for other accounts
in executing transactions. Purchases or sales are then averaged as to price and
commission and allocated as to amount in a manner deemed equitable to each
account. While in some cases this practice could have a detrimental effect on
the price paid or received by, or on the size of the position obtained or
disposed of for, the Portfolio, in other cases it is believed that the ability
to engage in volume transactions will be beneficial to the Portfolio.

DIMA and its affiliates and the Portfolio's management team manage other mutual
funds and separate accounts, some of which use short sales of securities as a
part of its investment strategy. The simultaneous management of long and short
portfolios creates potential conflicts of interest including the risk that short
sale activity could adversely affect the market value of the long positions (and
vice versa), the risk arising from sequential orders in long and short
positions, and the risks associated with receiving opposing orders at the same
time.


DIMA has adopted procedures that it believes are reasonably designed to mitigate
these potential conflicts of interest. Incorporated in the procedures are
specific guidelines developed to ensure fair and equitable treatment for all
clients. DIMA and the investment team have established monitoring procedures and
a protocol for supervisory reviews, as well as compliance oversight to ensure
that potential conflicts of interest relating to this type of activity are
properly addressed.


Deutsche Bank AG or one of its affiliates (or in the case of a Sub-Advisor or a
Sub-Subadvisor, the Sub-Advisor or one of its affiliates) may act as a broker
for the Portfolio and receive brokerage commissions or other transaction-related
compensation from the Portfolio in the purchase and sale of securities, options
or futures contracts when, in the judgment of the Advisor, and in accordance
with procedures approved by the Board, the affiliated broker will be able to
obtain a price and execution at least as favorable as those obtained from other
qualified brokers and if, in the transaction, the affiliated broker charges the
Portfolio a rate consistent with that charged to comparable unaffiliated
customers in similar transactions.


                            PURCHASE AND REDEMPTIONS

Portfolio shares are sold at their net asset value next determined after an
order and payment are received as described below. (See "Net Asset Value.")


Upon receipt by the Portfolio's transfer agent of a request for redemption,
shares will be redeemed by the Portfolio at the applicable net asset value as
described below.

The Portfolio may suspend or postpone redemptions as permitted pursuant to
Section 22(e) of the 1940 Act. Generally, those circumstances are when: 1) the
New York Stock Exchange is closed other than customary weekend or holiday
closings; 2) trading on the New York Stock Exchange is restricted; 3) an
emergency exists which makes the disposal of securities owned by a fund or the
fair determination of the value of the Portfolio's net assets not reasonably
practicable; or 4) the SEC, by order, permits the suspension of the right of
redemption. Redemption payments by wire may also be delayed in the event of a
non-routine closure of the Federal Reserve wire payment system.

Market timing policies and procedures. Short-term and excessive trading of
Portfolio shares may present risks to the Portfolio's long-term shareholders,
including potential dilution in the value of Portfolio shares, interference with
the efficient management of the Portfolio (including losses on the sale of
investments), and increased brokerage and administrative costs. These risks may
be more pronounced if the Portfolio invests in certain securities, such as those
that trade in foreign markets, are illiquid or do not otherwise have "readily
available market quotations." Certain investors may seek to employ short-term
trading strategies aimed at exploiting variations in portfolio valuation that
arise from the nature of the securities held by the Portfolio (e.g., "time zone
arbitrage"). The Portfolio discourages short-term and excessive trading. The
Portfolio has adopted policies and procedures that are intended to detect and
deter short-term and excessive trading.

Pursuant to its policies, the Portfolio reserves the right to reject or cancel a
purchase or exchange order for any reason without prior notice. For example, the
Portfolio may in its discretion reject or cancel a purchase or an exchange order
even if the transaction is not subject to the specific roundtrip transaction
limitation described below if the Advisor believes that there appears to be a
pattern of short-term or excessive trading activity by a shareholder or deems
any other trading activity harmful or disruptive to the Portfolio. The
Portfolio, through its Advisor and Transfer Agent, will measure short-term and
excessive trading by the number of roundtrip transactions within a shareholder's
account during a rolling 12-month period. A "roundtrip" transaction is defined
as any combination of purchase and redemption activity (including exchanges) of
the same Portfolio's shares. The Portfolio may take other trading activity into
account if the Portfolio believes such activity is of an amount or frequency
that may be harmful to long-term shareholders or disruptive to portfolio
management.

Shareholders are limited to four roundtrip transactions in the same portfolio
(excluding the money market portfolio) over a rolling 12-month period.
Shareholders with four or more roundtrip transactions in the same portfolio
within a rolling 12-month period generally will be blocked from making
additional purchases of, or exchanges into, that portfolio. The Portfolio has
sole discretion whether to remove a block from a shareholder's account. The
rights of a shareholder to redeem shares of the Portfolio are not affected by
the four roundtrip transaction limitation.

The Advisor may make exceptions to the roundtrip transaction policy for certain
types of transactions if in its opinion the transactions do not represent
short-term or excessive trading or are not abusive or harmful to the Portfolio,
such as, but not limited to, systematic transactions, required minimum
retirement distributions, transactions initiated by the Portfolio or
administrator and transactions by certain qualified fund-of-fund(s).

In certain circumstances, the Portfolio may rely upon the policy of the
insurance company or other financial intermediary to deter short-term or
excessive trading if the Advisor believes that the policy of such insurance
company or other financial intermediary is reasonably designed to detect and
deter transactions that are not in the best interest of the Portfolio. An
insurance company's or other financial intermediary's policy relating to
short-term or excessive trading may be more or less restrictive than the
Portfolio's policy, may permit certain transactions not permitted by the
Portfolio's policies, or prohibit transactions not subject to the Portfolio's
policies.


The Advisor may also accept undertakings from an insurance company or other
financial intermediary to enforce short-term or excessive trading policies on
behalf of the Portfolio that provide a substantially similar level of protection
for the Portfolio against such transactions. For example, certain insurance
companies may have contractual or legal restrictions that prevent them from
blocking an account. In such instances, the insurance company may use alternate
techniques that the Advisor considers to be a reasonable substitute for such a
block.


In addition, the Portfolio that invests some portion of its assets in foreign
securities has adopted certain fair valuation practices intended to protect the
Portfolio from "time zone arbitrage" with respect to its foreign securities
holdings and other trading practices that seek to exploit variations in
portfolio valuation that arise from the nature of the securities held by the
Portfolio. (See "How the Portfolio calculates share price.")

There is no assurance that these policies and procedures will be effective in
limiting short-term and excessive trading in all cases. For example, the Advisor
may not be able to effectively monitor, detect or limit short-term or excessive
trading by underlying shareholders that occurs through separate accounts
maintained by insurance companies or other financial intermediaries. The Advisor
reviews trading activity at the separate account level to detect short-term or
excessive trading. If the Advisor has reason to suspect that short-term or
excessive trading is occurring at the separate account level, the Advisor will
contact the insurance company or other financial intermediary to request
underlying shareholder level activity. Depending on the amount of portfolio
shares held in such separate account (which may represent most of the
Portfolio's shares) short-term and/or excessive trading of portfolio shares
could adversely affect long-term shareholders in the Portfolio. If short-term or
excessive trading is identified, the Advisor will take appropriate action.

The Portfolio's market timing policies and procedures may be modified or
terminated at any time.


Revenue Sharing


In light of recent regulatory developments, the Advisor, the Distributor and
their affiliates have undertaken to furnish certain additional information below
regarding the level of payments made by them to selected affiliated and
unaffiliated brokers, dealers, participating insurance companies or other
financial intermediaries ("financial advisors") in connection with the sale
and/or distribution of Portfolio shares or the retention and/or servicing of
investors and Portfolio shares ("revenue sharing").

The Advisor, the Distributor and/or their affiliates may pay additional
compensation, out of their own assets and not as an additional charge to the
Portfolio, to financial advisors in connection with the sale and/or distribution
of Portfolio shares or the retention and/or servicing of Portfolio investors and
Portfolio shares. Such revenue sharing payments are in addition to any
distribution or service fees payable under any Rule 12b-1 or service plan of any
fund, any record keeping/sub-transfer agency/networking fees payable by the
Portfolio (generally through the Distributor or an affiliate) and/or the
Distributor to certain financial advisors for performing such services and any
sales charges, commissions, non-cash compensation arrangements expressly
permitted under applicable rules of FINRA or other concessions described in the
fee table or elsewhere in the Prospectuses or the SAI as payable to all
financial advisors. For example, the Advisor, the Distributor and/or their
affiliates may compensate financial advisors for providing the Portfolio with
"shelf space" or access to a third party platform or Portfolio offering list, or
other marketing programs including, without limitation, inclusion of the
Portfolio on preferred or recommended sales lists, mutual fund "supermarket"
platforms and other formal sales programs; granting the Distributor access to
the financial advisor's sales force; granting the Distributor access to the
financial advisor's conferences and meetings; assistance in training and
educating the financial advisor's personnel; and, obtaining other forms of
marketing support. The level of revenue sharing payments made to financial
advisors may be a fixed fee or based upon one or more of the following factors:
gross sales, current assets and/or number of accounts of the Portfolio
attributable to the financial advisor, the particular fund or fund type or other
measures as agreed to by the Advisor, the Distributor and/or their affiliates
and the financial advisors or any combination thereof. The amount of these
payments is determined at the discretion of the Advisor, the Distributor and/or
their affiliates from time to time, may be substantial, and may be different for
different financial advisors based on, for example, the nature of the services
provided by the financial advisor.

The Advisor, the Distributor and/or their affiliates currently make revenue
sharing payments from their own assets in connection with the sale and/or
distribution of DWS Fund shares, or the retention and/or servicing of investors,
to financial advisors in amounts that generally range from .01% up to .50% of
assets of the Portfolio serviced and maintained by the financial advisor, .05%
to .25% of sales of the Portfolio attributable to the financial advisor, a flat
fee of $13,350 up to $500,000, or any combination thereof. These amounts are
annual figures typically paid on a quarterly basis and are subject to change at
the discretion of the Advisor, the Distributor and/or their affiliates. Receipt
of, or the prospect of receiving, this additional compensation, may influence
your financial advisor's recommendation of this Portfolio or of any particular
share class of the Portfolio. You should review your financial advisor's
compensation disclosure and/or talk to your financial advisor to obtain more
information on how this compensation may have influenced your financial
advisor's recommendation of this Portfolio.

The Advisor, the Distributor and/or their affiliates may also make such revenue
sharing payments to financial advisors under the terms discussed above in
connection with the distribution of both DWS funds and non-DWS funds by
financial advisors to retirement plans that obtain record keeping services from
ADP, Inc. on the DWS Scudder branded retirement plan platform (the "Platform")
with the level of revenue sharing payments being based upon sales of both the
DWS funds and the non-DWS funds by the financial advisor on the Platform or
current assets of both the DWS funds and the non-DWS funds serviced and
maintained by the financial advisor on the Platform.

As of the date hereof, the Portfolio has been advised that the Advisor, the
Distributor and their affiliates expect that the following firms will receive
revenue sharing payments at different points during the coming year as described
above:

Channel: Broker-Dealers and Financial Advisors
----------------------------------------------
AIG Advisors Group
Ameriprise
Cadaret, Grant & Co. Inc.
Capital Analyst, Incorporated
Citigroup Global Markets, Inc. (dba Smith Barney)
Commonwealth Equity Services, LLP (dba Commonwealth Financial Network)
Deutsche Bank Group
Ensemble Financial Services
First Allied Securities
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING Advisors Network
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
PlanMember Services
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wells Fargo Investments, LLC

Channel: Cash Product Platform
------------------------------
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Brown Brothers Harriman
Brown Investment Advisory & Trust Company
Cadaret Grant & Co.
Chicago Mercantile Exchange
D.A. Davidson & Company
Deutsche Bank Group
Emmett A. Larkin Company
Fiduciary Trust Co. - International
First Southwest Company
J.P. Morgan Clearing Corp.
Legent Clearing LLC
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Mesirow Financial, Inc.
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Robert W. Baird & Co.
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
Treasury Curve LLC
US Bancorp
UBS Financial Services
William Blair & Company

Channel: Third Party Insurance Platforms
----------------------------------------
Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
Annuity Investors Life Insurance Company
Columbus Life Insurance Company
Commonwealth Annuity and Life Insurance Company
Companion Life Insurance Company
Connecticut General Life Insurance Company
Farmers New World Life Insurance Company
Fidelity Security Life Insurance Company
First Allmerica Financial Life Insurance Company
First Great West Life and Annuity Company
Genworth Life Insurance Company of New York
Genworth Life and Annuity Insurance Company
Great West Life and Annuity Insurance Company
Hartford Life Insurance Company
Integrity Life Insurance Company
John Hancock Life Insurance companies
Kemper Investors Life Insurance Company
Lincoln Benefit Life Insurance Company
Lincoln Life & Annuity Company of New York
Lincoln National Life Insurance Company
Massachusetts Mutual Life Insurance Group
MetLife Group
Minnesota Life Insurance Company
National Life Insurance Company
National Integrity Life Insurance Company
Nationwide Group
New York Life Insurance and Annuity Corporation
Phoenix Life Insurance Company
Protective Life Insurance
Provident Mutual Life Insurance
Prudential Insurance Company of America
Sun Life Group
Symetra Life Insurance Company
Transamerica Life Insurance Company
Union Central Life Insurance Company
United of Omaha Life Insurance Company
United Investors Life Insurance Company
Western Southern Life Assurance Company

Any additions, modifications or deletions to the financial advisors identified
above that have occurred since the date hereof are not reflected.

The Advisor, the Distributor or their affiliates may enter into additional
revenue sharing arrangements or change or discontinue existing arrangements with
financial advisors at any time without notice.

The prospect of receiving, or the receipt of additional compensation or
promotional incentives described above by financial advisors may provide such
financial advisors and/or their salespersons with an incentive to favor sales of
shares of the DWS funds or a particular DWS fund over sales of shares of mutual
funds (or non-mutual fund investments) with respect to which the financial
advisor does not receive additional compensation or promotional incentives, or
receives lower levels of additional compensation or promotional incentives.
Similarly, financial advisors may receive different compensation or incentives
that may influence their recommendation of any particular share class of the
Fund or of other funds. These payment arrangements, however, will not change the
price that an investor pays for Fund shares or the amount that the Fund receives
to invest on behalf of an investor and will not increase Fund expenses. You may
wish to take such payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares and you should discuss
this matter with your financial advisor and review your financial advisor's
disclosures.

It is likely that broker-dealers that execute portfolio transactions for the
Fund will include firms that also sell shares of the DWS funds to their
customers. However, the Advisor will not consider sales of DWS fund shares as a
factor in the selection of broker-dealers to execute portfolio transactions for
the DWS funds. Accordingly, the Advisor has implemented policies and procedures
reasonably designed to prevent its traders from considering sales of DWS fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund. In addition, the Advisor, the Distributor and/or
their affiliates will not use fund brokerage to pay for their obligation to
provide additional compensation to financial advisors as described above.




                           DIVIDENDS AND CAPITAL GAINS

The Portfolio normally follows the practice of declaring and distributing
substantially all the net investment income and any net short-term and long-term
capital gains at least annually.


The Fund may at any time vary the dividend practices with respect to the
Portfolio and, therefore, reserves the right from time to time to either
distribute or retain for reinvestment such of its net investment income and its
net short-term and long-term capital gains as the Board of Trustees of the Fund
determines appropriate under the then current circumstances.


                              FEDERAL INCOME TAXES


The Portfolio and each Underlying DWS fund intends to qualify as a regulated
investment company under subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), in order to avoid federal income taxation of the Portfolio
and the Underlying DWS funds.


Pursuant to the requirements of Section 817(h) of the Code, with certain limited
exceptions, the only shareholders of the Portfolio will be insurance companies
and their separate accounts that fund variable insurance and annuity contracts.
The prospectus that describes a particular variable insurance or annuity
contract should discuss the taxation of separate accounts and the owner of the
particular variable insurance or annuity contract. Potential insurance and
annuity contract holders should review such prospectuses carefully.


Section 817(h) of the Code and the regulations issued by the Treasury Department
impose certain diversification requirements affecting the securities in which
the Portfolio may invest. These diversification requirements are in addition to
the diversification requirements under subchapter M of the Code and the 1940
Act. A failure to meet the requirements of Section 817(h) could result in
federal income taxation of the insurance company offering the variable insurance
or annuity contract and treatment of the owner of the contract other than as
described in the prospectus for the contract. The Portfolio therefore intends to
comply with the requirements of Section 817(h) and related regulations.

Pursuant to a ruling issued by the IRS, for purposes of the diversification
requirements of Section 817(h), the Portfolio generally will be treated as
owning a pro rata portion of the investments of an underlying portfolio in which
the Portfolio holds an interest if (1) the underlying portfolio is a regulated
investment company for federal income tax purposes, (2) all of the beneficial
interests in the underlying portfolio are held directly or indirectly by one or
more insurance company segregated asset accounts and (3) subject to certain
exceptions, public access to the underlying portfolio is available exclusively
through the purchase of a variable contract. The Portfolio's investment in a
retail DWS fund or an exchange traded fund is not expected to satisfy these
requirements. If these requirements are not satisfied with respect to an
underlying portfolio, the Portfolio's investment in the underlying portfolio may
be treated as a single security for purposes of the Code Section 817(h)
diversification requirements. The Portfolio will take this rule into account in
determining whether it has satisfied the Section 817(h) diversification
requirements.

If owners of a variable insurance or annuity contract possess sufficient
incidents of ownership, they will be considered for federal income tax purposes
the owners of the assets of the separate accounts used to support their
contracts. In those circumstances, income and gains from the separate account's
assets for a taxable year will be included in the owner's gross income for the
current taxable year. In Revenue Ruling 2003-91, the IRS ruled that under a
specified set of facts the owners of variable insurance and annuity contracts
would not be considered the owners of the assets of the separate accounts used
to support the contracts, but Revenue Ruling 2003-91 did not address a situation
where the separate accounts invested in regulated investment companies that are
not publicly available, such as the Portfolio, which themselves invested in
regulated investment companies that are publicly available, such as some of the
underlying DWS funds. The Portfolio has obtained a private letter ruling from
the IRS that the Portfolio's investments in Underlying DWS Funds will not cause
the holders of variable annuity and variable life insurance contracts to be
treated as the owners of the Portfolio's shares for federal income tax purposes.

The preceding is a brief summary of certain of the relevant federal income tax
considerations applicable to an investment in the Portfolio. The summary is not
intended as a complete explanation or a substitute for careful tax planning and
consultation with individual tax advisors.


                                 NET ASSET VALUE


The net asset value of shares of the Portfolio is computed as of the close of
regular trading on the New York Stock Exchange (the "Exchange") on each day the
Exchange is open for trading (the "Value Time"). The Exchange is scheduled to be
closed on the following holidays: New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas, and on the preceding Friday or subsequent Monday
when one of these holidays falls on a Saturday or Sunday, respectively. Net
asset value per share is determined separately for each class of shares by
dividing the value of the total assets of the Portfolio, less all liabilities
attributable to that class, by the total number of shares of that class
outstanding. The net asset value per share may be lower for certain classes of
the Portfolio because of higher expenses borne by these classes.

The net asset value of each Underlying DWS Fund is determined based upon the
nature of the securities as set forth in the prospectus and statement of
additional information of such Underlying DWS Fund. Shares of each Underlying
DWS Fund in which the Portfolio may invest are valued at the net asset value per
share of each Underlying DWS Fund as of the close of regular trading on the
Exchange on each day the Exchange is open for trading. The net asset value per
share of the Underlying DWS Funds will be calculated and reported to the
Portfolio by each Underlying DWS Fund's accounting agent. Short-term securities
with a remaining maturity of sixty days or less are valued by the amortized cost
method.

If market quotations for the Portfolio assets are not readily available or the
value of an asset as determined in accordance with Board approved procedures
does not represent the fair market value of the portfolio asset, the value of
the portfolio asset is taken to be an amount which, in the opinion of the
Portfolio's Pricing Committee (or, in some cases, the Board's Valuation
Committee), represents fair market value. The value of other portfolio holdings
owned by the Portfolio is determined in a manner which is intended to fairly
reflect the fair market value of the asset on the valuation date, based on
valuation procedures adopted by the Board and overseen primarily by the Fund's
Pricing Committee.

                           BOARD MEMBERS AND OFFICERS

The following table presents certain information regarding the Board Members of
the Trust. Each Board Member's year of birth is set forth in parentheses after
his or her name. Unless otherwise noted, (i) each Board Member has engaged in
the principal occupation(s) noted in the table for at least the most recent five
years, although not necessarily in the same capacity, and (ii) the address of
each Board Member that is not an "interested person" (as defined in the 1940
Act) of the Trust or the Advisor (each, an "Independent Board Member") is c/o
Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. The term of office for
each Board Member is until the election and qualification of a successor, or
until such Board Member sooner dies, resigns, is removed or as otherwise
provided in the governing documents of the Trust. Because the Portfolio does not
hold an annual meeting of shareholders, each Board Member will hold office for
an indeterminate period. The Board Members may also serve in similar capacities
with other funds in the DWS fund complex.

Independent Board Members

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                                           <C>
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;               134
(1950)                            formerly: Project Leader, International Institute for Applied
Chairperson since 2009, and       Systems Analysis (1998-2001); Chief Executive Officer, The
Board Member since 1993           Eric Group, Inc. (environmental insurance) (1986-1998)
--------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)         Retired; formerly: Executive Vice President and Chief Risk            134
Board Member since 1999           Management Officer, First Chicago NBD Corporation/The First
                                  National Bank of Chicago (1996-1998); Executive Vice
                                  President and Head of International Banking (1995-1996);
                                  Directorships: Healthways Inc. (provider of disease and care
                                  management services); Portland General Electric (utility
                                  company); Stockwell Capital Investments PLC (private equity);
                                  former Directorships: First Oak Brook Bancshares, Inc. and
                                  Oak Brook Bank
--------------------------------------------------------------------------------------------------------------------
 Henry P. Becton, Jr. (1943)      Vice Chair, WGBH Educational Foundation; Directorships:               134
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(2) (medical technology company); Belo
                                  Corporation(2) (media company); Boston Museum of Science;
                                  Public Radio International; former Directorships: American
                                  Public Television; Concord Academy; New England Aquarium;
                                  Mass. Corporation for Educational Telecommunications;
                                  Committee for Economic Development; Public Broadcasting
                                  Service
--------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive           134
Board Member since 1987           Fellow, Center for Business Ethics, Bentley University;
                                  formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 20 open-end mutual
                                  funds managed by Sun Capital Advisers, Inc. (since 2007);
                                  Director of ICI Mutual Insurance Company (since 2007);
                                  Advisory Board, Center for Business Ethics, Bentley
                                  University; Trustee, Southwest Florida Community Foundation
                                  (charitable organization); former Directorships: Investment
                                  Company Institute (audit, executive, nominating committees)
                                  and Independent Directors Council (governance, executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           134
Board Member since                of private equity funds); Directorships: Progressive Holding
1996                              Corporation (kitchen goods importer and distributor); Natural
                                  History, Inc. (magazine publisher); Box Top Media Inc.
                                  (advertising); The Kennel Shop (retailer)
--------------------------------------------------------------------------------------------------------------------
Kenneth C. Froewiss               Clinical Professor of Finance, NYU Stern School of Business           134
(1945)                            (1997-present); Member, Finance Committee, Association for
Board Member since                Asian Studies (2002-present); Director, Mitsui Sumitomo
2001                              Insurance Group (US) (2004-present); prior thereto, Managing
                                  Director, J.P. Morgan (investment banking firm) (until 1996)
--------------------------------------------------------------------------------------------------------------------
Richard J. Herring                Jacob Safra Professor of International Banking and Professor,         134
(1946)                            Finance Department, The Wharton School, University of
Board Member since                Pennsylvania (since July 1972); Co-Director, Wharton
1990                              Financial Institutions Center (since July 2000); Director,
                                  Japan Equity Fund, Inc. (since September 2007), Thai Capital
                                  Fund, Inc. (since September 2007), Singapore Fund, Inc.
                                  (since September 2007); formerly: Vice Dean and Director,
                                  Wharton Undergraduate Division (July 1995-June 2000);
                                  Director, Lauder Institute of International Management
                                  Studies (July 2000-June 2006)
--------------------------------------------------------------------------------------------------------------------
William McClayton (1944)          Managing Director, Diamond Management & Technology                    134
Board Member since 2004           Consultants, Inc. (global management consulting firm)
                                  (2001-present); Directorship: Board of Managers, YMCA of
                                  Metropolitan Chicago; formerly: Senior Partner, Arthur
                                  Andersen LLP (accounting) (1966-2001); Trustee, Ravinia
                                  Festival
--------------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel                  President and Chief Executive Officer, The Pew Charitable             134
(1951)                            Trusts (charitable organization) (1994 to present); Trustee,
Board Member since                Thomas Jefferson Foundation (charitable organization) (1994
1995                              to present); Trustee, Executive Committee, Philadelphia
                                  Chamber of Commerce (2001 to 2007); Trustee, Pro Publica
                                  (2007-present) (charitable organization); formerly: Executive
                                  Vice President, The Glenmede Trust Company (investment trust
                                  and wealth management) (1983 to 2004); Board Member, Investor
                                  Education (charitable organization) (2004-2005); Director,
                                  Viasys Health Care(2) (January 2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 20 open-end           134
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(2) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US               134
(1943)                            Government Accountability Office (1996-1997); Partner,
Board Member since                Fulbright & Jaworski, L.L.P. (law firm) (1978-1996);
1997                              Directorships: The William and Flora Hewlett Foundation;
                                  Service Source, Inc.; former Directorships: Mutual Fund
                                  Directors Forum (2002-2004), American Bar Retirement
                                  Association (funding vehicle for retirement plans) (1987-1990
                                  and 1994-1996)
--------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)        President, Robert H. Wadsworth & Associates, Inc. (consulting         137
Board Member since 1999           firm) (1983 to present); Director, The Phoenix Boys Choir
                                  Association
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Trust and Length of     Business Experience and                                        in DWS Fund
 Time Served(1)                   Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(3)                Managing Director(4), Deutsche Asset Management; Head of              134
 (1958)                           Deutsche Asset Management Americas; CEO of DWS Investments;
 Board Member since               formerly: board member of DWS Investments, Germany
 2006                             (1999-2005); Head of Sales and Product Management for the
                                  Retail and Private Banking Division of Deutsche Bank in
                                  Germany (1997-1999); various strategic and operational
                                  positions for Deutsche Bank Germany Retail and Private
                                  Banking Division in the field of investment funds, tax driven
                                  instruments and asset management for corporates (1989-1996)
--------------------------------------------------------------------------------------------------------------------

Officers((5))

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Trust and Length of     Business Experience and
 Time Served(6)                   Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(7) (1965)       Managing Director(4), Deutsche Asset Management (2006-present); President of
 President, 2006-present          DWS family of funds; Director, ICI Mutual Insurance Company (since
                                  October 2007); formerly: Director of Fund Board Relations (2004-2006) and
                                  Director of Product Development (2000-2004), Merrill Lynch Investment Managers;
                                  Senior Vice President Operations, Merrill Lynch Asset Management (1999-2000)
--------------------------------------------------------------------------------------------------------------------
 John Millette(8) (1962)          Director(4), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(7) (1963)       Managing Director(4), Deutsche Asset Management (since July 2004); formerly:
 Chief Financial Officer,         Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family
 2004-present                     of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS
 Treasurer, 2005-present          Global Asset Management (1994-1998)
--------------------------------------------------------------------------------------------------------------------
 Patricia DeFilippis(9) (1963)    Vice President, Deutsche Asset Management (since June 2005); formerly: Counsel,
 Assistant Secretary,             New York Life Investment Management LLC (2003-2005); legal associate, Lord,
 2005-present                     Abbett & Co. LLC (1998-2003)
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(8) (1962)       Managing Director(4), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(8)                  Director(4), Deutsche Asset Management (since 2006); formerly: Vice President,
 (1957)                           The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jack Clark (8)                   Director(4), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(8)               Director(4), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(9) (1972)          Vice President, Deutsche Asset Management (since 2006); formerly: AML
 Anti-Money Laundering            Operations Manager for Bear Stearns (2004-2006); Supervising Compliance
 Compliance Officer,              Principal and Operations Manager for AXA Financial (1999-2004)
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Robert Kloby(9) (1962)           Managing Director(4), Deutsche Asset Management (2004-present); formerly: Chief
 Chief Compliance Officer,        Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President,
 2006-present                     The Prudential Insurance Company of America (1988-2000); E.F. Hutton and
                                  Company (1984-1988)
--------------------------------------------------------------------------------------------------------------------
 J. Christopher Jackson(9)        Director(4), Deutsche Asset Management (2006-present); formerly: Director,
 (1951)                           Senior Vice President, General Counsel, and Assistant Secretary, Hansberger
 Chief Legal Officer,             Global Investors, Inc. (1996-2006); Director, National Society of Compliance
 2006-present                     Professionals (2002-2005) (2006-2009)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      The length of time served represents the year in which the Board Member
         joined the board of one or more DWS funds currently overseen by the
         Board.

(2)      A publicly held company with securities registered pursuant to Section
         12 of the Securities Exchange Act of 1934.

(3)      The mailing address of Axel Schwarzer is c/o Deutsche Investment
         Management Americas Inc., 345 Park Avenue, New York, New York 10154.
         Mr. Schwarzer is an interested Board Member by virtue of his positions
         with Deutsche Asset Management. As an interested person, Mr. Schwarzer
         receives no compensation from the Portfolio.

(4)      Executive title, not a board directorship.

(5)      As a result of their respective positions held with the Advisor, these
         individuals are considered "interested persons" of the Advisor within
         the meaning of the 1940 Act. Interested persons receive no compensation
         from the Portfolio.

(6)      The length of time served represents the year in which the officer was
         first elected in such capacity for one or more DWS funds.

(7)      Address:  345 Park Avenue, New York, New York 10154.

(8)      Address: One Beacon Street, Boston, Massachusetts 02108.

(9)      Address:  280 Park Avenue, New York, New York 10017.

Certain officers hold similar positions for other investment companies for which
DIMA or an affiliate serves as the Advisor.

Officer's Role with Principal Underwriter:  DWS Investments Distributors, Inc.

 Paul H. Schubert:                     Vice President
 Jason Vazquez:                        Vice President and AML Compliance Officer
 Caroline Pearson:                     Secretary
 Patricia DeFilippis:                  Assistant Secretary

Board Members' Responsibilities. The officers of the Trust manage its day-to-day
operations under the direction of the Board. The primary responsibility of the
Board is to represent the interests of the Portfolio and to provide oversight of
the management of the Portfolio.

Board Committees. The Board has established the following standing committees:
Audit Committee, Nominating and Governance Committee, Contract Committee, Equity
Oversight Committee, Fixed-Income and Quant Oversight Committee, Marketing and
Shareholder Services Committee, and Operations Committee. For each committee,
the Board has adopted a written charter setting forth each committee's
responsibilities. Each committee was reconstituted effective April 1, 2008.

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, assists the Board in fulfilling its responsibility for oversight
of (1) the integrity of the financial statements, (2) the Portfolio's accounting
and financial reporting policies and procedures, (3) the Portfolio's compliance
with legal and regulatory requirements related to accounting and financial
reporting and (4) the qualifications, independence and performance of the
independent registered public accounting firm for the Portfolio. It also
approves and recommends to the Board the appointment, retention or termination
of the independent registered public accounting firm for the Portfolio, reviews
the scope of audit and internal controls, considers and reports to the Board on
matters relating to the Portfolio's accounting and financial reporting
practices, and performs such other tasks as the full Board deems necessary or
appropriate. The Audit Committee receives annual representations from the
independent registered public accounting firm as to its independence. The
members of the Audit Committee are William McClayton (Chair), Kenneth C.
Froewiss (Vice Chair), John W. Ballantine, Henry P. Becton, Jr., Keith R. Fox
and William N. Searcy, Jr. During the calendar year 2008, the Audit Committee of
the Portfolio's Board held six (6) meetings.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, recommends individuals for
membership on the Board, nominates officers, Board and committee chairs, vice
chairs and committee members, and oversees the operations of the Board. The
Nominating and Governance Committee also reviews recommendations by shareholders
for candidates for Board positions. Shareholders may recommend candidates for
Board positions by forwarding their correspondence by US mail or courier service
to Dawn-Marie Driscoll, P.O. Box 100176, Cape Coral, FL 33904. The members of
the Nominating and Governance Committee are Henry P. Becton, Jr. (Chair),
Rebecca W. Rimel (Vice Chair), Paul K. Freeman and William McClayton. During the
calendar year 2008, the Nominating and Governance Committee of the Portfolio's
Board held five (5) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Portfolio's
financial arrangements with DIMA and its affiliates, and (b) the Portfolio's
expense ratios. The members of the Contract Committee are Robert H. Wadsworth
(Chair), Keith R. Fox (Vice Chair), Henry P. Becton, Jr., Richard J. Herring,
William McClayton and Jean Gleason Stromberg. During the calendar year 2008, the
Contract Review Committee of the Portfolio's Board held seven (7) meetings.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those portfolios that primarily invest in equity
securities (except for those funds managed by a quantitative investment team).
The members of the Equity Oversight Committee are John W. Ballantine (Chair),
William McClayton (Vice Chair), Henry P. Becton, Jr., Keith R. Fox, Richard J.
Herring and Rebecca W. Rimel. During the calendar year 2008, the Equity
Oversight Committee of the Portfolio's Board held five (5) meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those portfolios that primarily
invest in fixed-income securities or are managed by a quantitative investment
team. The members of the Fixed-Income and Quant Oversight Committee are William
N. Searcy, Jr. (Chair), Jean Gleason Stromberg (Vice Chair), Dawn-Marie
Driscoll, Kenneth C. Froewiss and Robert H. Wadsworth. During the calendar year
2008, the Fixed-Income Oversight Committee of the Portfolio's Board held five
(5) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Portfolio's marketing program, sales practices
and literature and shareholder services. The members of the Marketing and
Shareholder Services Committee are Richard J. Herring (Chair), Dawn-Marie
Driscoll (Vice Chair), Rebecca W. Rimel, Jean Gleason Stromberg and Robert H.
Wadsworth. During the calendar year 2008, the Marketing/Distribution/Shareholder
Service Committee of the Portfolio's Board held four (4) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Portfolio. The
Operations Committee reviews administrative matters related to the operations of
the Portfolio, policies and procedures relating to portfolio transactions,
custody arrangements, fidelity bond and insurance arrangements, valuation of
Portfolio assets and securities and such other tasks as the full Board deems
necessary or appropriate. The Operations Committee also oversees the valuation
of the Portfolio's securities and other assets and determines, as needed, the
fair value of Portfolio securities or other assets under certain circumstances
as described in the Portfolio's Valuation Procedures. The Operations Committee
has appointed a Valuation Sub-Committee, which may make determinations of fair
value required when the Operations Committee is not in session. The members of
the Operations Committee are Dawn-Marie Driscoll (Chair), John W. Ballantine
(Vice Chair), Kenneth C. Froewiss, Rebecca W. Rimel and William N. Searcy, Jr.
The members of the Valuation Sub-Committee are Kenneth C. Froewiss (Chair), John
W. Ballantine, Dawn-Marie Driscoll (Alternate), Rebecca W. Rimel (Alternate) and
William N. Searcy, Jr. (Alternate). During the calendar year 2008, the
Operations Committee held five (5) meetings. The Portfolio commenced operations
in 2009; therefore, the Valuation Sub-Committee did not meet during calendar
year 2008.

Ad Hoc Committees. In addition to the standing committees described above, from
time to time the Board may also form ad hoc committees to consider specific
issues.

Remuneration. Each Independent Board Member receives compensation from the
Portfolio for his or her services, which includes retainer fees and specified
amounts for various committee services and for the Board Chairperson. No
additional compensation is paid to any Independent Board Member for travel time
to meetings, attendance at directors' educational seminars or conferences,
service on industry or association committees, participation as speakers at
directors' conferences or service on special fund industry director task forces
or subcommittees. Independent Board Members do not receive any employee benefits
such as pension or retirement benefits or health insurance from the Portfolio or
any fund in the DWS fund complex.

Board Members who are officers, directors, employees or stockholders of Deutsche
Asset Management or its affiliates receive no direct compensation from the
Portfolio, although they are compensated as employees of Deutsche Asset
Management, or its affiliates, and as a result may be deemed to participate in
fees paid by the Portfolio. The following tables show compensation from the
Portfolio and aggregate compensation from all of the funds in the DWS fund
complex received by each Independent Board Member during the calendar year 2008.
Mr. Schwarzer is an interested person of the Portfolio and received no
compensation from the Portfolio or any fund in the DWS fund complex during the
relevant periods.

<TABLE>
<CAPTION>
                                        Aggregate Compensation           Total Compensation
                                     from DWS Alternative Asset             from Fund and
  Name of Board Member                  Allocation Plus VIP(5)           DWS Fund Complex(1)
  --------------------                  ----------------------           -------------------
<S>                                               <C>                           <C>
  John W. Ballantine                              $0                            $237,500
  Henry P. Becton, Jr.(2)                         $0                            $246,000
  Dawn-Marie Driscoll(2)(3)                       $0                            $292,500
  Keith R. Fox(2)                                 $0                            $229,500
  Paul K. Freeman                                 $0                            $255,000
  Kenneth C. Froewiss                             $0                            $226,750
  Richard J. Herring(2)                           $0                            $240,000
  William McClayton(4)                            $0                            $257,500
  Rebecca W. Rimel(2)                             $0                            $233,500
  William N. Searcy, Jr.                          $0                            $238,000
  Jean Gleason Stromberg                          $0                            $225,500
  Robert H. Wadsworth                             $0                            $273,500

(1)      The DWS fund complex is composed of 136 funds as of December 31, 2008.

(2)      Aggregate compensation includes amounts paid to the Board Members for
         special meetings of ad hoc committees of the Board in connection with
         the consolidation of the DWS fund boards and various funds, meetings
         for considering fund expense simplification initiatives, and
         consideration of issues specific to the Portfolio's direct shareholders
         (i.e., those shareholders who did not purchase shares through financial
         intermediaries). Such amounts totaled $8,000 for Mr. Becton, $2,000 for
         Ms. Driscoll, $2,000 for Mr. Fox, $2,000 for Dr. Herring and $8,000 for
         Ms. Rimel. These meeting fees were borne by the funds.

(3)      Includes $70,000 in annual retainer fees received by Ms. Driscoll as
         Chairperson of DWS funds.

(4)      Includes $15,000 paid to Mr. McClayton for numerous special meetings of
         an ad hoc committee of the former Chicago Board in connection with
         board consolidation initiatives.

(5)      The Portfolio commenced operations on January 20, 2009.

Board Member Ownership in the Portfolios

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Portfolio and DWS fund complex as of December
31, 2008.

                                            Dollar Range of Beneficial            Aggregate Dollar Range of
                                                     Ownership               Ownership in all Funds Overseen by
                                             in DWS Alternative Asset                   Board Member
Board Member                                    Allocation Plus VIP              in the DWS Fund Complex(1)
------------                                    -------------------              --------------------------

Independent Board Member:
-------------------------

John W. Ballantine                                     None                                Over $100,000
Henry P. Becton, Jr.                                   None                                Over $100,000
Dawn-Marie Driscoll                                    None                                Over $100,000
Keith R. Fox                                           None                                Over $100,000
Paul K. Freeman                                        None                                Over $100,000
Kenneth C. Froewiss                                    None                                Over $100,000
Richard J. Herring                                     None                                Over $100,000
William McClayton                                      None                                Over $100,000
Rebecca W. Rimel                                       None                                Over $100,000
William N. Searcy, Jr.                                 None                                Over $100,000
Jean Gleason Stromberg                                 None                                Over $100,000
Robert H. Wadsworth                                    None                                Over $100,000

Interested Board Member:
------------------------

Axel Schwarzer                                         None                                Over $100,000

(1)      Securities beneficially owned as defined under the 1934 Act include
         direct and/or indirect ownership of securities where the Board Member's
         economic interest is tied to the securities, employment ownership and
         securities when the Board Member can exert voting power, and when the
         Board Member has authority to sell the securities. The dollar ranges
         are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000 and over
         $100,000.

Ownership in Securities of the Advisor and Related Companies

As reported to the Portfolio, the information in the following table reflects
ownership by the Independent Board Members and their immediate family members of
certain securities as of December 31, 2008. Immediate family members can be a
spouse, children residing in the same household including step and adoptive
children, and any dependents. The securities represent ownership in the Advisor
or principal underwriter of the Portfolio and any persons (other than a
registered investment company) directly or indirectly controlling, controlled
by, or under common control with the Advisor or principal underwriter of the
Portfolio (including Deutsche Bank AG).

                                                                                   Value of        Percent of
                                   Owner and                                     Securities on     Class on an
Independent                     Relationship to                     Title of     an Aggregate       Aggregate
Board Member                      Board Member         Company        Class          Basis            Basis
------------                      ------------         -------        -----          -----            -----

John W. Ballantine                                      None
Henry P. Becton, Jr.                                    None
Dawn-Marie Driscoll                                     None
Keith R. Fox                                            None
Paul K. Freeman                                         None
Kenneth C. Froewiss                                     None
Richard J. Herring                                      None
William McClayton                                       None
Rebecca W. Rimel                                        None
William N. Searcy, Jr.                                  None
Jean Gleason Stromberg                                  None
Robert H. Wadsworth                                     None
</TABLE>

Securities Beneficially Owned

As the Portfolio commenced operations on January 20, 2009, as of the date of
this SAI, the Board Members and officers of the Trust, as a group, did not own
outstanding shares of the Portfolio.

As of the date of this SAI, the Advisor owned all outstanding shares of the
Portfolio. Shareholders who have the power to vote large percentage of shares
(at least 25%) of the Portfolio can control the Portfolio and could determine
the outcome of s shareholders' meeting.




Agreement to Indemnify Independent Trustees for Certain Expenses


In connection with litigation or regulatory action related to possible improper
market timing or other improper trading activity or possible improper marketing
and sales activity in certain DWS Funds (the "Affected Funds"), DIMA has agreed
to indemnify and hold harmless the Affected Funds ("Fund Indemnification
Agreement") against any and all loss, damage, liability and expense, arising
from market timing or marketing and sales matters alleged in any enforcement
actions brought by governmental authorities involving or potentially affecting
the Affected Funds or DIMA ("Enforcement Actions") or that are the basis for
private actions brought by shareholders of the Affected Funds against the
Affected Funds, their directors and officers, DIMA and/or certain other parties
("Private Litigation"), or any proceedings or actions that may be threatened or
commenced in the future by any person (including governmental authorities),
arising from or similar to the matters alleged in the Enforcement Actions or
Private Litigation. In recognition of its undertaking to indemnify the Affected
Funds and in light of the rebuttable presumption generally afforded to
independent directors/trustees of investment companies that they have not
engaged in disabling conduct, DIMA has also agreed, subject to applicable law
and regulation, to indemnify certain (or, with respect to certain Affected
Funds, all) of the Independent Trustees of the Affected Funds, against certain
liabilities the Independent Trustees may incur from the matters alleged in any
Enforcement Actions or Private Litigation or arising from or similar to the
matters alleged in the Enforcement Actions or Private Litigation, and advance
expenses that may be incurred by the Independent Trustees in connection with any
Enforcement Actions or Private Litigation. DIMA is not, however, required to
provide indemnification and advancement of expenses: (1) with respect to any
proceeding or action which the Affected Funds' Board determines that the
Independent Trustees ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Trustees to the Affected Funds or their
shareholders to which the Independent Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the Independent Trustee's duties as a director or trustee of the Affected
Funds as determined in a final adjudication in such action or proceeding. The
estimated amount of any expenses that may be advanced to the Independent
Trustees or indemnity that may be payable under the indemnity agreements is
currently unknown. These agreements by DIMA will survive the termination of the
investment management agreements between DIMA and the Affected Funds.

                               TRUST ORGANIZATION

The Trust was organized as a business trust under the laws of Massachusetts on
January 22, 1987. On February 6, 2006 the Trust changed its name from "Scudder
Variable Series II" to "DWS Variable Series II." The Trust may issue an
unlimited number of shares of beneficial interest all having no par value. Since
the Trust offers multiple portfolios, it is known as a "series company."
Currently, the Portfolio offered herein offers one class of shares: Class A. The
Portfolio's Class A shares have equal rights with respect to dividends, assets
and liquidation subject to any preferences, rights or privileges of any classes
of shares of the Portfolio. Shares are fully paid and nonassessable when issued,
and have no preemptive or conversion rights.

Information about the Portfolio's investment performance will be contained in
the Trust's 2008 Annual Report to Shareholders, which may be obtained without
charge from the Trust or from Participating Insurance Companies which offer the
Portfolio.

The Trust is generally not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Trust ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees if a meeting is called for such
purpose; (b) the adoption of any contract for which approval is required by the
1940 Act; (c) any termination or reorganization of the Trust to the extent and
as provided in the Declaration of Trust; (d) any amendment of the Declaration of
Trust (other than amendments changing the name of the Trust or the Portfolio,
establishing a Portfolio, supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent provision
thereof); (e) as to whether a court action, preceding or claim should or should
not be brought or maintained derivatively or as a class action on behalf of the
Trust or the shareholders, to the same extent as the stockholders of a
Massachusetts business corporation; and (f) such additional matters as may be
required by law, the Declaration of Trust, the By-laws of the Trust, or any
registration of the Trust with the SEC or any state, or as the Trustees may
consider necessary or desirable. The shareholders also would vote upon changes
in fundamental investment objectives, policies or restrictions.

The Board may, at any time, terminate the Trust, the Portfolio or a class
without shareholder approval.

Under current interpretations of the 1940 Act, the Trust expects that
Participating Insurance Company shareholders will offer VLI and VA contract
holders the opportunity to instruct them as to how Portfolio shares attributable
to such contracts will be voted with respect to the matters described above. The
separate prospectuses describing the VLI and VA contracts include additional
disclosure of how contract holder voting rights are computed.

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Trust. The Declaration of Trust, however, contains provisions designed to
protect shareholders from liability for acts or obligations of the Trust and
requires that notice of such provisions be given in each agreement, obligation
or instrument entered into or executed by the Trust or the trustees. Moreover,
the Declaration of Trust provides for indemnification out of Trust property for
all losses and expenses of any shareholders held personally liable for the
obligations of the Trust and the Trust will be covered by insurance which the
trustees consider adequate to cover foreseeable tort claims. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
considered by DIMA remote and not material since it is limited to circumstances
in which the provisions limiting liability are inoperative and the Trust itself
is unable to meet its obligations.

The Declaration of Trust further provides that the trustees will not be liable
for errors of judgment or mistakes of fact or law. The Declaration of Trust does
not protect a trustee against any liability to which he or she should otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties of a trustee. The Declaration of Trust permits
the Trust to purchase insurance against certain liabilities on behalf of the
Trustees.


                             PROXY VOTING GUIDELINES


The Trust has delegated proxy voting responsibilities to the Advisor, subject to
the Board's general oversight. The Advisor votes proxies pursuant to the proxy
voting policy and guidelines set forth in Appendix A to this SAI).

You may obtain information about how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 by visiting the
Securities and Exchange Commission's Web site at www.sec.gov or by visiting our
Web site at: www.dws-investments.com (click on "proxy voting" at the bottom of
the page).


                              FINANCIAL STATEMENTS

Because the Portfolio has not commenced operations as of the date of this
Statement of Additional Information, no financial statements are available.

                             ADDITIONAL INFORMATION

The CUSIP number of the class of the Portfolio offered herein is:


DWS Alternative Asset Allocation Plus VIP Class A:. 23338H 370


DWS Alternative Asset Allocation Plus VIP has a fiscal year ending December 31.


Many of the investment changes in the Portfolio will be made at prices different
from those prevailing at the time they may be reflected in a regular report to
shareholders of the Portfolio. These transactions will reflect investment
decisions made by the Advisor in light of the Portfolio's investment objective
and policies, its other portfolio holdings and tax considerations, and should
not be construed as recommendations for similar action by other investors.

The Portfolio's Prospectus and this Statement of Additional Information omit
certain information contained in the Registration Statement which the Portfolio
has filed with the SEC under the 1933 Act and reference is hereby made to the
Registration Statement for further information with respect to the Portfolio and
the securities offered hereby. This Registration Statement and its amendments
are available for inspection by the public at the SEC in Washington, D.C.





                      APPENDIX A -- PROXY VOTING GUIDELINES

       Deutsche Asset Management ("AM") Proxy Voting Policy and Guidelines


I.       INTRODUCTION

AM has adopted and implemented the following policies and procedures, which it
believes are reasonably designed to ensure that proxies are voted in the best
economic interest of clients, in accordance with its fiduciary duties and local
regulation. These Proxy Voting Policies, Procedures and Guidelines shall apply
to all accounts managed by US domiciled advisers and to all US client accounts
managed by non US regional offices. Non US regional offices are required to
maintain procedures and to vote proxies as may be required by law on behalf of
their non US clients. In addition, AM's proxy policies reflect the fiduciary
standards and responsibilities for ERISA accounts.

The attached guidelines represent a set of global recommendations that were
determined by the Global Proxy Voting Sub-Committee ("the GPVSC"). These
guidelines were developed to provide AM with a comprehensive list of
recommendations that represent how AM will generally vote proxies for its
clients. The recommendations derived from the application of these guidelines
are not intended to influence the various AM legal entities either directly or
indirectly by parent or affiliated companies. In addition, the organizational
structures and documents of the various AM legal entities allows, where
necessary or appropriate, the execution by individual AM subsidiaries of the
proxy voting rights independently of any DB parent or affiliated company. This
applies in particular to non U.S. fund management companies. The individuals
that make proxy voting decisions are also free to act independently, subject to
the normal and customary supervision by the management/boards of these AM legal
entities.


II.      AM'S PROXY VOTING RESPONSIBILITIES

Proxy votes are the property of AM's advisory clients.(1) As such, AM's
authority and responsibility to vote such proxies depend upon its contractual
relationships with its clients. AM has delegated responsibility for effecting
its advisory clients' proxy votes to Institutional Shareholder Services ("ISS"),
an independent third-party proxy voting specialist. ISS votes AM's advisory
clients' proxies in accordance with AM's proxy guidelines or AM's specific
instructions. Where a client has given specific instructions as to how a proxy
should be voted, AM will notify ISS to carry out those instructions. Where no
specific instruction exists, AM will follow the procedures in voting the proxies
set forth in this document. Certain Taft-Hartley clients may direct AM to have
ISS vote their proxies in accordance with Taft Hartley voting Guidelines

_____________________

(1)      For purposes of these Policies and Procedures, "clients" refers to
         persons or entities: for which AM serves as investment adviser or
         sub-adviser; for which AM votes proxies; and that have an economic or
         beneficial ownership interest in the portfolio securities of issuers
         soliciting such proxies.

Clients may in certain instances contract with their custodial agent and notify
AM that they wish to engage in securities lending transactions. In such cases,
it is the responsibility of the custodian to deduct the number of shares that
are on loan so that they do not get voted twice.


III.     POLICIES

1.       Proxy voting activities are conducted in the best economic interest of
         clients

AM has adopted the following policies and procedures to ensure that proxies are
voted in accordance with the best economic interest of its clients, as
determined by AM in good faith after appropriate review.

2.       The Global Proxy Voting Sub-Committee

The Global Proxy Voting Sub-Committee (the "GPVSC") is an internal working group
established by the applicable AM's Investment Risk Oversight Committee pursuant
to a written charter. The GPVSC is responsible for overseeing AM's proxy voting
activities, including:

(i)    adopting, monitoring and updating guidelines, attached as Exhibit A (the
       "Guidelines"), that provide how AM will generally vote proxies pertaining
       to a comprehensive list of common proxy voting matters;

(ii)   voting proxies where (A) the issues are not covered by specific client
       instruction or the Guidelines; (B) the Guidelines specify that the issues
       are to be determined on a case-by-case basis; or (C) where an exception
       to the Guidelines may be in the best economic interest of AM's clients;
       and

(iii)  monitoring the Proxy Vendor Oversight's proxy voting activities (see
       below).

AM's Proxy Vendor Oversight, a function of AM's Operations Group, is responsible
for coordinating with ISS to administer AM's proxy voting process and for voting
proxies in accordance with any specific client instructions or, if there are
none, the Guidelines, and overseeing ISS' proxy responsibilities in this regard.

3.       Availability of Proxy Voting Policies and Procedures and proxy voting
         record

Copies of these Policies and Procedures, as they may be updated from time to
time, are made available to clients as required by law and otherwise at AM's
discretion. Clients may also obtain information on how their proxies were voted
by AM as required by law and otherwise at AM's discretion; however, AM must not
selectively disclose its investment company clients' proxy voting records. The
Proxy Vendor Oversight will make proxy voting reports available to advisory
clients upon request. The investment companies' proxy voting records will be
disclosed to shareholders by means of publicly-available annual filings of each
company's proxy voting record for 12-month periods ended June 30 (see
"Recordkeeping" below), if so required by relevant law.


IV.      PROCEDURES

The key aspects of AM's proxy voting process are as follows:

1.       The GPVSC's Proxy Voting Guidelines

The Guidelines set forth the GPVSC's standard voting positions on a
comprehensive list of common proxy voting matters. The GPVSC has developed, and
continues to update the Guidelines based on consideration of current corporate
governance principles, industry standards, client feedback, and the impact of
the matter on issuers and the value of the investments.

The GPVSC will review the Guidelines as necessary to support the best economic
interests of AM's clients and, in any event, at least annually. The GPVSC will
make changes to the Guidelines, whether as a result of the annual review or
otherwise, taking solely into account the best economic interests of clients.
Before changing the Guidelines, the GPVSC will thoroughly review and evaluate
the proposed change and the reasons therefore, and the GPVSC Chair will ask
GPVSC members whether anyone outside of the AM organization (but within Deutsche
Bank and its affiliates) or any entity that identifies itself as a AM advisory
client has requested or attempted to influence the proposed change and whether
any member has a conflict of interest with respect to the proposed change. If
any such matter is reported to the GPVSC Chair, the Chair will promptly notify
the Conflicts of Interest Management Sub-Committee (see below) and will defer
the approval, if possible. Lastly, the GPVSC will fully document its rationale
for approving any change to the Guidelines.

The Guidelines may reflect a voting position that differs from the actual
practices of the public company(ies) within the Deutsche Bank organization or of
the investment companies for which AM or an affiliate serves as investment
adviser or sponsor. Investment companies, particularly closed-end investment
companies, are different from traditional operating companies. These differences
may call for differences in voting positions on the same matter. Further, the
manner in which AM votes investment company proxies may differ from proposals
for which a AM-advised or sponsored investment company solicits proxies from its
shareholders. As reflected in the Guidelines, proxies solicited by closed-end
(and open-end) investment companies are generally voted in accordance with the
pre-determined guidelines of ISS. See Section IV.3.B.

Funds ("Underlying Funds") in which Topiary Fund Management Fund of Funds (each,
a "Fund") invest, may from time to time seek to revise their investment terms
(i.e. liquidity, fees, etc.) or investment structure. In such event, the
Underlying Funds may require approval/consent from its investors to effect the
relevant changes. Topiary Fund Management has adopted Proxy Voting Procedures
which outline the process for these approvals.

2.       Specific proxy voting decisions made by the GPVSC

The Proxy Vendor Oversight will refer to the GPVSC all proxy proposals (i) that
are not covered by specific client instructions or the Guidelines; or (ii) that,
according to the Guidelines, should be evaluated and voted on a case-by-case
basis.

Additionally, if, the Proxy Vendor Oversight, the GPVSC Chair or any member of
the GPVSC, a portfolio manager, a research analyst or a sub-adviser believes
that voting a particular proxy in accordance with the Guidelines may not be in
the best economic interests of clients, that individual may bring the matter to
the attention of the GPVSC Chair and/or the Proxy Vendor Oversight.(2)

_____________________

(2)      The Proxy Vendor Oversight generally monitors upcoming proxy
         solicitations for heightened attention from the press or the industry
         and for novel or unusual proposals or circumstances, which may prompt
         the Proxy Vendor Oversight to bring the solicitation to the attention
         of the GPVSC Chair. AM portfolio managers, AM research analysts and
         sub-advisers also may bring a particular proxy vote to the attention of
         the GPVSC Chair, as a result of their ongoing monitoring of portfolio
         securities held by advisory clients and/or their review of the periodic
         proxy voting record reports that the GPVSC Chair distributes to AM
         portfolio managers and AM research analysts.

If the Proxy Vendor Oversight refers a proxy proposal to the GPVSC or the GPVSC
determines that voting a particular proxy in accordance with the Guidelines is
not in the best economic interests of clients, the GPVSC will evaluate and vote
the proxy, subject to the procedures below regarding conflicts.

The GPVSC endeavors to hold meetings to decide how to vote particular proxies
sufficiently before the voting deadline so that the procedures below regarding
conflicts can be completed before the GPVSC's voting determination.

3.       Certain proxy votes may not be cast

In some cases, the GPVSC may determine that it is in the best economic interests
of its clients not to vote certain proxies. If the conditions below are met with
regard to a proxy proposal, AM will abstain from voting:

o        Neither the Guidelines nor specific client instructions cover an issue;

o        ISS does not make a recommendation on the issue;

o        The GPVSC cannot convene on the proxy proposal at issue to make a
         determination as to what would be in the client's best interest. (This
         could happen, for example, if the Conflicts of Interest Management
         Sub-committee found that there was a material conflict or if despite
         all best efforts being made, the GPVSC quorum requirement could not be
         met).

In addition, it is AM's policy not to vote proxies of issuers subject to laws of
those jurisdictions that impose restrictions upon selling shares after proxies
are voted, in order to preserve liquidity. In other cases, it may not be
possible to vote certain proxies, despite good faith efforts to do so. For
example, some jurisdictions do not provide adequate notice to shareholders so
that proxies may be voted on a timely basis. Voting rights on securities that
have been loaned to third-parties transfer to those third-parties, with loan
termination often being the only way to attempt to vote proxies on the loaned
securities. Lastly, the GPVSC may determine that the costs to the client(s)
associated with voting a particular proxy or group of proxies outweighs the
economic benefits expected from voting the proxy or group of proxies.

The Proxy Vendor Oversight will coordinate with the GPVSC Chair regarding any
specific proxies and any categories of proxies that will not or cannot be voted.
The reasons for not voting any proxy shall be documented.

4.       Conflict of Interest Procedures

A. Procedures to Address Conflicts of Interest and Improper Influence

Overriding Principle. In the limited circumstances where the GPVSC votes
proxies,(3) the GPVSC will vote those proxies in accordance with what it, in
good faith, determines to be the best economic interests of AM's clients.(4)

_____________________

(3)      As mentioned above, the GPVSC votes proxies (i) where neither a
         specific client instruction nor a Guideline directs how the proxy
         should be voted, (ii) where the Guidelines specify that an issue is to
         be determined on a case by case basis or (iii) where voting in
         accordance with the Guidelines may not be in the best economic
         interests of clients.

(4)      The Proxy Vendor Oversight, who serves as the non-voting secretary of
         the GPVSC, may receive routine calls from proxy solicitors and other
         parties interested in a particular proxy vote. Any contact that
         attempts to exert improper pressure or influence shall be reported to
         the Conflicts of Interest Management Sub-Committee.

Independence of the GPVSC. As a matter of Compliance policy, the GPVSC and the
Proxy Vendor Oversight are structured to be independent from other parts of
Deutsche Bank. Members of the GPVSC and the employee responsible for Proxy
Vendor Oversight are employees of AM. As such, they may not be subject to the
supervision or control of any employees of Deutsche Bank Corporate and
Investment Banking division ("CIB"). Their compensation cannot be based upon
their contribution to any business activity outside of AM without prior approval
of Legal and Compliance. They can have no contact with employees of Deutsche
Bank outside of the Private Client and Asset Management division ("PCAM")
regarding specific clients, business matters or initiatives without the prior
approval of Legal and Compliance. They furthermore may not discuss proxy votes
with any person outside of AM (and within AM only on a need to know basis).

Conflict Review Procedures. There will be a committee (the "Conflicts of
Interest Management Sub-Committee") established within AM that will monitor for
potential material conflicts of interest in connection with proxy proposals that
are to be evaluated by the GPVSC. Promptly upon a determination that a vote
shall be presented to the GPVSC, the GPVSC Chair shall notify the Conflicts of
Interest Management Sub-Committee. The Conflicts of Interest Management
Sub-Committee shall promptly collect and review any information deemed
reasonably appropriate to evaluate, in its reasonable judgment, if AM or any
person participating in the proxy voting process has, or has the appearance of,
a material conflict of interest. For the purposes of this policy, a conflict of
interest shall be considered "material" to the extent that a reasonable person
could expect the conflict to influence, or appear to influence, the GPVSC's
decision on the particular vote at issue. GPVSC should provide the Conflicts of
Interest Management Sub-Committee a reasonable amount of time (no less than 24
hours) to perform all necessary and appropriate reviews. To the extent that a
conflicts review can not be sufficiently completed by the Conflicts of Interest
Management Sub-Committee the proxies will be voted in accordance with the
standard guidelines.

The information considered by the Conflicts of Interest Management Sub-Committee
may include without limitation information regarding (i) AM client
relationships; (ii) any relevant personal conflict known by the Conflicts of
Interest Management Sub-Committee or brought to the attention of that
sub-committee; (iii) and any communications with members of the GPVSC (or anyone
participating or providing information to the GPVSC) and any person outside of
the AM organization (but within Deutsche Bank and its affiliates) or any entity
that identifies itself as a AM advisory client regarding the vote at issue. In
the context of any determination, the Conflicts of Interest Management
Sub-Committee may consult with, and shall be entitled to rely upon, all
applicable outside experts, including legal counsel.

Upon completion of the investigation, the Conflicts of Interest Management
Sub-Committee will document its findings and conclusions. If the Conflicts of
Interest Management Sub-Committee determines that (i) AM has a material conflict
of interest that would prevent it from deciding how to vote the proxies
concerned without further client consent or (ii) certain individuals should be
recused from participating in the proxy vote at issue, the Conflicts of Interest
Management Sub-Committee will so inform the GPVSC chair.

If notified that AM has a material conflict of interest as described above, the
GPVSC chair will obtain instructions as to how the proxies should be voted
either from (i) if time permits, the effected clients, or (ii) in accordance
with the standard guidelines. If notified that certain individuals should be
recused from the proxy vote at issue, the GPVSC Chair shall do so in accordance
with the procedures set forth below.

Note: Any AM employee who becomes aware of a potential, material conflict of
interest in respect of any proxy vote to be made on behalf of clients shall
notify Compliance. Compliance shall call a meeting of the conflict review
committee to evaluate such conflict and determine a recommended course of
action.

Procedures to be followed by the GPVSC. At the beginning of any discussion
regarding how to vote any proxy, the GPVSC Chair (or his or her delegate) will
inquire as to whether any GPVSC member (whether voting or ex officio) or any
person participating in the proxy voting process has a personal conflict of
interest or has actual knowledge of an actual or apparent conflict that has not
been reported to the Conflicts of Interest Management Sub-Committee.

The GPVSC Chair also will inquire of these same parties whether they have actual
knowledge regarding whether any director, officer or employee outside of the AM
organization (but within Deutsche Bank and its affiliates) or any entity that
identifies itself as a AM advisory client, has: (i) requested that AM, the Proxy
Vendor Oversight (or any member thereof) or a GPVSC member vote a particular
proxy in a certain manner; (ii) attempted to influence AM, the Proxy Vendor
Oversight (or any member thereof), a GPVSC member or any other person in
connection with proxy voting activities; or (iii) otherwise communicated with a
GPVSC member or any other person participating or providing information to the
GPVSC regarding the particular proxy vote at issue, and which incident has not
yet been reported to the Conflicts of Interest Management Sub- Committee.

If any such incidents are reported to the GPVSC Chair, the Chair will promptly
notify the Conflicts of Interest Management Sub-Committee and, if possible, will
delay the vote until the Conflicts of Interest Management Sub-Committee can
complete the conflicts report. If a delay is not possible, the Conflicts of
Interest Management Sub-Committee will instruct the GPVSC whether anyone should
be recused from the proxy voting process, or whether AM should vote the proxy in
accordance with the standard guidelines, seek instructions as to how to vote the
proxy at issue from ISS or, if time permits, the effected clients. These
inquiries and discussions will be properly reflected in the GPVSC's minutes.

Duty to Report. Any AM employee, including any GPVSC member (whether voting or
ex officio), that is aware of any actual or apparent conflict of interest
relevant to, or any attempt by any person outside of the AM organization (but
within Deutsche Bank and its affiliates) or any entity that identifies itself as
a AM advisory client to influence, how AM votes its proxies has a duty to
disclose the existence of the situation to the GPVSC Chair (or his or her
designee) and the details of the matter to the Conflicts of Interest Management
Sub-Committee. In the case of any person participating in the deliberations on a
specific vote, such disclosure should be made before engaging in any activities
or participating in any discussion pertaining to that vote.

Recusal of Members. The GPVSC will recuse from participating in a specific proxy
vote any GPVSC members (whether voting or ex officio) and/or any other person
who (i) are personally involved in a material conflict of interest; or (ii) who,
as determined by the Conflicts of Interest Management Sub-Committee, have actual
knowledge of a circumstance or fact that could effect their independent
judgment, in respect of such vote. The GPVSC will also exclude from
consideration the views of any person (whether requested or volunteered) if the
GPVSC or any member thereof knows, or if the Conflicts of Interest Management
Sub-Committee has determined, that such other person has a material conflict of
interest with respect to the particular proxy, or has attempted to influence the
vote in any manner prohibited by these policies.

If, after excluding all relevant GPVSC voting members pursuant to the paragraph
above, there are three or more GPVSC voting members remaining, those remaining
GPVSC members will determine how to vote the proxy in accordance with these
Policies and Procedures. If there are fewer than three GPVSC voting members
remaining, the GPVSC Chair will vote the proxy in accordance with the standard
guidelines, will obtain instructions as to how to have the proxy voted from, if
time permits, the effected clients and otherwise from ISS.

B.       Investment Companies and Affiliated Public Companies

Investment Companies. As reflected in the Guidelines, all proxies solicited by
open-end and closed-end investment companies are voted in accordance with the
pre-determined guidelines of ISS, unless the investment company client directs
AM to vote differently on a specific proxy or specific categories of proxies.
However, regarding investment companies for which AM or an affiliate serves as
investment adviser or principal underwriter, such proxies are voted in the same
proportion as the vote of all other shareholders (i.e., "mirror" or "echo"
voting). Master fund proxies solicited from feeder funds are voted in accordance
with applicable provisions of Section 12 of the Investment Company Act of 1940.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Affiliated Public Companies. For proxies solicited by non-investment company
issuers of or within the Deutsche Bank organization, e.g., Deutsche bank itself,
these proxies will be voted in the same proportion as the vote of other
shareholders (i.e., "mirror" or "echo" voting).

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.

C.       Other Procedures That Limit Conflicts of Interest

AM and other entities in the Deutsche Bank organization have adopted a number of
policies, procedures and internal controls that are designed to avoid various
conflicts of interest, including those that may arise in connection with proxy
voting, including:

o        Deutsche Bank Americas Restricted Activities Policy. This policy
         provides for, among other things, independence of AM employees from
         CIB, and information barriers between AM and other affiliates.
         Specifically, no AM employee may be subject to the supervision or
         control of any employee of CIB. No AM employee shall have his or her
         compensation based upon his or her contribution to any business
         activity within the Bank outside of the business of AM, without the
         prior approval of Legal or Compliance. Further, no employee of CIB
         shall have any input into the compensation of a AM employee without the
         prior approval of Legal or Compliance. Under the information barriers
         section of this policy, as a general rule, AM employees who are
         associated with the investment process should have no contact with
         employees of Deutsche Bank or its affiliates, outside of PCAM,
         regarding specific clients, business matters, or initiatives. Further,
         under no circumstances should proxy votes be discussed with any
         Deutsche Bank employee outside of AM (and should only be discussed on a
         need-to-know basis within AM).

Other relevant internal policies include the Deutsche Bank Americas Code of
Professional Conduct, the Deutsche Asset Management Information Sharing
Procedures, the Deutsche Asset Management Code of Ethics, the Sarbanes-Oxley
Senior Officer Code of Ethics, and the Deutsche Bank Group Code of Conduct. The
GPVSC expects that these policies, procedures and internal controls will greatly
reduce the chance that the GPVSC (or, its members) would be involved in, aware
of or influenced by, an actual or apparent conflict of interest.


V.       RECORDKEEPING

At a minimum, the following types of records must be properly maintained and
readily accessible in order to evidence compliance with this policy.

o        AM will maintain a record of each vote cast by AM that includes among
         other things, company name, meeting date, proposals presented, vote
         cast and shares voted.

o        The Proxy Vendor Oversight maintains records for each of the proxy
         ballots it votes. Specifically, the records include, but are not
         limited to:

         -        The proxy statement (and any additional solicitation
                  materials) and relevant portions of annual statements.

         -        Any additional information considered in the voting process
                  that may be obtained from an issuing company, its agents or
                  proxy research firms.

         -        Analyst worksheets created for stock option plan and share
                  increase analyses.

         -        Proxy Edge print-screen of actual vote election.

o        AM will retain these Policies and Procedures and the Guidelines; will
         maintain records of client requests for proxy voting information; and
         will retain any documents the Proxy Vendor Oversight or the GPVSC
         prepared that were material to making a voting decision or that
         memorialized the basis for a proxy voting decision.

o        The GPVSC also will create and maintain appropriate records documenting
         its compliance with these Policies and Procedures, including records of
         its deliberations and decisions regarding conflicts of interest and
         their resolution.

o        With respect to AM's investment company clients, ISS will create and
         maintain records of each company's proxy voting record for 12-month
         periods ended June 30. AM will compile the following information for
         each matter relating to a portfolio security considered at any
         shareholder meeting held during the period covered by the report and
         with respect to which the company was entitled to vote:

         -        The name of the issuer of the portfolio security;

         -        The exchange ticker symbol of the portfolio security (if
                  symbol is available through reasonably practicable means);

         -        The Council on Uniform Securities Identification Procedures
                  number for the portfolio security (if the number is available
                  through reasonably practicable means);

         -        The shareholder meeting date;

         -        A brief identification of the matter voted on;

         -        Whether the matter was proposed by the issuer or by a security
                  holder;

         -        Whether the company cast its vote on the matter;

         -        How the company cast its vote (e.g., for or against proposal,
                  or abstain; for or withhold regarding election of directors);
                  and

         -        Whether the company cast its vote for or against management.

Note: This list is intended to provide guidance only in terms of the records
that must be maintained in accordance with this policy. In addition, please note
that records must be maintained in accordance with the applicable AM Records
Management Policy.

With respect to electronically stored records, "properly maintained" is defined
as complete, authentic (unalterable) usable and backed-up. At a minimum, records
should be retained for a period of not less than six years (or longer, if
necessary to comply with applicable regulatory requirements), the first three
years in an appropriate AM office.


VI.      THE GPVSC'S OVERSIGHT ROLE

In addition to adopting the Guidelines and making proxy voting decisions on
matters referred to it as set forth above, the GPVSC will monitor the proxy
voting process by reviewing summary proxy information presented by ISS. The
GPVSC will use this review process to determine, among other things, whether any
changes should be made to the Guidelines. This review will take place at least
quarterly and will be documented in the GPVSC's minutes.


Attachment A - Global Proxy Voting Guidelines







                            Deutsche Asset Management

                         Global Proxy Voting Guidelines



                             As Amended October 2008


                                [GRAPHIC OMITTED]
Table of contents

I        Board Of Directors And Executives

         A        Election Of Directors

         B        Classified Boards Of Directors

         C        Board And Committee Independence

         D        Liability And Indemnification Of Directors

         E        Qualifications Of Directors

         F        Removal Of Directors And Filling Of Vacancies

         G        Proposals To Fix The Size Of The Board

         H        Proposals to Restrict Chief Executive Officer's Service on

                  Multiple Boards

         I        Proposals to Restrict Supervisory Board Members Service on

                  Multiple Boards

         J        Proposals to Establish Audit Committees

II       Capital Structure

         A        Authorization Of Additional Shares

         B        Authorization Of "Blank Check" Preferred Stock

         C        Stock Splits/Reverse Stock Splits

         D        Dual Class/Supervoting Stock

         E        Large Block Issuance

         F        Recapitalization Into A Single Class Of Stock

         G        Share Repurchases

         H        Reductions In Par Value

III      Corporate Governance Issues

         A        Confidential Voting

         B        Cumulative Voting

         C        Supermajority Voting Requirements

         D        Shareholder Right To Vote

IV       Compensation

         A        Establishment of a Remuneration Committee

         B        Executive And Director Stock Option Plans

         C        Employee Stock Option/Purchase Plans

         D        Golden Parachutes

         E        Proposals To Limit Benefits Or Executive Compensation

         F        Option Expensing

         G        Management board election and motion

         H        Remuneration (variable pay)

         I        Long-term incentive plans

         J        Shareholder Proposals Concerning "Pay For Superior
                  Performance"

         K        Executive Compensation Advisory

V        Anti-Takeover Related Issues

         A        Shareholder Rights Plans ("Poison Pills")

         B        Reincorporation

         C        Fair-Price Proposals

         D        Exemption From State Takeover Laws

         E        Non-Financial Effects Of Takeover Bids

VI       Mergers & Acquisitions

VII      Social & Political Issues

         A        Labor & Human Rights

         B        Diversity & Equality

         C        Health & Safety

         D        Government/Military

         E        Tobacco

VIII     Environmental Issues

IX       Miscellaneous Items

         A        Ratification Of Auditors

         B        Limitation Of Non-Audit Services Provided By Independent
                  Auditor

         C        Audit Firm Rotation

         D        Transaction Of Other Business

         E        Motions To Adjourn The Meeting

         F        Bundled Proposals

         G        Change Of Company Name

         H        Proposals Related To The Annual Meeting

         I        Reimbursement Of Expenses Incurred From Candidate Nomination

         J        Investment Company Proxies

         K        International Proxy Voting


These Guidelines may reflect a voting position that differs from the actual
practices of the public company (ies) within the Deutsche Bank organization or
of the investment companies for which AM or an affiliate serves as investment
adviser or sponsor.

NOTE: Because of the unique structure and regulatory scheme applicable to
closed-end investment companies, the voting guidelines (particularly those
related to governance issues) generally will be inapplicable to holdings of
closed-end investment companies. As a result, determinations on the appropriate
voting recommendation for closed-end investment company shares will be made on a
case-by-case basis.


I.       Board of Directors and Executives

A.       Election of Directors

Routine: AM Policy is to vote "for" the uncontested election of directors. Votes
for a director in an uncontested election will be withheld in cases where a
director has shown an inability to perform his/her duties in the best interests
of the shareholders.

Proxy contest: In a proxy contest involving election of directors, a
case-by-case voting decision will be made based upon analysis of the issues
involved and the merits of the incumbent and dissident slates of directors. AM
will incorporate the decisions of a third party proxy research vendor,
currently, Institutional Shareholder Services ("ISS") subject to review by the
Proxy Voting Sub-Committee (GPVSC) as set forth in the AM's Proxy Voting
Policies and Procedures.

Rationale: The large majority of corporate directors fulfill their fiduciary
obligation and in most cases support for management's nominees is warranted. As
the issues relevant to a contested election differ in each instance, those cases
must be addressed as they arise.

B.       Classified Boards of Directors

AM policy is to vote against proposals to classify the board and for proposals
to repeal classified boards and elect directors annually.

Rationale: Directors should be held accountable on an annual basis. By
entrenching the incumbent board, a classified board may be used as an
anti-takeover device to the detriment of the shareholders in a hostile take-over
situation.

C.       Board and Committee Independence

AM policy is to vote:

1.       "For" proposals that require that a certain percentage (majority up to
         66 2/3%) of members of a board of directors be comprised of independent
         or unaffiliated directors.

2.       "For" proposals that require all members of a company's compensation,
         audit, nominating, or other similar committees be comprised of
         independent or unaffiliated directors.

3.       "Against" shareholder proposals to require the addition of special
         interest, or constituency, representatives to boards of directors.

4.       "For" separation of the Chairman and CEO positions.

5.       "Against" proposals that require a company to appoint a Chairman who is
         an independent director.

Rationale: Board independence is a cornerstone of effective governance and
accountability. A board that is sufficiently independent from management assures
that shareholders' interests are adequately represented. However, the Chairman
of the board must have sufficient involvement in and experience with the
operations of the company to perform the functions required of that position and
lead the company.

No director qualifies as 'independent' unless the board of directors
affirmatively determines that the director has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an
organization that has a relationship with the company).

Whether a director is in fact not "independent" will depend on the laws and
regulations of the primary market for the security and the exchanges, if any, on
which the security trades.

D.       Liability and Indemnification of Directors

AM policy is to vote "for" management proposals to limit directors' liability
and to broaden the indemnification of directors, unless broader indemnification
or limitations on directors' liability would effect shareholders' interests in
pending litigation.

Rationale: While shareholders want directors and officers to be responsible for
their actions, it is not in the best interests of the shareholders for them to
be to risk averse. If the risk of personal liability is too great, companies may
not be able to find capable directors willing to serve. We support expanding
coverage only for actions taken in good faith and not for serious violations of
fiduciary obligation or negligence.

E.       Qualifications of Directors

AM policy is to follow management's recommended vote on either management or
shareholder proposals that set retirement ages for directors or require specific
levels of stock ownership by directors.

Rationale: As a general rule, the board of directors, and not the shareholders,
is most qualified to establish qualification policies.

F.       Removal of Directors and Filling of Vacancies

AM policy is to vote "against" proposals that include provisions that directors
may be removed only for cause or proposals that include provisions that only
continuing directors may fill board vacancies.

Rationale: Differing state statutes permit removal of directors with or without
cause. Removal of directors for cause usually requires proof of self-dealing,
fraud or misappropriation of corporate assets, limiting shareholders' ability to
remove directors except under extreme circumstances. Removal without cause
requires no such showing.

Allowing only incumbent directors to fill vacancies can serve as an
anti-takeover device, precluding shareholders from filling the board until the
next regular election.

G.       Proposals to Fix the Size of the Board

AM policy is to vote:

1.       "For" proposals to fix the size of the board unless: (a) no specific
         reason for the proposed change is given; or (b) the proposal is part of
         a package of takeover defenses.

2.       "Against" proposals allowing management to fix the size of the board
         without shareholder approval.

Rationale: Absent danger of anti-takeover use, companies should be granted a
reasonable amount of flexibility in fixing the size of its board.

H.       Proposals to Restrict Chief Executive Officer's Service on Multiple
         Boards

AM policy is to vote "For" proposals to restrict a Chief Executive Officer from
serving on more than three outside boards of directors.

Rationale: Chief Executive Officer must have sufficient time to ensure that
shareholders' interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.

I.       Proposals to Restrict Supervisory Board Members Service on Multiple
         Boards (For FFT Securities)

AM policy is to vote "for" proposals to restrict a Supervisory Board Member from
serving on more than five supervisory boards.

Rationale: We consider a strong, independent and knowledgeable supervisory board
as important counter-balance to executive management to ensure that the
interests of shareholders are fully reflected by the company.

Full information should be disclosed in the annual reports and accounts to allow
all shareholders to judge the success of the supervisory board controlling their
company.

Supervisory Board Member must have sufficient time to ensure that shareholders'
interests are represented adequately.

Note: A director's service on multiple closed-end fund boards within a fund
complex are treated as service on a single Board for the purpose of the proxy
voting guidelines.

J.       Proposals to Establish Audit Committees (For FFT and U.S. Securities)
         AM policy is to vote "for" proposals that require the establishment of
         audit committees.

Rationale: The audit committee should deal with accounting and risk management
related questions, verifies the independence of the auditor with due regard to
possible conflicts of interest. It also should determine the procedure of the
audit process.


II.      Capital Structure

A.       Authorization of Additional Shares (For U.S. Securities)

AM policy is to vote "for" proposals to increase the authorization of existing
classes of stock that do not exceed a 3:1 ratio of shares authorized to shares
outstanding for a large cap company, and do not exceed a 4:1 ratio of shares
authorized to shares outstanding for a small-midcap company (companies having a
market capitalization under one billion U.S. dollars.).

Rationale: While companies need an adequate number of shares in order to carry
on business, increases requested for general financial flexibility must be
limited to protect shareholders from their potential use as an anti-takeover
device. Requested increases for specifically designated, reasonable business
purposes (stock split, merger, etc.) will be considered in light of those
purposes and the number of shares required.

B.       Authorization of "Blank Check" Preferred Stock (For U.S. Securities)

AM policy is to vote:

1.   "Against" proposals to create blank check preferred stock or to increase
     the number of authorized shares of blank check preferred stock unless the
     company expressly states that the stock will not be used for anti-takeover
     purposes and will not be issued without shareholder approval.

2.   "For" proposals mandating shareholder approval of blank check stock
     placement.

Rationale: Shareholders should be permitted to monitor the issuance of classes
of preferred stock in which the board of directors is given unfettered
discretion to set voting, dividend, conversion and other rights for the shares
issued.

C.       Stock Splits/Reverse Stock Splits

AM policy is to vote "for" stock splits if a legitimate business purpose is set
forth and the split is in the shareholders' best interests. A vote is cast "for"
a reverse stock split only if the number of shares authorized is reduced in the
same proportion as the reverse split or if the effective increase in authorized
shares (relative to outstanding shares) complies with the proxy guidelines for
common stock increases (see, Section II.A, above.)

Rationale: Generally, stock splits do not detrimentally effect shareholders.
Reverse stock splits, however, may have the same result as an increase in
authorized shares and should be analyzed accordingly.

D.       Dual Class/Supervoting Stock

AM policy is to vote "against" proposals to create or authorize additional
shares of super-voting stock or stock with unequal voting rights.

Rationale: The "one share, one vote" principal ensures that no shareholder
maintains a voting interest exceeding their equity interest in the company.

E.       Large Block Issuance (For U.S. Securities)

AM policy is to address large block issuances of stock on a case-by-case basis,
incorporating the recommendation of an independent third party proxy research
firm (currently ISS) subject to review by the GPVSC as set forth in AM's Proxy
Policies and Procedures.

Additionally, AM supports proposals requiring shareholder approval of large
block issuances.

Rationale: Stock issuances must be reviewed in light of the business
circumstances leading to the request and the potential impact on shareholder
value.

F.       Recapitalization into a Single Class of Stock

AM policy is to vote "for" recapitalization plans to provide for a single class
of common stock, provided the terms are fair, with no class of stock being
unduly disadvantaged.

Rationale: Consolidation of multiple classes of stock is a business decision
that may be left to the board and/management if there is no adverse effect on
shareholders.

G.       Share Repurchases

AM policy is to vote "for" share repurchase plans provided all shareholders are
able to participate on equal terms.

Rationale: Buybacks are generally considered beneficial to shareholders because
they tend to increase returns to the remaining shareholders.

H.       Reductions in Par Value

AM policy is to vote "for" proposals to reduce par value, provided a legitimate
business purpose is stated (e.g., the reduction of corporate tax
responsibility.)

Rationale: Usually, adjustments to par value are a routine financial decision
with no substantial impact on shareholders.


III.     Corporate Governance Issues

A.       Confidential Voting

AM policy is to vote "for" proposals to provide for confidential voting and
independent tabulation of voting results and to vote "against" proposals to
repeal such provisions.

Rationale: Confidential voting protects the privacy rights of all shareholders.
This is particularly important for employee-shareholders or shareholders with
business or other affiliations with the company, who may be vulnerable to
coercion or retaliation when opposing management. Confidential voting does not
interfere with the ability of corporations to communicate with all shareholders,
nor does it prohibit shareholders from making their views known directly to
management.

B.       Cumulative Voting (For U.S. Securities)

AM policy is to vote "against" shareholder proposals requesting cumulative
voting and "for"management proposals to eliminate it. The protections afforded
shareholders by cumulative voting are not necessary when a company has a history
of good performance and does not have a concentrated ownership interest.
Accordingly, a vote is cast "against" cumulative voting and "for" proposals to
eliminate it if:

a)       The company has a five year return on investment greater than the
         relevant industry index,

b)       All directors and executive officers as a group beneficially own less
         than 10% of the outstanding stock, and

c)       No shareholder (or voting block) beneficially owns 15% or more of the
         company.

Thus, failure of any one of the three criteria results in a vote for cumulative
voting in accordance with the general policy.

Rationale: Cumulative voting is a tool that should be used to ensure that
holders of a significant number of shares may have board representation;
however, the presence of other safeguards may make their use unnecessary.

C.       Supermajority Voting Requirements

AM policy is to vote "against" management proposals to require a supermajority
vote to amend the charter or bylaws and to vote "for" shareholder proposals to
modify or rescind existing supermajority requirements.

*Exception made when company holds a controlling position and seeks to lower
threshold to maintain control and/or make changes to corporate by-laws.

Rationale: Supermajority voting provisions violate the democratic principle that
a simple majority should carry the vote. Setting supermajority requirements may
make it difficult or impossible for shareholders to remove egregious by-law or
charter provisions. Occasionally, a company with a significant insider held
position might attempt to lower a supermajority threshold to make it easier for
management to approve provisions that may be detrimental to shareholders. In
that case, it may not be in the shareholders interests to lower the
supermajority provision.

D.       Shareholder Right to Vote

AM policy is to vote "against" proposals that restrict the right of shareholders
to call special meetings, amend the bylaws, or act by written consent. Policy is
to vote "for" proposals that remove such restrictions.

Rationale: Any reasonable means whereby shareholders can make their views known
to management or effect the governance process should be supported.


IV.      Compensation

Annual Incentive Plans or Bonus Plans are often submitted to shareholders for
approval. These plans typically award cash to executives based on company
performance. Deutsche Bank believes that the responsibility for executive
compensation decisions rest with the board of directors and/or the compensation
committee, and its policy is not to second-guess the board's award of cash
compensation amounts to executives unless a particular award or series of awards
is deemed excessive. If stock options are awarded as part of these bonus or
incentive plans, the provisions must meet Deutsche Bank's criteria regarding
stock option plans, or similar stock-based incentive compensation schemes, as
set forth below.

A.       Establishment of a Remuneration Committee (For FFT Securities)

AM policy is to vote "for" proposals that require the establishment of a
remuneration committee.

Rationale: Corporations should disclose in each annual report or proxy statement
their policies on remuneration. Essential details regarding executive
remuneration including share options, long-term incentive plans and bonuses,
should be disclosed in the annual report, so that investors can judge whether
corporate pay policies and practices meet the standard.

The remuneration committee shall not comprise any board members and should be
sensitive to the wider scene on executive pay. It should ensure that
performance-based elements of executive pay are designed to align the interests
of shareholders.

B.       Executive and Director Stock Option Plans

AM policy is to vote "for" stock option plans that meet the following criteria:

(1)      The resulting dilution of existing shares is less than (a) 15 percent
         of outstanding shares for large capital corporations or (b) 20 percent
         of outstanding shares for small-mid capital companies (companies having
         a market capitalization under one billion U.S. dollars.)

(2)      The transfer of equity resulting from granting options at less than FMV
         is no greater than 3% of the over-all market capitalization of large
         capital corporations, or 5% of market cap for small-mid capital
         companies.

(3)      The plan does not contain express repricing provisions and, in the
         absence of an express statement that options will not be repriced; the
         company does not have a history of repricing options.

(4)      The plan does not grant options on super-voting stock.

AM will support performance-based option proposals as long as a) they do not
mandate that all options granted by the company must be performance based, and
b) only certain high-level executives are subject to receive the performance
based options.

AM will support proposals to eliminate the payment of outside director pensions.

Rationale: Determining the cost to the company and to shareholders of
stock-based incentive plans raises significant issues not encountered with
cash-based compensation plans. These include the potential dilution of existing
shareholders' voting power, the transfer of equity out of the company resulting
from the grant and execution of options at less than FMV and the authority to
reprice or replace underwater options. Our stock option plan analysis model
seeks to allow reasonable levels of flexibility for a company yet still protect
shareholders from the negative impact of excessive stock compensation.
Acknowledging that small mid-capital corporations often rely more heavily on
stock option plans as their main source of executive compensation and may not be
able to compete with their large capital competitors with cash compensation, we
provide slightly more flexibility for those companies.

C.       Employee Stock Option/Purchase Plans

AM policy is to vote for employee stock purchase plans (ESPP's) when the plan
complies with Internal Revenue Code 423, allowing non-management employees to
purchase stock at 85% of FMV.

AM policy is to vote "for" employee stock option plans (ESOPs) provided they
meet the standards for stock option plans in general. However, when computing
dilution and transfer of equity, ESOPs are considered independently from
executive and director option plans.

Rationale: ESOPs and ESPP's encourage rank-and-file employees to acquire an
ownership stake in the companies they work for and have been shown to promote
employee loyalty and improve productivity.

D.       Golden Parachutes

AM policy is to vote "for" proposals to require shareholder approval of golden
parachutes and for proposals that would limit golden parachutes to no more than
three times base compensation. Policy is to vote "against" more restrictive
shareholder proposals to limit golden parachutes.

Rationale: In setting a reasonable limitation, AM considers that an effective
parachute should be less attractive than continued employment and that the IRS
has opined that amounts greater than three times annual salary, are excessive.

E.       Proposals to Limit Benefits or Executive Compensation

AM policy is to vote "against"

1.   Proposals to limit benefits, pensions or compensation and

2.   Proposals that request or require disclosure of executive compensation
     greater than the disclosure required by Securities and Exchange Commission
     (SEC) regulations.

Rationale: Levels of compensation and benefits are generally considered to be
day-to-day operations of the company, and are best left unrestricted by
arbitrary limitations proposed by shareholders.

F.       Option Expensing

AM policy is to support proposals requesting companies to expense stock options.

Rationale: Although companies can choose to expense options voluntarily, the
Financial Accounting Standards Board (FASB) does not yet require it, instead
allowing companies to disclose the theoretical value of options as a footnote.
Because the expensing of stock options lowers earnings, most companies elect not
to do so. Given the fact that options have become an integral component of
compensation and their exercise results in a transfer of shareholder value, AM
agrees that their value should not be ignored and treated as "no cost"
compensation. The expensing of stock options would promote more modest and
appropriate use of stock options in executive compensation plans and present a
more accurate picture of company operational earnings.

G.        Management board election and motion (For FFT Securities)

AM policy is to vote "against":

o        the election of board members with positions on either remuneration or
         audit committees;

o        the election of supervisory board members with too many supervisory
         board mandates;

o        "automatic" election of former board members into the supervisory
         board.

Rationale: Management as an entity, and each of its members, are responsible for
all actions of the company, and are - subject to applicable laws and regulations
- accountable to the shareholders as a whole for their actions.

Sufficient information should be disclosed in the annual company report and
account to allow shareholders to judge the success of the company.

H.       Remuneration (variable pay): (For FFT Securities)

Executive remuneration for Management Board

AM policy is to vote "for" remuneration for Management Board that is transparent
and linked to results.

Rationale: Executive compensation should motivate management and align the
interests of management with the shareholders. The focus should be on criteria
that prevent excessive remuneration; but enable the company to hire and retain
first-class professionals.

Shareholder interests are normally best served when management is remunerated to
optimise long-term returns. Criteria should include suitable measurements like
return on capital employed or economic value added.

Interests should generally also be correctly aligned when management own shares
in the company - even more so if these shares represent a substantial portion of
their own wealth.

Its disclosure shall differentiate between fixed pay, variable (performance
related) pay and long-term incentives, including stock option plans with
valuation ranges as well as pension and any other significant arrangements.

Executive remuneration for Supervisory Board

AM policy is to vote "for" remuneration for Supervisory Board that is at least
50% in fixed form.

Rationale: It would normally be preferable if performance linked compensation
were not based on dividend payments, but linked to suitable result based
parameters. Consulting and procurement services should also be published in the
company report.

I.       Long-term incentive plans (For FFT Securities)

AM policy is to vote "for" long-term incentive plans for members of a management
board that reward for above average company performance.

Rationale: Incentive plans will normally be supported if they:

o        directly align the interests of members of management boards with those
         of shareholders;

o        establish challenging performance criteria to reward only above average
         performance;

o        measure performance by total shareholder return in relation to the
         market or a range of comparable companies;

o        are long-term in nature and encourage long-term ownership of the shares
         once exercised through minimum holding periods;

o        do not allow a repricing of the exercise price in stock option plans.

J.       Shareholder Proposals Concerning "Pay for Superior Performance"

AM policy is to address pay for superior performance proposals on a case-by-case
basis, incorporating the recommendation of an independent third party proxy
research firm (currently ISS) subject to review by the GPVSC as set forth in
AM's Proxy Policies and Procedures.

Rationale: While AM agrees that compensation issues are better left to the
discretion of management, they appreciate the need to monitor for excessive
compensation practices on a case by case basis. If, after a review of the ISS
metrics, AM is comfortable with ISS's applying this calculation and will vote
according to their recommendation.

K.       Executive Compensation Advisory

AM policy is to follow management's recommended vote on shareholder proposals to
propose an advisory resolution seeking to ratify the compensation of the
company's named executive officers (NEOs) on an annual basis.

Rationale: AM believes that controls exist within senior management and
corporate compensation committees, ensuring fair compensation to executives.
This might allow shareholders to require approval for all levels of management's
compensation.

V.       Anti-Takeover Related Issues

A.       Shareholder Rights Plans ("Poison Pills")

AM policy is to vote "for" proposals to require shareholder ratification of
poison pills or that request boards to redeem poison pills, and to vote
"against" the adoption of poison pills if they are submitted for shareholder
ratification.

Rationale: Poison pills are the most prevalent form of corporate takeover
defenses and can be (and usually are) adopted without shareholder review or
consent. The potential cost of poison pills to shareholders during an attempted
takeover outweighs the benefits.

B.       Reincorporation

AM policy is to examine reincorporation proposals on a case-by-case basis. The
voting decision is based on: (1) differences in state law between the existing
state of incorporation and the proposed state of incorporation; and (2)
differences between the existing and the proposed charter/bylaws/articles of
incorporation and their effect on shareholder rights. If changes resulting from
the proposed reincorporation violate the corporate governance principles set
forth in these guidelines, the reincorporation will be deemed contrary to
shareholder's interests and a vote cast "against."

Rationale: Reincorporations can be properly analyzed only by looking at the
advantages and disadvantages to their shareholders. Care must be taken that
anti-takeover protection is not the sole or primary result of a proposed change.

C.       Fair-Price Proposals

AM policy is to vote "for" management fair-price proposals, provided that: (1)
the proposal applies only to two-tier offers; (2) the proposal sets an objective
fair-price test based on the highest price that the acquirer has paid for a
company's shares; (3) the supermajority requirement for bids that fail the
fair-price test is no higher than two-thirds of the outstanding shares; (4) the
proposal contains no other anti-takeover provisions or provisions that restrict
shareholders rights.

A vote is cast for shareholder proposals that would modify or repeal existing
fair-price requirements that do not meet these standards.

Rationale: While fair price provisions may be used as anti-takeover devices, if
adequate provisions are included, they provide some protection to shareholders
who have some say in their application and the ability to reject those
protections if desired.

D.       Exemption from state takeover laws

AM policy is to vote "for" shareholder proposals to opt out of state takeover
laws and to vote "against" management proposals requesting to opt out of state
takeover laws.

Rationale: Control share statutes, enacted at the state level, may harm
long-term share value by entrenching management. They also unfairly deny certain
shares their inherent voting rights.

E.       Non-financial Effects of Takeover Bids

Policy is to vote "against" shareholder proposals to require consideration of
non-financial effects of merger or acquisition proposals.

Rationale: Non-financial effects may often be subjective and are secondary to
AM's stated purpose of acting in its client's best economic interest.


VI.      Mergers & Acquisitions

Evaluation of mergers, acquisitions and other special corporate transactions
(i.e., takeovers, spin-offs, sales of assets, reorganizations, restructurings
and recapitalizations) are performed on a case-by-case basis incorporating
information from an independent proxy research source (currently ISS.)
Additional resources including portfolio management and research analysts may be
considered as set forth in AM's Policies and Procedures.


VII.     Social, Environmental & Political Issues

Social and environmental issues are becoming increasingly important to corporate
success. We incorporate social and environmental considerations into both our
investment decisions and our proxy voting decisions - particularly if the
financial performance of the company could be impacted.

With increasing frequency, shareholder proposals are submitted relating to
social and political responsibility issues. Almost universally, the company
management will recommend a vote "against" these proposals. These types of
proposals cover an extremely wide range of issues. Many of the issues tend to be
controversial and are subject to more than one reasonable, yet opposing, theory
of support. More so than with other types of proxy proposals, social and
political responsibility issues may not have a connection to the economic and
corporate governance principles effecting shareholders' interests. AM's policy
regarding social and political responsibility issues, as with any other issue,
is designed to protect our client shareholders' economic interests.

Occasionally, a distinction is made between a shareholder proposal requesting
direct action on behalf of the board and a request for a report on (or
disclosure of) some information. In order to avoid unduly burdening any company
with reporting requirements, AM's policy is to vote against shareholder
proposals that demand additional disclosure or reporting than is required by the
Securities and Exchange Commission unless it appears there is a legitimate issue
and the company has not adequately addressed shareholders' concerns.

A.       Labor & Human Rights

AM policy is to vote "against" adopting global codes of conduct or workplace
standards exceeding those mandated by law.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies

B.       Diversity & Equality

1.       AM policy is to vote "against" shareholder proposals to force equal
         employment opportunity, affirmative action or board diversity.

Rationale: Compliance with State and Federal legislation along with information
made available through filings with the EEOC provides sufficient assurance that
companies act responsibly and make information public.

2.       AM policy is also to vote "against" proposals to adopt the Mac Bride
         Principles. The Mac Bride Principles promote fair employment,
         specifically regarding religious discrimination.

Rationale: Compliance with the Fair Employment Act of 1989 makes adoption of the
Mac Bride Principles redundant. Their adoption could potentially lead to charges
of reverse discrimination.

C.       Health & Safety

1.       AM policy is to vote "against" adopting a pharmaceutical price
         restraint policy or reporting pricing policy changes.

Rationale: Pricing is an integral part of business for pharmaceutical companies
and should not be dictated by shareholders (particularly pursuant to an
arbitrary formula.) Disclosing pricing policies may also jeopardize a company's
competitive position in the marketplace.

2.       AM policy is to vote "against" shareholder proposals to control the use
         or labeling of and reporting on genetically engineered products.

Rationale: Additional requirements beyond those mandated by law are deemed
unnecessary and potentially burdensome to companies.

D.       Government/Military

1.       AM policy is to vote against shareholder proposals regarding the
         production or sale of military arms or nuclear or space-based weapons,
         including proposals seeking to dictate a company's interaction with a
         particular foreign country or agency.

Rationale: Generally, management is in a better position to determine what
products or industries a company can and should participate in. Regulation of
the production or distribution of military supplies is, or should be, a matter
of government policy.

2.       AM policy is to vote "against" shareholder proposals regarding
         political contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

3.       AM policy is to vote "against" shareholder proposals regarding
         charitable contributions and donations.

Rationale: The Board of Directors and Management, not shareholders, should
evaluate and determine the recipients of any contributions made by the company.

E.       Tobacco

1.       AM policy is to vote "against" shareholder proposals requesting
         additional standards or reporting requirements for tobacco companies as
         well as "against" requesting companies to report on the intentional
         manipulation of nicotine content.

Rationale: Where a tobacco company's actions meet the requirements of legal and
industry standards, imposing additional burdens may detrimentally effect a
company's ability to compete. The disclosure of nicotine content information
could affect the company's rights in any pending or future litigation.

2.       Shareholder requests to spin-off or restructure tobacco businesses will
         be opposed.

Rationale: These decisions are more appropriately left to the Board and
management, and not to shareholder mandate.


VIII.    Environmental Issues

AM policy is to follow management's recommended vote on CERES Principles or
other similar environmental mandates (e.g., those relating to Greenhouse gas
emissions or the use of nuclear power).

Rationale: Environmental issues are extensively regulated by outside agencies
and compliance with additional requirements often involves significant cost to
companies.


IX.      Miscellaneous Items

A.       Ratification of Auditors

AM policy is to vote "for" a) the management recommended selection of auditors
and b) proposals to require shareholder approval of auditors.

Rationale: Absent evidence that auditors have not performed their duties
adequately, support for management's nomination is warranted.

B.       Limitation of non-audit services provided by independent auditor

AM policy is to support proposals limiting non-audit fees to 50% of the
aggregate annual fees earned by the firm retained as a company's independent
auditor.

Rationale: In the wake of financial reporting problems and alleged audit
failures at a number of companies, AM supports the general principle that
companies should retain separate firms for audit and consulting services to
avoid potential conflicts of interest. However, given the protections afforded
by the recently enacted Sarbanes-Oxley Act of 2002 (which requires Audit
Committee pre-approval for non-audit services and prohibits auditors from
providing specific types of services), and the fact that some non-audit services
are legitimate audit-related services, complete separation of audit and
consulting fees may not be warranted. A reasonable limitation is appropriate to
help ensure auditor independence and it is reasonable to expect that audit fees
exceed non-audit fees.

C.       Audit firm rotation

AM policy is to support proposals seeking audit firm rotation unless the
rotation period sought is less than five years.

Rationale: While the Sarbanes-Oxley Act mandates that the lead audit partner be
switched every five years, AM believes that rotation of the actual audit firm
would provide an even stronger system of checks and balances on the audit
function.

D.       Transaction of Other Business

AM policy is to vote against "transaction of other business" proposals.

Rationale: This is a routine item to allow shareholders to raise other issues
and discuss them at the meeting. As the nature of these issues may not be
disclosed prior to the meeting, we recommend a vote against these proposals.
This protects shareholders voting by proxy (and not physically present at a
meeting) from having action taken at the meeting that they did not receive
proper notification of or sufficient opportunity to consider.

E.       Motions to Adjourn the Meeting

AM Policy is to vote against proposals to adjourn the meeting.

Rationale: Management may seek authority to adjourn the meeting if a favorable
outcome is not secured. Shareholders should already have had enough information
to make a decision. Once votes have been cast, there is no justification for
management to continue spending time and money to press shareholders for
support.

F.       Bundled Proposals

AM policy is to vote against bundled proposals if any bundled issue would
require a vote against it if proposed individually.

Rationale: Shareholders should not be forced to "take the good with the bad" in
cases where the proposals could reasonably have been submitted separately.

G.       Change of Company Name

AM policy is to support management on proposals to change the company name.

Rationale: This is generally considered a business decision for a company.

H.       Proposals Related to the Annual Meeting

AM Policy is to vote in favor of management for proposals related to the conduct
of the annual meeting (meeting time, place, etc.)

Rationale: These are considered routine administrative proposals.

I.       Reimbursement of Expenses Incurred from Candidate Nomination

AM policy is to follow management's recommended vote on shareholder proposals
related to the amending of company bylaws to provide for the reimbursement of
reasonable expenses incurred in connection with nominating one or more
candidates in a contested election of directors to the corporation's board of
directors.

Rationale: Corporations should not be liable for costs associated with
shareholder proposals for directors.

J.       Investment Company Proxies

Proxies solicited by investment companies are voted in accordance with the
recommendations of an independent third party, currently ISS. However, regarding
investment companies for which AM or an affiliate serves as investment adviser
or principal underwriter, such proxies are voted in the same proportion as the
vote of all other shareholders. Proxies solicited by master funds from feeder
funds will be voted in accordance with applicable provisions of Section 12 of
the Investment Company Act of 1940.

Investment companies, particularly closed-end investment companies, are
different from traditional operating companies. These differences may call for
differences in voting positions on the same matter. For example, AM could vote
"for" staggered boards of closed-end investment companies, although AM generally
votes "against" staggered boards for operating companies. Further, the manner in
which AM votes investment company proxies may differ from proposals for which a
AM-advised investment company solicits proxies from its shareholders. As
reflected in the Guidelines, proxies solicited by closed-end (and open-end)
investment companies are voted in accordance with the pre-determined guidelines
of an independent third-party.

Subject to participation agreements with certain Exchange Traded Funds ("ETF")
issuers that have received exemptive orders from the U.S. Securities and
Exchange Commission allowing investing DWS funds to exceed the limits set forth
in Section 12(d)(1)(A) and (B) of the Investment Company Act of 1940, DeAM will
echo vote proxies for ETFs in which Deutsche Bank holds more than 25% of
outstanding voting shares globally when required to do so by participation
agreements and SEC orders.

Note: With respect to the QP Trust (not registered under the Investment Company
Act of 1940), the Fund is not required to engage in echo voting and the
investment adviser will use these Guidelines, and may determine, with respect to
the QP Trust, to vote contrary to the positions in the Guidelines, consistent
with the Fund's best interest.


K.       International Proxy Voting

The above guidelines pertain to issuers organized in the United States, Canada
and Germany. Proxies solicited by other issuers are voted in accordance with
international guidelines or the recommendation of ISS and in accordance with
applicable law and regulation.







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IMPORTANT: The information contained herein is the property of Deutsche Bank
Group and may not be copied, used or disclosed in whole or in part, stored in a
retrieval system or transmitted in any form or by any means (electronic,
mechanical, reprographic, recording or otherwise) without the prior written
permission of Deutsche Bank Group.
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                      APPENDIX B -- RATINGS OF INVESTMENTS

BOND AND COMMERCIAL PAPER RATINGS

Set forth below are descriptions of ratings which represent opinions as to the
quality of the securities. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.

MOODY'S INVESTORS SERVICE, INC. -- CORPORATE BOND RATINGS

Aaa: Bonds which are rated Aaa are judged to be of the highest quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper--medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa: Bonds which are rated Baa are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safe-guarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B are considered speculative and generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are highly speculative.
Such issues are often in default or have other marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds, typically are in
default and can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Note: Moody's appends numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through Caa in its corporate bond rating system. The
modifier 1 indicates that the issue ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

MOODY'S INVESTORS SERVICE, INC. -- SHORT-TERM RATINGS

Moody's short-term debt ratings are opinions of the ability of issuers to honor
short-term financial obligations. Ratings may be assigned to issuers, short-term
programs or to individual short-term debt instruments. Such obligations
generally have an original maturity not exceeding thirteen months, unless
explicitly noted. Issuers rated Prime-1 or P-1 (or supporting institutions) have
a superior ability for repayment of short-term debt obligations. Prime-1 or P-1
repayment ability will often be evidenced by many of the following
characteristics:

Leading  market positions in well established industries.

High rates of return on funds employed.

Conservative capitalization structure with moderate reliance on debt and ample
asset protection.

Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.

Well established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated Prime-2 or P-2 (or supporting institutions) have a strong ability
for repayment of short-term debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

STANDARD & POOR'S RATINGS SERVICES -- CORPORATE BOND RATINGS

INVESTMENT GRADE

AAA: Debt rated AAA has the highest rating assigned by S&P's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA: Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.

BBB: Debt rated BBB has an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.

SPECULATIVE GRADE

Debt rated BB, B, CCC, CC, and C has significant speculative characteristics
with respect to capacity to pay interest and repay principal. BB indicates the
least degree of speculation and C the highest. While such debt will likely have
some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.

The BB rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.

B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.

The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.

CCC: Debt rated CCC has a current vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.

The CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.

CC: Debt rated CC has a current high vulnerability to default, and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal.

The rating CC is also applied to debt subordinated to senior debt which is
assigned an actual or implied CCC debt rating.

C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.

D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

R: Debt rated 'R' is under regulatory supervision owing to its financial
condition. During the pendency of the regulatory supervision, the regulators may
have the power to favor one class of obligations over others or pay some
obligations and not others.

N.R.: Bonds may lack a S&P's rating because no public rating has been requested,
because there is insufficient information on which to base a rating, or because
S&P's does not rate a particular type of obligation as a matter of policy.

STANDARD & POOR'S RATINGS SERVICES -- SHORT-TERM RATINGS

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market.

A-1: This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.

A-3: Issues carrying this designation have adequate capacity for timely payment.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the issuer to meet its financial commitments.

FITCH INVESTORS SERVICE, INC. -- BOND RATINGS

INVESTMENT GRADE

AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA: Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Bonds rated in the AAA and AA categories
are not significantly vulnerable to foreseeable events.

A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB: Bonds considered to be investment grade and of good credit quality. The
obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore, impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

SPECULATIVE GRADE

BB: Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business or financial alternatives may be available which could assist the
obligor in satisfying its debt service requirements.

B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC: Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C: Bonds are in imminent default in payment of interest or principal.

DDD, DD and D: Bonds are in default of interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. DDD
represents the highest potential for recovery on these bonds, and D represents
the lowest potential for recovery.

Plus (+) or Minus (-): The ratings from AA to CC may be appended by the addition
of a plus or minus sign to denote the relative status within the rating
category.

NR: Indicates that Fitch Rating does not publicly rate the specific issue.

FITCH INVESTORS SERVICE, INC. -- SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.

F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest capacity for timely payment.

F-1: Very Strong Credit Quality. Issues assigned this rating reflect a capacity
for timely payment only slightly less than issues rated F-1+.

F-2: Good Credit Quality. Issues assigned this rating have a satisfactory
capacity for timely payment, but the margin of safety is not as great as the
F-1+ and F-1 categories.

F-3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the capacity for timely payment is adequate; however, near-term
adverse changes could cause these securities to be rated below investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D: Default. Denotes actual or imminent payment default.

<PAGE>


                             DWS VARIABLE SERIES II

                                     PART C

                                OTHER INFORMATION

<TABLE>
<CAPTION>
   Item 23.       Exhibits
   --------       --------
                      <S>                   <C>
                   (a)(1)                   Amended and Restated Agreement and Declaration of Trust, dated April 24,
                                            1998. (Incorporated by reference to Post-Effective Amendment No. 22 to the
                                            Registration Statement, filed April 28, 1998.)

                   (a)(2)                   Certificate of Amendment of Declaration of Trust, dated March 31, 1999.
                                            (Incorporated by reference to Post-Effective Amendment No. 24 to the
                                            Registration Statement, filed on April 29, 1999.)

                   (a)(3)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated March 31, 1999.  (Incorporated by reference to
                                            Post-Effective Amendment No. 27 to the Registration Statement, filed on
                                            September 1, 1999.)

                   (a)(4)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated July 14, 1999.  (Incorporated by reference to
                                            Post-Effective Amendment No. 27 to the Registration Statement, filed on
                                            September 1, 1999.)

                   (a)(5)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated September 29, 1999.  (Incorporated by reference to
                                            Post-Effective Amendment No. 29 to the Registration Statement, filed on
                                            October 29, 1999.)

                   (a)(6)                   Redesignation of Series dated May 1, 2000.  (Incorporated by reference to
                                            Post-Effective Amendment No. 32 to the Registration Statement, filed on
                                            May 1, 2000.)

                   (a)(7)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated January 24, 2001. (Incorporated by reference to
                                            Post-Effective Amendment No. 33 to the Registration Statement, filed on
                                            February 15, 2001.)

                   (a)(8)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated March 28, 2001. (Incorporated by reference to
                                            Post-Effective Amendment No. 36 to the Registration Statement, filed on May
                                            1, 2002.)

                   (a)(9)                   Redesignation of Series dated November 29, 2000. (Incorporated by reference
                                            to Post-Effective Amendment No. 33 to the Registration Statement, filed on
                                            February 15, 2001.)

                  (a)(10)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated March 20, 2002. (Incorporated by reference to
                                            Post-Effective Amendment No. 36 to the Registration Statement, filed on May
                                            1, 2002.)


                                       3
<PAGE>

                  (a)(11)                   Certificate of Amendment of Declaration of Trust, dated November 29, 2000.
                                            (Incorporated by reference to Post-Effective Amendment No. 33 to the
                                            Registration Statement, filed on February 15, 2001.)

                  (a)(12)                   Redesignation of Series for SVS Dreman Small Cap Value Portfolio, dated
                                            January 15, 2002.  (Incorporated by reference to Post-Effective Amendment
                                            No. 35 to the Registration statement, filed on February 13, 2002.)

                  (a)(13)                   Establishment and Designation of Class of Shares of Beneficial Interest
                                            dated November 28, 2001.  (Incorporated by reference to Post-Effective
                                            Amendment No. 36 to the Registration Statement, filed on May 1, 2002.)

                  (a)(14)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest, dated January 15, 2003. (Incorporated by reference to
                                            Post-Effective Amendment No. 38 to the Registration Statement, filed on
                                            February 28, 2003.)

                  (a)(15)                   Establishment and Designation of Classes of Shares of Beneficial Interest,
                                            No Par Value Going Forth, dated January 15, 2003.  (Incorporated by
                                            reference to Post-Effective Amendment No. 38 to the Registration Statement,
                                            filed on February 28, 2003.)

                  (a)(16)                   Redesignation of Series of Shares of Beneficial Interest as Scudder High
                                            Income Portfolio, dated September 2002. (Incorporated by reference to
                                            Post-Effective Amendment No. 39 to the Registration Statement, filed on
                                            April 30, 2003.)

                  (a)(17)                   Establishment and Designation of Classes of Shares of Beneficial Interest,
                                            as Scudder Strategic Income Portfolio, dated January 15, 2003. (Incorporated
                                            by reference to Post-Effective Amendment No. 39 to the Registration
                                            Statement, filed on April 30, 2003.)

                  (a)(18)                   Amended and Restated Establishment and Designation of Classes of Series of
                                            Shares of Beneficial Interest dated March 17, 2004. (Incorporated by
                                            reference to Post-Effective Amendment No. 45 to the Registration Statement,
                                            filed on April 1, 2004.)

                  (a)(19)                   Redesignation of Series as Scudder Government & Agency Securities Portfolio,
                                            dated March 17, 2004. (Incorporated by reference to Post-Effective Amendment
                                            No. 54 to the Registration Statement.)

                  (a)(20)                   Amended and Restated Establishment and Designation of Series of Shares of
                                            Beneficial Interest dated November 12, 2004. (Incorporated by reference to
                                            Post-Effective Amendment No. 56 to the Registration Statement.)

                  (a)(21)                   Redesignation of Series, dated July 20, 2005. (Incorporated by reference to
                                            Post-Effective Amendment No. 58 to the Registration Statement.)

                  (a)(22)                   Redesignation of Series of each portfolio of Scudder Variable Series II,
                                            dated December 30, 2005. (Incorporated by reference to Post-Effective
                                            Amendment No. 59 to the Registration Statement.)

                  (a)(23)                   Certificate of Amendment to Declaration of Trust, dated November 16, 2005.
                                            (Incorporated by reference to Post-Effective Amendment No. 59 to the
                                            Registration Statement.)

                                       4
<PAGE>

                  (a)(24)                   Redesignation of Series, dated October 1, 2006.  (Incorporated by reference
                                            to Post-Effective Amendment No. 61 to the Registration Statement, filed
                                            April 27, 2007.)

                  (a)(25)                   Redesignation of Series, dated October 31, 2006.  (Incorporated by reference
                                            to Post-Effective Amendment No. 61 to the Registration Statement, filed
                                            April 27, 2007.)

                  (a)(26)                   Redesignation of Series, dated October 31, 2006.  (Incorporated by reference
                                            to Post-Effective Amendment No. 61 to the Registration Statement, filed
                                            April 27, 2007.)

                  (a)(27)                   Amended and Restated Establishment and Designation of Series and Classes of
                                            Shares of Beneficial Interest, dated June 2, 2008. (Incorporated by
                                            reference to Post-Effective Amendment No. 67 to the Registration Statement,
                                            filed December 5, 2008.)

                   (b)(1)                   By-laws.  (Incorporated by reference to Post-Effective Amendment No. 14 to
                                            the Registration Statement, filed on April 27, 1995.)

                   (b)(2)                   Amended By-laws dated November 30, 2000.  (Incorporated by reference to
                                            Post-Effective Amendment No. 36 to the Registration Statement, filed on
                                            May 1, 2002.)

                   (b)(3)                   Amendment to By-laws, dated November 16, 2005. (Incorporated by reference to
                                            Post-Effective Amendment No. 61 to the Registration Statement, filed April
                                            27, 2007.)

                    (c)                     Text of Share Certificate.  (Incorporated by reference to Post-Effective
                                            Amendment No. 14 to the Registration Statement, filed on April 27, 1995.)

                   (d)(1)                   Amended and Restated Investment Management Agreement between the Registrant,
                                            on behalf of  DWS Balanced VIP, DWS Blue Chip VIP, DWS Conservative
                                            Allocation VIP, DWS Core Fixed Income VIP, DWS Davis Venture Value VIP, DWS
                                            Dreman High Return Equity VIP, DWS Dreman Small Mid Cap Value VIP, DWS
                                            Global Thematic VIP, DWS Government & Agency VIP, DWS Growth Allocation VIP,
                                            DWS High Income VIP, DWS International Select Equity VIP, DWS Janus Growth &
                                            Income VIP, DWS Mid Cap Growth VIP, DWS Moderate Allocation VIP, DWS Money
                                            Market VIP, DWS Small Cap Growth VIP, DWS Strategic Income VIP, DWS
                                            Technology VIP, DWS Turner Mid Cap Growth VIP, and Deutsche Investment
                                            Management Americas Inc., dated May 1, 2008. (Incorporated by reference to
                                            Post-Effective Amendment No. 64 to the Registration Statement, filed on
                                            August 8, 2008.)

                   (d)(2)                   Subadvisory Agreement between Deutsche Investment Management Americas, Inc.
                                            and Dreman Value Management, L.L.C. dated April 5, 2002, for DWS Dreman High
                                            Return Equity VIP. (Incorporated by reference to Post-Effective Amendment
                                            No. 39 to the Registration Statement, filed on April 30, 2003.)


                                       5
<PAGE>

                   (d)(3)                   Subadvisory Agreement between Deutsche Investment Management Americas Inc.
                                            and Dreman Value Management, L.L.C., dated April 5, 2002, for DWS Dreman
                                            Small Cap Value VIP.  (Incorporated by reference to Post-Effective Amendment
                                            No. 38 to the Registration Statement, filed on February 28, 2003.)

                   (d)(4)                   Subadvisory Agreement between Deutsche Investment Management Americas Inc.
                                            and Janus Capital Management L.L.C., dated April 5, 2002, for DWS Janus
                                            Growth and Income VIP.  (Incorporated by reference to Post-Effective
                                            Amendment No. 38 to the Registration Statement, filed on February 28, 2003.)

                   (d)(5)                   Subadvisory Agreement between Deutsche Investment Management Americas Inc.
                                            and Turner Investment Partners, Inc., dated April 5, 2002, for DWS Turner
                                            Mid Cap Growth VIP.  (Incorporated by reference to Post-Effective Amendment
                                            No. 38 to the Registration Statement, filed on February 28, 2003.)

                   (d)(6)                   Sub-Advisory Agreement between Deutsche Investment Management Americas Inc.
                                            and Deutsche Asset Management International GmbH dated April 11, 2007 (DWS
                                            Large Cap Value VIP).  (Incorporated by reference to Post-Effective
                                            Amendment No. 63 to the Registration Statement, filed on May 1; 2008.)

                   (d)(7)                   Sub-Advisory Agreement between Deutsche Investment Management Americas Inc.
                                            and Deutsche Asset Management International GmbH dated April 1, 2008 (DWS
                                            Balanced VIP). (Incorporated by reference to Post-Effective Amendment No. 64
                                            to the Registration Statement, filed on August 8, 2008.)

                   (d)(8)                   Investment Management Agreement between the Registrant, on behalf of DWS
                                            Large Cap Value VIP, dated April 11, 2007.  (Incorporated by reference to
                                            Post-Effective Amendment No. 63 to the Registration Statement, filed on
                                            May 1; 2008.)

                   (e)(1)                   Underwriting and Distribution Services Agreement between Scudder Variable
                                            Series II and Scudder Distributors, Inc., dated April 5, 2002.
                                            (Incorporated by reference to Post-Effective Amendment No. 38 to the
                                            Registration Statement, filed on February 28, 2003.)

                   (g)(1)                   Form of an Amended and Restated Master Custodian Agreement, dated October
                                            17, 2008, between the Registrant and Brown Brothers Harriman & Co.
                                            (Incorporated by reference to Post-Effective Amendment No. 67 to the
                                            Registration Statement, filed December 5, 2008.)

                   (g)(2)                   Master Custodian Agreement, dated March 22, 2007, between the Registrant and
                                            State Street Bank and Trust Company.  (Incorporated by reference to
                                            Post-Effective Amendment No. 63 to the Registration Statement, filed on
                                            May 1; 2008.)

                   (h)(1)                   Agency Agreement between Scudder Variable Series II and Scudder Investments
                                            Service Company, dated July 1, 2001.  (Incorporated by reference to
                                            Post-Effective Amendment No. 35 to the Registration statement, filed on
                                            February 13, 2002.)


                                       6
<PAGE>

                   (h)(2)                   Supplement to Agency Agreement.  (Incorporated by reference to
                                            Post-Effective Amendment No. 24 to the Registration Statement, filed on
                                            April 29, 1999.)

                   (h)(3)                   Second Amendment to the Agency Agreement, dated March 13, 2006.
                                            (Incorporated by reference to Post-Effective Amendment No. 61 to the
                                            Registration Statement, filed April 27, 2007.)

                   (h)(4)                   Amended and Restated Administrative Services Agreement, dated October 1,
                                            2008, between the Registrant and Deutsche Investment Management Americas
                                            Inc., is filed herein.

                   (h)(5)                   Letters of Indemnity to the Scudder Funds dated September 10, 2004; and
                                            Letter of Indemnity to the Independent Directors/Trustees dated September
                                            10, 2004. (Incorporated by reference to Post-Effective Amendment No. 56 to
                                            the Registration Statement, filed on February 25, 2005.)

                   (h)(6)                   Form of Mutual Fund Rule 22c-2 Information Sharing Agreement between DWS
                                            Scudder Distributors, Inc. and certain financial intermediaries is filed
                                            herein.

                   (h)(7)                   Form of Expense Limitation Agreement between the Registrant on behalf of DWS
                                            Conservative Allocation VIP, DWS Core Fixed Income VIP, DWS Davis Venture
                                            Value VIP, DWS Dreman High Return Equity VIP, DWS Global Thematic VIP, DWS
                                            Government & Agency VIP, DWS Growth Allocation VIP, DWS Mid Cap Growth VIP,
                                            DWS Moderate Allocation VIP, DWS Money Market VIP and DWS Strategic Income
                                            VIP, and Deutsche Investment Management Americas Inc. is filed herein.

                   (i)(1)                   Opinion and Consent of Legal Counsel, in regards to DWS Alternative Asset
                                            Allocation VIP, is filed herein.

                    (j)                     Inapplicable.

                    (k)                     Inapplicable.

                    (l)                     Inapplicable.

                   (m)(1)                   Master Distribution Plan for Class B Shares, as approved on November 28,
                                            2001. (Incorporated by reference to Post-Effective Amendment No. 39 to the
                                            Registration Statement, filed on April 30, 2003.)

                   (m)(2)                   Supplement to Master Distribution Plan for Class B Shares, as approved on
                                            January 15, 2003 for Scudder Strategic Income Portfolio.  (Incorporated by
                                            reference to Post-Effective Amendment No. 39 to the Registration Statement,
                                            filed on April 30, 2003.)

                   (n)(1)                   Plan Pursuant to Rule 18f-3 as approved on November 28, 2001. (Incorporated
                                            by reference to Post-Effective Amendment No. 39 to the Registration
                                            Statement, filed on April 30, 2003.)

                   (p)(1)                   Code of Ethics for Deutsche Asset Management - U.S., dated January 1, 2008.
                                            (Incorporated by reference to Post-Effective Amendment No. 62 to the
                                            Registration Statement, filed on February 15, 2008.)


                                       7
<PAGE>

                   (p)(2)                   Code of Ethics for Turner Investment Partners, Inc. dated July 10, 2003.
                                            (Incorporated by reference to Post-Effective Amendment No. 45 to the
                                            Registration Statement, filed on April 1, 2004.)

                   (p)(3)                   Code of Ethics for Dreman Value Management, L.L.C. (Incorporated by
                                            reference to Post-Effective Amendment No. 45 to the Registration Statement,
                                            filed on April 1, 2004.)

                   (p)(4)                   Janus Ethics Rules, as revised February 19, 2008, for Janus Capital Group.
                                            (Incorporated by reference to Post-Effective Amendment No. 63 to the
                                            Registration Statement, filed on May 1; 2008.)

                   (p)(5)                   Code of Ethics, dated December 1, 2005, for Aberdeen Asset Management Inc.
                                            (Incorporated by reference to Post-Effective Amendment No. 58 to the
                                            Registration Statement.)

                   (p)(6)                   Consolidated Code of Ethics (All Funds). (Incorporated by reference to
                                            Post-Effective Amendment No. 59 to the Registration Statement.)
</TABLE>

Item 24.          Persons Controlled by or under Common Control with Fund.
--------          --------------------------------------------------------

                  None

Item 25.          Indemnification
--------          ---------------

                  Article VIII of the Registrant's Agreement and Declaration of
                  Trust (Exhibit (a)(1) hereto, which is incorporated herein by
                  reference) provides in effect that the Registrant will
                  indemnify its officers and trustees under certain
                  circumstances. However, in accordance with Section 17(h) and
                  17(i) of the Investment Company Act of 1940 and its own terms,
                  said Article of the Agreement and Declaration of Trust does
                  not protect any person against any liability to the Registrant
                  or its shareholders to which such Trustee would otherwise be
                  subject by reason of willful misfeasance, bad faith, gross
                  negligence, or reckless disregard of the duties involved in
                  the conduct of his or her office.

                  Each of the trustees who is not an "interested person" (as
                  defined under the Investment Company Act of 1940) of
                  Registrant (a "Non-interested Trustee") has entered into an
                  indemnification agreement with Registrant, which agreement
                  provides that the Registrant shall indemnify the
                  Non-interested Trustee against certain liabilities which such
                  Trustee may incur while acting in the capacity as a trustee,
                  officer or employee of the Registrant to the fullest extent
                  permitted by law, now or in the future, and requires
                  indemnification and advancement of expenses unless prohibited
                  by law. The indemnification agreement cannot be altered
                  without the consent of the Non-interested Trustee and is not
                  affected by amendment of the Agreement and Declaration of
                  Trust. In addition, the indemnification agreement adopts
                  certain presumptions and procedures which may make the process
                  of indemnification and advancement of expenses, more timely,
                  efficient and certain. In accordance with Section 17(h) of the
                  Investment Company Act of 1940, the indemnification agreement
                  does not protect a Non-interested Trustee against any
                  liability to the Registrant or its shareholders to which such
                  Trustee would otherwise be subject by reason of willful
                  misfeasance, bad faith, gross negligence, or reckless
                  disregard of the duties involved in the conduct of his or her
                  office.

                  The Registrant has purchased insurance policies insuring its
                  officers and trustees against certain liabilities which such
                  officers and trustees may incur while acting in such
                  capacities and providing reimbursement to the Registrant for
                  sums which it may be permitted or required to pay to its
                  officers and trustees by way of indemnification against such
                  liabilities, subject to certain deductibles.

                  On April 5, 2002, Zurich Scudder Investments, Inc.
                  ("Scudder"), the investment adviser, now known as Deutsche
                  Investment Management Americas Inc., was acquired by Deutsche
                  Bank AG, not including


                                       8
<PAGE>

                  certain U.K. Operations (the "Transaction"). In connection
                  with the Trustees' evaluation of the Transaction, Deutsche
                  Bank agreed to indemnify, defend and hold harmless Registrant
                  and the trustees who were not "interested persons" of Scudder,
                  Deutsche Bank or Registrant (the "Independent Trustees") for
                  and against any liability and claims and expenses based upon
                  or arising from, whether in whole or in part, or directly or
                  indirectly, any untrue statement or alleged untrue statement
                  of a material fact made to the Independent Trustees by
                  Deutsche Bank in connection with the Independent Trustees'
                  consideration of the Transaction, or any omission or alleged
                  omission of a material fact necessary in order to make
                  statements made, in light of the circumstances under which
                  they were made, not misleading.

                  Deutsche Investment Management Americas Inc. ("DIMA"), the
                  investment advisor, has agreed, subject to applicable law and
                  regulation, to indemnify and hold harmless the Registrant
                  against any loss, damage, liability and expense, including,
                  without limitation, the advancement and payment, as incurred,
                  of reasonable fees and expenses of counsel (including counsel
                  to the Registrant and counsel to the Non-interested Trustees)
                  and consultants, whether retained by the Registrant or the
                  Non-interested Trustees, and other customary costs and
                  expenses incurred by the Registrant in connection with any
                  litigation or regulatory action related to possible improper
                  market timing or other improper trading activity or possible
                  improper marketing and sales activity in the Registrant
                  ("Private Litigation and Enforcement Actions"). In the event
                  that this indemnification is unavailable to the Registrant for
                  any reason, then DIMA has agreed to contribute to the amount
                  paid or payable by the Registrant as a result of any loss,
                  damage, liability or expense in such proportion as is
                  appropriate to reflect the relative fault of DIMA and the
                  Registrant with respect to the matters which resulted in such
                  loss, damage, liability or expense, as well as any other
                  relevant equitable considerations; provided, however, if no
                  final determination is made in such action or proceeding as to
                  the relative fault of DIMA and the Registrant, then DIMA shall
                  pay the entire amount of such loss, damage, liability or
                  expense.

                  In recognition of its undertaking to indemnify the Registrant,
                  DIMA has also agreed, subject to applicable law and
                  regulation, to indemnify and hold harmless each of the
                  Non-interested Trustees against any and all loss, damage,
                  liability and expense, including without limitation the
                  advancement and payment as incurred of reasonable fees and
                  expenses of counsel and consultants, and other customary costs
                  and expenses incurred by the Non-interested Trustees, arising
                  from the Private Litigation and Enforcement, including without
                  limitation:

                           1. all reasonable legal and other expenses incurred
                           by the Non-interested Trustees in connection with the
                           Private Litigation and Enforcement Actions, and any
                           actions that may be threatened or commenced in the
                           future by any person (including any governmental
                           authority), arising from or similar to the matters
                           alleged in the Private Litigation and Enforcement
                           Actions, including without limitation expenses
                           related to the defense of, service as a witness in,
                           or monitoring of such proceedings or actions;

                           2. all liabilities and expenses incurred by any
                           Non-interested Trustee in connection with any
                           judgment resulting from, or settlement of, any such
                           proceeding, action or matter;

                           3. any loss or expense incurred by any Non-interested
                           Trustee as a result of the denial of, or dispute
                           about, any insurance claim under, or actual or
                           purported rescission or termination of, any policy of
                           insurance arranged by DIMA (or by a representative of
                           DIMA acting as such, acting as a representative of
                           the Registrant or of the Non-interested Trustees or
                           acting otherwise) for the benefit of the
                           Non-interested Trustee, to the extent that such
                           denial, dispute or rescission is based in whole or in
                           part upon any alleged misrepresentation made in the
                           application for such policy or any other alleged
                           improper conduct on the part of DIMA, any of its
                           corporate affiliates, or any of their directors,
                           officers or employees;

                           4. any loss or expense incurred by any Non-interested
                           Trustee, whether or not such loss or expense is
                           otherwise covered under the terms of a policy of
                           insurance, but for which the Non-


                                       9
<PAGE>

                           interested Trustee is unable to obtain advancement of
                           expenses or indemnification under that policy of
                           insurance, due to the exhaustion of policy limits
                           which is due in whole or in part to DIMA or any
                           affiliate thereof having received advancement of
                           expenses or indemnification under that policy for or
                           with respect to a matter which is the subject of the
                           indemnification agreement; provided, however, the
                           total amount which DIMA will be obligated to pay
                           under this provision for all loss or expense, will
                           not exceed the amount that DIMA and any of its
                           affiliate actually receive under that policy or
                           insurance for or with respect to a matter which is
                           the subject of the indemnification agreement; and

                           5. all liabilities and expenses incurred by any
                           Non-interested Trustee in connection with any
                           proceeding or action to enforce his or her rights
                           under the agreement, unless DIMA prevails on the
                           merits of any such dispute in a final, nonappealable
                           court order.

                  DIMA is not required to pay costs or expenses or provide
                  indemnification to or for any individual Non-interested
                  Trustee (i) with respect to any particular proceeding or
                  action as to which the Board of the Registrant has determined
                  that such Non-interested Trustee ultimately will not be
                  entitled to indemnification with respect thereto, or (ii) for
                  any liability of the Non-interested Trustee to the Registrant
                  or its shareholders to which such Non-interested Trustee would
                  otherwise be subject by reason of willful misfeasance, bad
                  faith, gross negligence, or reckless disregard of the
                  Non-interested Trustee's duties as a Trustee of the Registrant
                  as determined in a final adjudication in such proceeding or
                  action. In addition, to the extent that DeAM has paid costs or
                  expenses under the agreement to any individual Non-interested
                  Trustee with respect to a particular proceeding or action, and
                  there is a final adjudication in such proceeding or action of
                  the Non-interested Trustee's liability to the Registrant or
                  its shareholders by reason of willful misfeasance, bad faith,
                  gross negligence, or reckless disregard of the Non-interested
                  Trustee's duties as a Trustee of the Registrant, such
                  Non-interested Trustee has undertaken to repay such costs or
                  expenses to DIMA.

Item 26.          Business and Other Connections of Investment Advisor
--------          ----------------------------------------------------

                  During the last two fiscal years, no director or officer of
                  Deutsche Investment Management Americas Inc., the investment
                  advisor, has engaged in any other business, profession,
                  vocation or employment of a substantial nature other than that
                  of the business of investment management and, through
                  affiliates, investment banking.

Item 27.          Principal Underwriters
--------          ----------------------

                  (a)

                  DWS Investments Distributors, Inc. acts as principal
                  underwriter of the Registrant's shares and acts as principal
                  underwriter for registered open-end management investment
                  companies other funds managed by Deutsche Investment
                  Management Americas Inc.



                                       10
<PAGE>

                  (b)

                  Information on the officers and directors of DWS Investments
                  Distributors, Inc., principal underwriter for the Registrant,
                  is set forth below. The principal business address is 222
                  South Riverside Plaza, Chicago, Illinois 60606.

<TABLE>
<CAPTION>
                      (1)                             (2)                                  (3)
          DWS Investments
          Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Investments Distributors, Inc.       Offices with Registrant
          ----------------               ----------------------------------       -----------------------
                <S>                                     <C>                               <C>
         Philipp Hensler                Director, Chairman of the Board and CEO   None
         345 Park Avenue
         New York, NY 10154

         Michael Colon                  Director and Chief Operating Officer      None
         345 Park Avenue
         New York, NY 10154

         Thomas Winnick                 Director and President                    None
         345 Park Avenue
         New York, NY 10154

         Cliff Goldstein                Chief Financial Officer and Treasurer     None
         60 Wall Street
         New York, NY 10005

         Robert Froehlich               Vice President                            None
         222 South Riverside Plaza
         Chicago, IL 60606

         Paul Schubert                  Vice President                            Chief Financial Officer
         345 Park Avenue                                                          and Treasurer
         New York, NY 10154

         Mark Perrelli                  Vice President                            None
         222 South Riverside Plaza
         Chicago, IL 60606

         Donna White                    Chief Compliance Officer                  None
         345 Park Avenue
         New York, NY 10154

         Jason Vazquez                  Vice President and AML Compliance         Anti-Money Laundering
         345 Park Avenue                Officer                                   Compliance Officer
         New York, NY 10154


                                       11
<PAGE>
                      (1)                             (2)                                  (3)
          DWS Investments
          Distributors, Inc.
          Name and Principal             Positions and Offices with               Positions and
          Business Address               DWS Investments Distributors, Inc.       Offices with Registrant
          ----------------               ----------------------------------       -----------------------

         Caroline Pearson               Secretary                                 Assistant Secretary
         Two International Place
         Boston, MA 02110

         Philip J. Collora              Assistant Secretary                       None
         222 South Riverside Plaza
         Chicago, IL 60606

         Anjie LaRocca                  Assistant Secretary                       None
         345 Park Avenue
         New York, NY 10154
</TABLE>

         (c)      Not applicable

Item 28.          Location of Accounts and Records.
--------          ---------------------------------

                  Accounts, books and other documents are maintained at the
                  offices of the Registrant, the offices of the Registrant's
                  investment advisor, Deutsche Investment Management Americas
                  Inc., 345 Park Avenue, New York, NY 10154; at the offices of
                  the Registrant's principal underwriter, DWS Investments
                  Distributors, Inc., 222 South Riverside Plaza, Chicago,
                  Illinois 60606; or, in the case of records concerning
                  custodial functions, at the offices of either of the
                  custodians: State Street Bank and Trust Company, 225 Franklin
                  Street, Boston, Massachusetts or Brown Brothers Harriman &
                  Co., 40 Water Street, Boston, Massachusetts; or, in the case
                  of records concerning transfer agency functions, at the
                  offices of State Street Bank and Trust Company and of the
                  shareholder service agent DWS Investments Services Company,
                  210 W. 10th Street, Kansas City, Missouri 64105.

Item 29.          Management Services.
--------          --------------------

                  Inapplicable.

Item 30.          Undertakings.
--------          -------------

                  Inapplicable.


                                       12
<PAGE>



                                   SIGNATURES
                                   ----------

         Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of New York and the State of New York on
the 16th day of January 2009.

                                                 DWS VARIABLE SERIES II

                                                  By:  /s/Michael G. Clark
                                                       -----------------------
                                                       Michael G. Clark*

         Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE                                  TITLE                                        DATE
---------                                  -----                                        ----
<S>                                               <C>                                     <C>
/s/Michael G. Clark
-------------------------------------
Michael G. Clark*                          President                                    January 16, 2009

/s/Paul H. Schubert
-------------------------------------
Paul H. Schubert                           Chief Financial Officer and Treasurer        January 16, 2009

/s/John W. Ballantine
-------------------------------------
John W. Ballantine*                        Trustee                                      January 16, 2009

/s/Henry P. Becton, Jr.
-------------------------------------
Henry P. Becton, Jr.*                      Trustee                                      January 16, 2009

/s/Dawn-Marie Driscoll
-------------------------------------
Dawn-Marie Driscoll*                       Chairperson and Trustee                      January 16, 2009

/s/Keith R. Fox
-------------------------------------
Keith R. Fox*                              Trustee                                      January 16, 2009

/s/Paul K. Freeman
-------------------------------------
Paul K. Freeman*                           Vice Chairperson and Trustee                 January 16, 2009

/s/Kenneth C. Froewiss
-------------------------------------
Kenneth C. Froewiss*                       Trustee                                      January 16, 2009

/s/Richard J. Herring
-------------------------------------
Richard J. Herring*                        Trustee                                      January 16, 2009

/s/William McClayton
-------------------------------------
William McClayton*                         Trustee                                      January 16, 2009

/s/Rebecca W. Rimel
-------------------------------------
Rebecca W. Rimel*                          Trustee                                      January 16, 2009

/s/William N. Searcy, Jr.
-------------------------------------
William N. Searcy, Jr.*                    Trustee                                      January 16, 2009


<PAGE>


SIGNATURE                                  TITLE                                        DATE
---------                                  -----                                        ----

/s/Jean Gleason Stromberg
-------------------------------------
Jean Gleason Stromberg*                    Trustee                                      January 16, 2009

/s/Robert H. Wadsworth
-------------------------------------
Robert H. Wadsworth*                       Trustee                                      January 16, 2009

/s/Axel Schwarzer
-------------------------------------
Axel Schwarzer*                            Trustee                                      January 16, 2009
</TABLE>

*By:     /s/Caroline Pearson
         ------------------------------
         Caroline Pearson**
         Assistant Secretary

**       Attorney-in-fact pursuant to the powers of attorney as filed on October
         22, 2008 in Post-Effective Amendment No. 65 to the Registrant's
         Registration Statement; and as filed on May 1, 2008 in Post-Effective
         Amendment No. 63 to the Registrant's Registration Statement.




                                       2
<PAGE>

                                                               File No. 33-11802
                                                               File No. 811-5002



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    EXHIBITS

                                       TO

                                    FORM N-1A

                         POST-EFFECTIVE AMENDMENT NO. 70
                            TO REGISTRATION STATEMENT

                                      UNDER

                           THE SECURITIES ACT OF 1933

                                       AND

                                AMENDMENT NO. 71

                            TO REGISTRATION STATEMENT

                                      UNDER

                       THE INVESTMENT COMPANY ACT OF 1940



                             DWS VARIABLE SERIES II




                                       13
<PAGE>


                             DWS VARIABLE SERIES II

                                  EXHIBIT INDEX
                                  -------------

                                     (h)(4)

                                     (h)(6)

                                     (h)(7)

                                     (i)(1)








                                       14