As Filed with the Securities and Exchange Commission on December 2, 2008

Securities Act File No. 333-

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**_________________**

**FORM N-14**

**REGISTRATION STATEMENT**

**UNDER**

**THE SECURITIES ACT OF 1933****X**

Pre-Effective Amendment No. __ [ ]

Post-Effective Amendment No. __ [ ]

**DWS BALANCED FUND**

*(Exact Name of Registrant as Specified in Charter)*

**345 Park Avenue**

**New York, NY 10154**

*(Address of Principal Executive Offices) (Zip Code)*

212-454-6778

(*Registrant’s Area Code and Telephone Number*)

**John Millette, Secretary**

**Two International Place**

**Boston, Massachusetts 02110**

*(Name and Address of Agent for Service)*

With copies to:

 

| **David A. Sturms, Esq.****Vedder Price P.C.****222 North LaSalle Street****Chicago, Illinois 60601** | **John W. Gerstmayr, Esq.****Thomas R. Hiller, Esq.****Ropes & Gray LLP****One International Place****Boston, Massachusetts 02110** |
|-------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

 

Approximate date of proposed public offering: As soon as practicable after the effective date of this Registration Statement.

TITLE OF SECURITIES BEING REGISTERED: Shares of Beneficial Interest (par value $0.01 per share) of the Registrant.

No filing fee is required because an indefinite number of shares have previously been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become            effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

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**QUESTIONS** **& ANSWERS**

**DWS Value Builder Fund, Inc.**

**Q&A**

| **Q** | **What is happening?** |
|-------|------------------------|

| **A** | Deutsche Asset Management (or “DeAM”, as defined on page ___ in the enclosed Prospectus/Proxy Statement) is proposing to merge DWS Value Builder Fund into DWS Balanced Fund. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

You are being asked to vote on the proposal to merge DWS Value Builder Fund into DWS Balanced Fund.

After carefully reviewing the proposal, your fund’s Board has determined that this action is in the best interests of the fund.**The Board unanimously recommends that you vote*****for*****this proposal.**

| **Q** | **Why has this proposal been made for my fund?** |
|-------|--------------------------------------------------|

| **A** | DeAM believes the proposed merger is in the best interest of DWS Value Builder Fund for several reasons. DeAM believes that the merger will result in lower management fees, lower operational expenses through economies of scale and a combined fund with a better performance record than DWS Value Builder Fund currently has, which may subsequently lead to                            additional sales and additional economies of scale. In addition, the proposed merger is consistent with ongoing efforts by DeAM to consolidate overlapping fund products. The merger would increase the investment opportunities available to current shareholders of DWS Value Builder Fund as part of a larger moderate asset allocation fund. Accordingly, DeAM proposed the merger of DWS Value Builder Fund into DWS Balanced Fund. If the merger is approved by shareholders of                            DWS Value Builder Fund, DeAM expects that substantially all of DWS Value Builder Fund’s holdings will be liquidated and the proceeds reinvested in other securities so that at the time of the merger, DWS Value Builder Fund’s portfolio will conform more closely to DWS Balanced Fund’s investment objective, policies, restrictions and strategies. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Q** | **Will I have to pay taxes as a result of the merger?** |
|-------|---------------------------------------------------------|

| **A** | The merger is expected to be a tax-free reorganization for federal income tax purposes and will not take place unless special tax counsel provides an opinion to that effect. As a result of the merger, however, your fund may lose the benefit of certain tax losses that could have been used to offset or defer future gains. Any tax loss carryforward is                            expected to be transferred to DWS Balanced Fund, subject to limitations imposed by the Internal Revenue Service. If you choose to redeem or exchange your shares before or after the merger, the redemption or exchange likely will generate taxable gain or loss; therefore, you may wish to consult a tax advisor before doing so. As noted above, substantially all of DWS Value Builder Fund’s holdings will be sold in connection with the merger. Any capital gains                            recognized in these sales on a net basis will be distributed to DWS Value Builder Fund’s shareholders as capital gain dividends and/or ordinary dividends during or with respect to the year of sale, and such distributions would be taxable to shareholders. Of course, you may also be subject to taxation as a result of the normal operations of your fund whether or not the merger occurs. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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| **Q** | **Upon the merger, will I own the same number of shares?** |
|-------|------------------------------------------------------------|

| **A** | The aggregate value of your shares will not change as a result of the merger. However, the number of shares you own will likely change as a result of the merger because your shares will be exchanged at the net asset value per share of DWS Value Builder Fund, which will probably be different from the net asset value per share of DWS Balanced                            Fund. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Q** | **When would the merger take place?** |
|-------|---------------------------------------|

| **A** | If approved, the merger would occur on or about April 20, 2009, or as soon as reasonably practicable after shareholder approval is obtained. Shortly after completion of the merger, shareholders whose accounts are affected by the merger will receive a confirmation statement reflecting their new account number and the number of shares                            owned. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Q** | **How can I vote?** |
|-------|---------------------|

| **A** | You can vote in any one of four ways: |
|-------|---------------------------------------|

|   | **•** | Through the Internet, by going to the website listed on your proxy card; |
|--------|------------|--------------------------------------------------------------------------|

|   | **•** | By telephone, with a toll-free call to the number listed on your proxy card; |
|--------|------------|------------------------------------------------------------------------------|

|   | **•** | By mail, by sending the enclosed proxy card, signed and dated, to us in the enclosed envelope; or |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   | **•** | In person, by attending the special meeting. |
|--------|------------|----------------------------------------------|

We encourage you to vote over the Internet or by telephone, following the instructions that appear on your proxy card. Whichever method you choose, please take the time to read the full text of the Prospectus/Proxy Statement before you vote.

| **Q** | **Will I be able to continue to track my fund’s performance in the newspaper, on the Internet or through the voice response system?** |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------|

| **A** | Yes. You will be able to track your fund’s performance through all these means. |
|-------|---------------------------------------------------------------------------------------|

| **Q** | **Whom should I call for additional information about this Prospectus/Proxy Statement?** |
|-------|------------------------------------------------------------------------------------------|

| **A** | Please call Computershare Fund Services, Inc., your fund’s proxy solicitor, at 1-866-774-4940. |
|-------|------------------------------------------------------------------------------------------------------|

 

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**DWS VALUE BUILDER FUND, INC.**

**A Message from the President**

________________________, 2009

Dear Shareholder:

I am writing to ask for your vote on an important matter that affects your investment in DWS Value Builder Fund, Inc. (“Value Builder Fund”). While you are, of course, welcome to join us at the Value Builder Fund shareholders’ meeting, most shareholders cast their vote by filling out and signing the enclosed proxy card, or by voting by telephone or through the            Internet.

We are asking for your vote on the following matter:

|   | **Proposal:** | **Approving an Agreement and Plan of Reorganization and the transactions it contemplates, including the transfer of all of the assets of Value Builder Fund to DWS Balanced Fund (“Balanced Fund”), in exchange for shares of Balanced Fund and the assumption by Balanced Fund of all the liabilities of Value Builder Fund, and the distribution of                            such shares, on a tax-free basis for federal income tax purposes, to the shareholders of Value Builder Fund in complete liquidation and termination of Value Builder Fund.** |
|--------|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Deutsche Asset Management (or “DeAM” as defined on page __ of the enclosed Prospectus/Proxy Statement) has proposed the merger of Value Builder Fund into Balanced Fund because it believes the proposed merger is in the best interest of Value Builder Fund for several reasons. DeAM believes that the merger will result in lower management fees, lower operational expenses            through economies of scale and a combined fund with a better performance record than Value Builder Fund currently has, which may subsequently lead to additional sales and additional economies of scale. In addition, the proposed merger is consistent with ongoing efforts by DeAM to consolidate overlapping fund products. The merger would increase the investment opportunities available to current shareholders of Value Builder Fund as part of a larger moderate asset allocation fund. The            Board of Directors of Value Builder Fund has approved the proposed merger.

In determining to approve the merger, the Board conducted a thorough review of the potential implications of the merger, and concluded that Value Builder Fund’s participation in the proposed merger would be in the best interests of Value Builder Fund and would not dilute the interests of its existing shareholders. A discussion of the factors the Board considered is included in            the attached Prospectus/Proxy Statement. If the merger is approved, the Board expects that the proposed changes will take effect during the second calendar quarter of 2009.

Included in this booklet is information about the upcoming shareholders’ meeting:

**•**          A Notice of a Special Meeting of Shareholders, which summarizes the issue for which you are being asked to provide voting instructions; and

**•**          A Prospectus/Proxy Statement, which provides detailed information on Balanced Fund, the specific proposal being considered at the shareholders’ meeting, and why the proposal is being made.

Although we would like very much to have each shareholder attend the meeting, we realize this may not be possible. Whether or not you plan to be present, we need your vote. We urge you to review

 

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the enclosed materials thoroughly. Once you’ve determined how you would like your interests to be represented, please promptly complete, sign, date and return the enclosed proxy card, vote by telephone or record your voting instructions on the Internet. A postage-paid envelope is enclosed for mailing, and telephone and Internet voting instructions are listed at the top of your proxy card. You may            receive more than one proxy card. If so, please vote each one.

I’m sure that you, like most people, lead a busy life and are tempted to put this proxy aside for another day. Please don’t. Your prompt return of the enclosed proxy card (or your voting by telephone or through the Internet) may save the necessity and expense of further solicitations.

Your vote is important to us. We appreciate the time and consideration I am sure you will give to this important matter. If you have questions about the proposal, please call Computershare Fund Services, Inc., Value Builder Fund’s proxy solicitor, at 1-866-774-4940 or contact your financial advisor. Thank you for your continued support of DWS Investments.

 

|   | Sincerely yours,/s/Michael ClarkMichael ClarkPresidentDWS Value Builder Fund, Inc. |
|--------|------------------------------------------------------------------------------------|
|   |                                                                               |

 

 

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**DWS VALUE BUILDER FUND, INC.**

**NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS**

This is the formal agenda for your Fund’s shareholder meeting. It tells you what matter will be voted on and the time and place of the meeting, in the event you choose to attend in person.

To the Shareholders of DWS Value Builder Fund, Inc. (“Value Builder Fund”):

A Special Meeting of Shareholders of Value Builder Fund will be held March 27, 2009 at 3:30pm Eastern time, at the offices of Deutsche Investment Management Americas Inc., 345 Park Avenue, 27th Floor, New York, New York 10154 (the “Meeting”), to consider the following (the “Proposal”):

|   | **Proposal:** | **Approving an Agreement and Plan of Reorganization and the transactions it contemplates, including the transfer of all of the assets of Value Builder Fund to DWS Balanced Fund (“Balanced Fund”), in exchange for shares of Balanced Fund and the assumption by Balanced Fund of all the liabilities of Value Builder Fund, and the distribution of                            such shares, on a tax-free basis for federal income tax purposes, to the shareholders of Value Builder Fund in complete liquidation and termination of Value Builder Fund.** |
|--------|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The persons named as proxies will vote in their discretion on any other business that may properly come before the Meeting or any adjournments or postponements thereof.

Holders of record of shares of Value Builder Fund at the close of business on January 6, 2009 are entitled to vote at the Meeting and at any adjournments or postponements thereof.

The chairman of the Meeting may adjourn the Meeting to a designated time, not more than 120 days after the record date, without notice with respect to the proposal to be considered, whether or not a quorum is present with respect to the proposal. Upon motion of the chairman of the Meeting, the question of adjournment may be submitted to a vote of the shareholders and any adjournment            must be approved by the vote of the holders of a majority of the shares present and entitled to vote with respect to the proposal without further notice. The Board may postpone the Meeting of shareholders prior to the Meeting with notice to the shareholders entitled to vote at, or receive notice of, the Meeting.

 

|                            | By order of the Board of Directors/s/ John MilletteJohn MilletteSecretary |
|---------------------------------|---------------------------------------------------------------------------|
| _________________________, 2009 |                                                                      |

 

**WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED OR RECORD YOUR VOTING INSTRUCTIONS BY TELEPHONE OR THROUGH THE INTERNET SO THAT YOU WILL BE REPRESENTED AT THE MEETING.**

 

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**IF YOU SIMPLY SIGN THE PROXY CARD, IT WILL BE VOTED IN ACCORDANCE WITH THE BOARD’S RECOMMENDATION ON THE PROPOSAL. YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD (OR YOUR VOTING BY TELEPHONE OR VIA THE INTERNET) MAY** **SAVE THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS.**

 

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**INSTRUCTIONS FOR SIGNING PROXY CARDS**

The following general rules for signing proxy cards may be of assistance to you and avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly.

1.         *Individual Accounts:*Sign your name exactly as it appears in the registration on the proxy card.

2.         *Joint Accounts:*Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card.

3.         *All Other Accounts:*The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration.**For example:**

 

| **Registration**                                                           | **Valid Signature**               |
|----------------------------------------------------------------------------|-----------------------------------|
| Corporate Accounts:                                                        |                              |
| (1)  ABC Corp.                                                   | ABC Corp.John Doe, Treasurer      |
| (2)  ABC Corp.                                                   | John Doe, Treasurer               |
| (3)  ABC Corp. c/o John Doe, Treasurer                           | John Doe                          |
| (4)  ABC Corp. Profit Sharing Plan                               | John Doe, Trustee                 |
| Partnership Accounts                                                       |                              |
| (1)  The XYZ Partnership                                         | Jane B. Smith, Partner            |
| (2) Smith and Jones, Limited Partnership                              | Jane B. Smith, General Partner    |
| Trust Accounts                                                             |                              |
| (1)  ABC Trust Account                                           | Jane B. Doe, Trustee              |
| (2)  Jane B. Doe, Trustee u/t/d 12/28/78                         | Jane B. Doe                       |
| Custodial or Estate Accounts                                               |                              |
| (1)  John B. Smith, Cust. f/b/o John B. Smith Jr. UGMA/UTMA | John B. Smith                     |
| (2) Estate of John B. Smith                                           | John B. Smith, Jr., Executor |

 

 

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**IMPORTANT INFORMATION**

**FOR SHAREHOLDERS OF**

**DWS VALUE BUILDER FUND, INC.**

This document contains a Prospectus/Proxy Statement and a proxy card. A proxy card is, in essence, a ballot. When you vote your proxy, it tells us how to vote on your behalf on an important issue relating to your Fund. If you complete and sign the proxy (or tell us how you want to vote by voting by telephone or through the Internet), we’ll vote it exactly as you tell us. If you            simply sign the proxy, we’ll vote it in accordance with the Board’s recommendation on page ____.

We urge you to review the Prospectus/Proxy Statement carefully, and either fill out your proxy card and return it to us by mail, vote by telephone or record your voting instructions through the Internet. Your prompt return of the enclosed proxy card (or your voting by telephone or through the Internet) may save the necessity and expense of further solicitations.

We want to know how you would like to vote and welcome your comments. Please take a few minutes to read these materials and return your proxy to us. If you have any questions, please call Computershare Fund Services, Inc., DWS Value Builder Fund’s proxy solicitor, at the special toll-free number we have set up for you 1-866-774-4940 or contact your financial advisor.

| Exhibit A | Form of Agreement and Plan of Reorganization |
|----------------|----------------------------------------------|

| Exhibit B | Financial Highlights - TO BE UPDATED |
|----------------|--------------------------------------|

**Proxy card enclosed.**

For more information, please call your Fund’s proxy solicitor, Computershare Fund Services, Inc., at 1-866-774-4940.

 

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**PROSPECTUS/PROXY STATEMENT**

_____________________, 2009

 

| **Acquisition of the assets of:**                                                                                                                    | **By and in exchange for shares of:**                                                                                                     |
|------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| DWS Value Builder Fund, Inc.

345 Park Avenue

New York, NY 10154

800-621-1048 (Class A, B and C Shares)

800-730-1313 (Institutional Class Shares) | DWS Balanced Fund

345 Park Avenue

New York, NY 10154

800-621-1048 (Class A, B and C Shares)

800-730-1313 (Institutional Class Shares) |

 

This Prospectus/Proxy Statement is being furnished in connection with the proposed merger of DWS Value Builder Fund, Inc. (“Value Builder Fund”) into DWS Balanced Fund (“Balanced Fund”). Value Builder Fund and Balanced Fund are referred to herein collectively as the “Funds,” and each is referred to herein individually as a “Fund.” As a            result of the proposed merger, each shareholder of Value Builder Fund will receive a number of full and fractional shares of the corresponding class of Balanced Fund equal in aggregate value as of the Valuation Time (as defined below on page _____) to the aggregate value of such shareholder’s Value Builder Fund shares.

This Prospectus/Proxy Statement is being mailed on or about __________, 2009. It explains concisely what you should know before voting on the matter described herein or investing in Balanced Fund, an open-end management investment company. Please read it carefully and keep it for future reference.

**The securities offered by this Prospectus/Proxy Statement have not been approved or disapproved by the Securities and Exchange Commission (the “SEC”), nor has the SEC passed upon the accuracy or adequacy of this Prospectus/Proxy Statement. Any representation to the contrary is a criminal offense.**

The following documents have been filed with the SEC and are incorporated into this Prospectus/Proxy Statement by reference:

|   | (i) | the prospectus of Balanced Fund dated March 1, 2008, as supplemented from time to time, for Class A, B and C shares, a copy of which, if applicable, is included with this Prospectus/Proxy Statement; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the prospectus of Balanced Fund dated March 1, 2008, as supplemented from time to time, for Institutional Class shares, a copy of which, if applicable, is included with this Prospectus/Proxy Statement; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | the prospectus of Value Builder Fund dated August 1, 2008, as supplemented from time to time, for Class A, B and C shares; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | the prospectus of Value Builder Fund dated August 1, 2008, as supplemented from time to time, for Institutional Class shares; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | the statement of additional information of Value Builder Fund dated August 1, 2008, as supplemented from time to time, for Class A, B, C and Institutional Class shares; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | the statement of additional information relating to the proposed merger, dated __________ 2009 (the “Merger SAI”); and |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------|

 

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|   | (vii) | the audited financial statements and related independent registered public accounting firm’s report for Value Builder Fund contained in the Annual Report for the fiscal year ended March 31, 2008 and the updated unaudited financial statements contained in the Semi-Annual Report for the six-month period ended September 30, 2008. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

No other parts of Value Builder Fund’s Annual Report or Semi-Annual Report are incorporated by reference herein.

The financial highlights for Balanced Fund contained in the Annual Report to shareholders for the period ended October 31, 2008, are attached to this Prospectus/Proxy Statement as Exhibit B.

Shareholders may get free copies of the Funds’ Annual Reports, Semi-annual Reports, prospectuses, statements of additional information (the “SAIs”) and/or the Merger SAI, request other information about a Fund, or make shareholder inquiries, by contacting their financial advisor or by calling the corresponding Fund at 1-800-621-1048 (1-800-730-1313 for Institutional            Class shares).

**Like shares of Value Builder Fund, shares of Balanced Fund are not deposits or obligations of, or guaranteed or endorsed by, any financial institution, are not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other agency, and involve risk, including the possible loss of the principal amount invested.**

This document is designed to give you the information you need to vote on the proposal. Much of the information is required disclosure under rules of the SEC; some of it is technical. If there is anything you don’t understand, please contact Computershare Fund Services, Inc., Value Builder Fund’s proxy solicitor, at 1-866-774-4940, or contact your financial            advisor.

Each Fund is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the SEC. You may review and copy information about the Funds, including the SAIs, at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. You may call the SEC at 1-202-551-5850 for            information about the operation of the public reference room. You may obtain copies of this information, with payment of a duplication fee, by electronic request at the following e-mail address:publicinfo@sec.gov, or by writing the Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549. You may also access reports and other information about the Funds            on the EDGAR database on the SEC’s Internet site athttp://www.sec.gov.

 

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**I.**    **SYNOPSIS**

The responses to the questions that follow provide an overview of key points typically of concern to shareholders considering a proposed merger between mutual funds. These responses are qualified in their entirety by the remainder of this Prospectus/Proxy Statement, which you should read carefully because it contains additional information and further details regarding the proposed            merger.

| **1.** | **What is being proposed?** |
|--------|-----------------------------|

The Board of Value Builder Fund is recommending that shareholders approve the transactions contemplated by the Agreement and Plan of Reorganization (as described below in Part IV and the form of which is attached hereto as Exhibit A), which are referred to herein as a merger of Value Builder Fund into Balanced Fund. If approved by shareholders, all of the assets of Value Builder            Fund will be transferred to Balanced Fund solely in exchange for the issuance and delivery to Value Builder Fund of shares of Balanced Fund (“Merger Shares”) with a value equal to the value of Value Builder Fund’s assets net of liabilities and for the assumption by Balanced Fund of all the liabilities of Value Builder Fund. All Merger Shares delivered to Value Builder Fund will be delivered at net asset value without a sales load, commission or other similar fee            being imposed. Immediately following the transfer, the appropriate class of Merger Shares received by Value Builder Fund will be distributed pro rata, on a tax-free basis for federal income tax purposes, to its shareholders of record.

| **2.** | **What will happen to my shares of Value Builder Fund as a result of the merger?** |
|--------|------------------------------------------------------------------------------------|

Your shares of Value Builder Fund will, in effect, be exchanged on a federal income tax-free basis for shares of the same class of Balanced Fund with an equal aggregate net asset value as of the Valuation Time (as defined below on page ___).

| **3.** | **Why has the Board of Value Builder Fund recommended that shareholders approve the merger?** |
|--------|-----------------------------------------------------------------------------------------------|

Deutsche Asset Management (“DeAM”) advised the Board of Value Builder Fund that it believes the proposed merger is in the best interest of the Fund for several reasons. DeAM believes that the merger will result in lower management fees, lower operational expenses through economies of scale and a combined fund with a better performance record than Value Builder Fund            currently has, which may subsequently lead to additional sales and additional economies of scale. In addition, the proposed merger is consistent with ongoing efforts by DeAM to consolidate overlapping fund products and would increase the investment opportunities available to current shareholders of Value Builder Fund as part of a larger moderate asset allocation fund. If the merger is approved by shareholders of Value Builder Fund, DeAM expects that substantially all of Value            Builder Fund’s holdings will be liquidated and the proceeds reinvested in other securities so that at the time of the merger, Value Builder Fund’s portfolio will conform more closely to Balanced Fund’s investment objective, policies, restrictions and strategies. In determining to recommend that shareholders of Value Builder Fund approve the merger, the Board considered, among others, the following factors:

|   | **•** | DeAM’s recommendation that a merger with Balanced Fund was the best available alternative for shareholders of Value Builder Fund. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Similarities and differences between Value Builder Fund’s and Balanced Fund’s investment strategies. |
|--------|------------|------------------------------------------------------------------------------------------------------------------|

|   | **•** | The effective advisory fees paid by the combined fund will be lower at all asset levels as compared to the advisory fees paid by Value Builder Fund. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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|   | **•** | The estimated total operating expense ratio of each class of the combined fund is expected to be lower than the current operating expense ratio of each corresponding class of Value Builder Fund. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The Board has concluded that: (1) the merger is in the best interests of Value Builder Fund and (2) the interests of the existing shareholders of Value Builder Fund will not be diluted as a result of the merger. Accordingly, the Board unanimously recommends that shareholders approve the Agreement (as defined on page____) effecting the merger. For a complete discussion of            the Board’s considerations please see “Information About the Proposed Merger—Background and Board’s Considerations Relating to the Proposed Merger” below.

| **4.** | **What are the investment goals, policies and restrictions of the Funds?** |
|--------|----------------------------------------------------------------------------|

While not identical, the two Funds have similar investment objectives and techniques. Value Builder Fund seeks to maximize total return through a combination of long-term growth of capital and current income. The Fund seeks to achieve its objective by investing primarily in a portfolio of common stocks and fixed-income securities. Under normal market conditions, between 40% and 75%            of the Fund’s assets will be invested in common stocks and at least 25% of the Fund’s assets will be invested in fixed-income securities. In selecting investments for the Fund, the Fund’s advisor determines the relative percentages of assets to be invested in common stocks and fixed-income securities based on its judgment as to general market and economic conditions, trends in yields and interest rates and changes in fiscal and monetary policy. Although the Fund            invests primarily in US issuers, it may invest up to 25% of its assets in foreign securities. In selecting common stocks, the Fund’s advisor seeks to find common stocks it believes are undervalued in the marketplace based on such characteristics as earnings, cash flow, or asset values. In evaluating a stock’s potential, portfolio management also considers other factors such as historical earnings growth, industry position, the strength of management and            management’s commitment to the interests of their shareholders. While the Fund does not limit its investments to issuers in a particular capitalization range, portfolio management generally focuses on securities of larger companies. Portfolio management expects that substantially all of the Fund’s fixed-income securities investments will be made indirectly by investing in DWS Short Duration Plus Fund, an affiliated mutual fund. DWS Short Duration Plus Fund invests in            securities of varying maturities and normally seeks to maintain an average portfolio duration of no longer than three years. In addition to investments in DWS Short Duration Plus Fund, debt securities in which the Fund may invest include those rated investment grade and below investment grade high yield/high risk bonds. The Fund may invest up to 15% of net assets in high yield/high risk bonds. Although it is not a principal investment strategy for the Fund, Value Builder Fund is            permitted, but not required, to use various types of derivatives (contracts whose value is based on, for example, indices, currencies or securities). The Fund may use derivatives in circumstances where portfolio management believes they offer an economical means of gaining exposure to a particular asset class or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. In addition, the Fund may lend its investment securities in an            amount up to 33 1/3% of its total assets to approved institutional borrowers.

Balanced Fund seeks the highest total return, a combination of income and capital appreciation, consistent with reasonable risk. The Fund can buy many types of securities, among them common stocks, convertible securities, corporate bonds, US government bonds, mortgage- and asset-backed securities and certain derivatives. The Fund normally invests approximately 60% of its net assets            in common stocks and other equity securities and approximately 40% of its net assets in fixed-income securities, including lower-quality, high-yield debt securities. These percentages may fluctuate in response to changing market conditions, but the Fund will at all times invest at least 25% of net assets in fixed-income senior securities. Generally, most securities will be from US issuers, but the Fund may invest up to 25% of total assets in foreign securities. The Fund’s            advisor allocates Fund assets among various asset categories

 

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including growth and value stocks of large capitalization companies, small capitalization companies and investment-grade and high-yield debt securities. The Fund’s advisor reviews the Fund’s allocation among the various asset categories periodically and may adjust the Fund’s allocation among various asset categories based on current or expected market conditions or to manage risk as is            consistent with the Fund’s overall investment strategy. In addition to the Fund’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-term and medium-term mispricings within global bond, equity 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 bonds and equity indexes and over-the-counter forward currency contracts, and is expected to have a low correlation to the Fund’s other securities holdings. In addition to derivatives utilized within the iGAP strategy, the Fund may, but is not required, to use various types of derivatives.            Derivatives may be used for hedging and for risk management or non-hedging purposes to enhance potential gains. The Fund may use derivatives in circumstances where portfolio management believes they offer a more efficient or economical means of gaining exposure to a particular asset class or market or to maintain a high level of liquidity to meet shareholder redemptions or other needs while maintaining exposure to the market. In particular, portfolio management may use futures,            options, forward currency transactions and swaps. In addition, the Fund may lend its investment securities in an amount up to 33 1/3% of its total assets to approved institutional borrowers.

While DeAM believes that Balanced Fund should provide a comparable investment opportunity for shareholders of Value Builder Fund, there are a number of significant differences in the portfolios of each Fund. DeAM has estimated that approximately __% of the portfolio of Value Builder Fund will be liquidated prior to the merger. Proceeds from the liquidation will be used to acquire            securities consistent with Balanced Fund’s investment objective, policies, restrictions and strategies.

The following table sets forth a summary of the composition of each Fund’s investment portfolio as of October 31, 2008, and DeAM’s estimation of the portfolio composition of Balanced Fund assuming consummation of the proposed merger.

**Portfolio Composition**

(as a % of Fund)

 

|                   | **Value Builder Fund** | **Balanced Fund** | **Balanced Fund—Estimated (assuming consummation of merger)**(1) |
|------------------------|------------------------|-------------------|------------------------------------------------------------------------|
| Consumer Discretionary | N/A                    | 9.0%              | 9.0%                                                                   |
| Consumer Staples       | 11.0%                  | 10.0%             | 10.0%                                                                  |
| Energy                 | 13.0%                  | 12.0%             | 12.0%                                                                  |
| Financials             | 27.0%                  | 13.0%             | 13.0%                                                                  |
| Health Care            | 12.0%                  | 16.0%             | 16.0%                                                                  |
| Industrials            | 7.0%                   | 11.0%             | 11.0%                                                                  |
| Information Technology | 7.0%                   | 14.0%             | 14.0%                                                                  |
| Telecom Services       | 9.0%                   | N/A               | N/A                                                                    |
| Other                  | 14.0%                  | 15.0%             | 15.0%                                                                  |
| **Total**              | 100.0%                 | 100.0%            | 100.0%                                                                 |

 

_______________

| (1) | Reflects DeAM’s estimation of the portfolio composition of Balanced Fund subsequent to the merger, taking into account that prior to the merger, a significant portion of the portfolio of Value Builder Fund will be liquidated and proceeds will be used to acquire other securities consistent with the investment objective, policies, restrictions                            and |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

----

strategies of Balanced Fund. There can be no assurance as to actual portfolio composition of Balanced Fund subsequent to the merger.

| **5.** | **How do the management fees and expense ratios of the two Funds compare, and what are they estimated to be following the merger?** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|

The following tables summarize the fees and expenses you may pay when investing in the Funds, the expenses that each of the Funds incurred for the 12-month period ended October 31, 2008 and the pro forma estimated expense ratios of Balanced Fund assuming consummation of the merger as of that date.

**Shareholder Fees**

(fees paid directly from your investment)

 

| **Fee Table**                                                                              | **Class A** | **Class B** | **Class C** | **Inst Class** |
|--------------------------------------------------------------------------------------------|-------------|-------------|-------------|----------------|
| **Maximum Sales Charge (Load) Imposed on Purchases**(as % of offering price)               |        |        |        |           |
| Value Builder Fund                                                                         | 5.75%(1)    | None        | None        | None           |
| Balanced Fund                                                                              | 5.75%(1)    | None        | None        | None           |
| **Maximum Contingent Deferred Sales Charge (Load)**(as% of redemption proceeds)            |        |        |        |           |
| Value Builder Fund                                                                         | None(2)     | 4.00%       | 1.00%       | None           |
| Balanced Fund                                                                              | None(2)     | 4.00%       | 1.00%       | None           |
| **Redemption/Exchange fee on shares owned less than 15 days**(as % of redemption proceeds) |        |        |        |           |
| Value Builder Fund                                                                         | None        | None        | None        | None           |
| Balanced Fund                                                                              | 2.00(3)     | 2.00(3)     | 2.00(3)     | 2.00(3)        |

 

_______________

| (1) | Because of rounding in the calculation of the offering price, the actual maximum front-end sales charge paid by an investor may be higher than the percentage noted. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The redemption of shares purchased at net asset value under the Large Order NAV Purchase Privilege may be subject to a contingent deferred sales charge of 1.00% if redeemed within 12 months of purchase and 0.50% if redeemed within the next six months following purchase. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | This fee is charged on all applicable redemptions or exchanges. |
|-----|-----------------------------------------------------------------|

As shown below, the merger is expected to result in a lower total expense ratio for shareholders of Value Builder Fund. However, there can be no assurance that the merger will result in expense savings.

 

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**Annual Fund Operating Expenses**

(expenses that are deducted from Fund assets)

 

|                                     | **Management Fees** | **Distribution/Service****(12b-1) Fee** | **Other Expenses** | **Total Annual Fund Operating Expenses(7)** | **Less Expense Waiver/ Re-imbursements** | **Net Annual Fund Operating Expenses** |
|------------------------------------------|---------------------|-----------------------------------------|--------------------|---------------------------------------------|------------------------------------------|----------------------------------------|
| **Value Builder Fund**                   |                |                                    |               |                                        |                                     |                                   |
| Class A                                  | 0.86%               | 0.25%                                   | 0.68%(1)           | 1.79%                                       | (0.52%)(2)                               | 1.27%                                  |
| Class B                                  | 0.86%               | 0.99%                                   | 1.06%(1)           | 2.91%                                       | (0.89%)(2)                               | 2.02%                                  |
| Class C                                  | 0.86%               | 1.00%                                   | 0.76%(1)           | 2.62%                                       | (0.60%)(2)                               | 2.02%                                  |
| Institutional Class                      | 0.86%               | None                                    | 0.49%(1)           | 1.35%                                       | 0.00%                                    | 1.35%                                  |
| **Balanced Fund**                        |                |                                    |               |                                        |                                     |                                   |
| Class A                                  | 0.37%               | 0.24%                                   | 0.45%(1)           | 1.06%                                       | 0.00%                                    | 1.06%                                  |
| Class B                                  | 0.37%               | 0.99%(4)                                | 0.82%(1)           | 2.18%                                       | (0.23%)(3)                               | 1.95%                                  |
| Class C                                  | 0.37%               | 1.00%                                   | 0.58%(1)           | 1.95%                                       | 0.00%                                    | 1.95%                                  |
| Institutional Class                      | 0.37%               | None                                    | 0.44%(1)           | 0.81%                                       | 0.00%                                    | 0.81%                                  |
| **Balanced Fund**(Pro forma combined)(5) |                |                                    |               |                                        |                                     |                                   |
| Class A                                  | 0.37%               | 0.25%                                   | 0.43%(1)(6)        | 1.05%                                       | 0.00%                                    | 1.05%                                  |
| Class B                                  | 0.37%               | 0.99%(4)                                | 0.82%(1)(6)        | 2.18%                                       | (0.23%)(3)                               | 1.95%                                  |
| Class C                                  | 0.37%               | 1.00%                                   | 0.57%(1)(6)        | 1.94%                                       | 0.00%                                    | 1.94%                                  |
| Institutional Class                      | 0.37%               | None                                    | 0.27%(1)(6)        | 0.64%                                       | 0.00%                                    | 0.64%                                  |

 

_______________

| (1) | Includes 0.10% paid to Deutsche Investment Management Americas Inc. (“DIMA” or “Advisor”), the investment manager for the Funds, for administrative and accounting services pursuant to an Administrative Services Agreement. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Through September 30, 2009, DIMA has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund to the extent necessary to maintain the Fund’s total operating expenses at 1.27%, 2.02% and 2.02% for Class A, Class B and Class C shares, respectively, excluding certain                            expenses such as extraordinary expenses, taxes, brokerage and interest expenses. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Through September 30, 2009, DIMA has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund to the extent necessary to maintain the Fund’s total operating expenses at 1.95% for Class B shares, excluding certain expenses such as extraordinary expenses, taxes, brokerage                            and interest expenses. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The Distributor has temporarily agreed to eliminate the 12b-1 distribution fee of 0.75% for Class B shares only. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

| (5) | Pro forma expenses do not include the expenses expected to be borne by Value Builder Fund in connection with the merger. See pages ___ and ___ for additional information on these fees. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Other expenses are estimated, accounting for the effect of the merger. |
|-----|------------------------------------------------------------------------|

| (7) | The Annual Fund Operating Expenses table excludes the effect of underlying fee expenses. For the 12-month period ended October 31, 2008, Value Builder Fund and Balanced Fund’s indirect expenses from investing in underlying funds was 0.19% and less than 0.01%, respectively. The pro forma indirect expenses of Balanced Fund from investing in                            underlying funds is less than 0.01%. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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**Examples**

These examples translate the expenses shown in the preceding table into dollar amounts. By doing this, you can more easily compare the costs of investing in the Funds. The examples make certain assumptions. They assume that you invest $10,000 in a Fund for the time periods shown and reinvest all dividends and distributions. They also assume a 5% return on your investment each year and            that a Fund’s operating expenses remain the same. The examples are hypothetical; your actual costs and returns may be higher or lower.

 

|                                                         | **1 Year** | **3 Years** | **5 Years** | **10 Years** |
|--------------------------------------------------------------|------------|-------------|-------------|--------------|
| **Value Builder Fund**                                       |       |        |        |         |
| **Assuming you sold your shares at the end of each period**. |       |        |        |         |
| Class A                                                      | $697       | $1,058      | $1,443      | $2,519       |
| Class B(1)                                                   | $605       | $1,117      | $1,655      | $2,655       |
| Class C                                                      | $305       | $ 758       | $1,337      | $2,910       |
| Institutional Class                                          | $137       | $ 428       | $ 739       | $1,624       |
| **Assuming you kept your shares.**                           |       |        |        |         |
| Class A                                                      | $697       | $1,058      | $1,443      | $2,519       |
| Class B(1)                                                   | $205       | $ 817       | $1,455      | $2,655       |
| Class C                                                      | $205       | $ 758       | $1,337      | $2,910       |
| Institutional Class                                          | $137       | $ 428       | $ 739       | $1,624       |
| **Balanced Fund**                                            |       |        |        |         |
| **Assuming you sold your shares at the end of each period.** |       |        |        |         |
| Class A                                                      | $677       | $ 893       | $1,126      | $1,795       |
| Class B(1)                                                   | $598       | $ 960       | $1,349      | $1,946       |
| Class C                                                      | $298       | $ 612       | $1,052      | $2,275       |
| Institutional Class                                          | $ 83       | $ 259       | $ 450       | $1,002       |
| **Assuming you kept your shares.**                           |       |        |        |         |
| Class A                                                      | $677       | $ 893       | $1,126      | $1,795       |
| Class B(1)                                                   | $198       | $ 660       | $1,149      | $1,946       |
| Class C                                                      | $198       | $ 612       | $1,052      | $2,275       |
| Institutional Class                                          | $ 83       | $ 259       | $ 450       | $1,002       |
| **Balanced Fund**(Pro forma combined)                        |       |        |        |         |
| **Assuming you sold your shares at the end of each period.** |       |        |        |         |
| Class A                                                      | $676       | $ 890       | $1,121      | $1,784       |
| Class B(1)                                                   | $598       | $ 960       | $1,349      | $1,941       |
| Class C                                                      | $297       | $ 609       | $1,047      | $2,264       |
| Institutional Class                                          | $ 65       | $ 205       | $ 357       | $ 798        |
| **Assuming you kept your shares.**                           |       |        |        |         |
| Class A                                                      | $676       | $ 890       | $1,121      | $1,784       |
| Class B(1)                                                   | $198       | $ 660       | $1,149      | $1,941       |
| Class C                                                      | $197       | $ 609       | $1,047      | $2,264       |
| Institutional Class                                          | $ 65       | $ 205       | $ 357       | $ 798        |

 

_______________

| (1) | Reflects conversion of Class B to Class A shares, which pay lower fees. Conversion occurs six years after purchase. |
|-----|---------------------------------------------------------------------------------------------------------------------|

 

----

The tables below set forth the annual management fee schedules of the Funds, expressed as a percentage of net assets. As of October 31, 2008, Balanced Fund and Value Builder Fund had net assets of $1.10 billion and $77 million, respectively.

The fee schedule for each Fund is as follows:

 

| **Balanced Fund**(Pre- and Post Merger) | **Value Builder Fund** |
|-----------------------------------------|------------------------|
| First $1.5 billion                      | 0.370%                 | First $50 million | 0.915% |
| Next $500 million                       | 0.345%                 | Next $50 million | 0.765% |
| Next $1.5 billion                       | 0.310%                 | Next $100 million | 0.715% |
| Next $2 billion                         | 0.300%                 | Thereafter | 0.615% |
| Next $2 billion                         | 0.290%                 |   |   |
| Next $2.5 billion                       | 0.280%                 |   |   |
| Next 2.5 billion                        | 0.270%                 |   |   |
| Thereafter                              | 0.260%                 |   |   |

 

| **6.** | **What are the federal income tax consequences of the proposed merger?** |
|--------|--------------------------------------------------------------------------|

For federal income tax purposes, no gain or loss is expected to be recognized by Value Builder Fund or its shareholders as a direct result of the merger. As a result of the merger, however, Value Builder Fund and its shareholders may lose the benefit of certain tax losses that could have been used to offset or defer future gains. In addition, the merger will require Value Builder            Fund to distribute all of its investment company taxable income and net capital gains as of the merger date to its shareholders. Further, Value Builder’s sale of substantially all its assets in anticipation of the merger may result in increased distributions and potentially at a higher tax rate to shareholders than would have been the case under the normal operation of Value Builder Fund. For a more detailed discussion of the tax consequences of the merger, please see            “Information about the Proposed Merger — Certain Federal Income Tax Consequences,” below.

| **7.** | **Will my dividends be affected by the merger?** |
|--------|--------------------------------------------------|

The merger will not result in a change in dividend policy.

| **8.** | **Do the procedures for purchasing, redeeming and exchanging shares of the two Funds differ?** |
|--------|------------------------------------------------------------------------------------------------|

No.  The procedures for purchasing and redeeming shares of a particular class for each Fund, and for exchanging shares of each Fund for shares of other DWS funds, are identical.

| **9.** | **How will I be notified of the outcome of the merger?** |
|--------|----------------------------------------------------------|

If the proposed merger is approved by shareholders, you will receive confirmation after the merger is completed, indicating your new account number and the number of Merger Shares you are receiving. Otherwise, you will be notified in the next shareholder report of Value Builder Fund.

| **10.** | **Will the number of shares I own change?** |
|---------|---------------------------------------------|

Yes, the number of shares you own will most likely change, but the aggregate value of the shares of Balanced Fund you receive will equal the aggregate value of the shares of Value Builder Fund that you hold at the Valuation Time (as defined on page ___). Even though the net asset value per share of each Fund is likely to be different, the total value of each shareholder’s            holdings will not change as a result of the merger.

 

----

| **11.** | **What percentage of shareholders’ votes is required to approve the merger?** |
|---------|-------------------------------------------------------------------------------------|

Approval of the merger will require the “yes” vote of the holders of a majority of the outstanding voting securities of Value Builder Fund as defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

The Directors believe that the proposed merger is in the best interests of Value Builder Fund.**Accordingly, the Directors unanimously recommend that shareholders vote FOR approval of the proposed merger.**

**II.**  **INVESTMENT STRATEGIES AND RISK FACTORS**

What are the main investment strategies and related risks of Balanced Fund, and how do they compare with those of Value Builder Fund?

*Objectives and Strategies.*Balanced Fund seeks the highest total return, a combination of income and capital appreciation, consistent with reasonable risk and Value Builder Fund seeks to maximize total return through a combination of long-term growth of capital and current income. Balanced Fund can buy many types of securities, among them common stocks,            convertible securities, corporate bonds, US government bonds, mortgage- and asset-backed securities and certain derivatives. The Fund normally invests approximately 60% of its net assets in common stocks and other equity securities and approximately 40% of its net assets in fixed-income securities, including lower-quality, high-yield debt securities. These percentages may fluctuate in response to changing market conditions, but the Fund will at all times invest at least 25% of net            assets in fixed-income senior securities. Generally, most securities will be from US issuers, but the Fund may invest up to 25% of total assets in foreign securities.

Value Builder Fund seeks to achieve its objective by investing primarily in a portfolio of common stocks and fixed-income securities. Under normal market conditions, between 40% and 75% of the Fund’s assets will be invested in common stocks and at least 25% of the Fund’s assets will be invested in fixed-income securities. In selecting investments for the Fund, the Advisor            determines the relative percentages of assets to be invested in common stocks and fixed-income securities based on its judgment as to general market and economic conditions, trends in yields and interest rates and changes in fiscal and monetary policy. Although the Fund invests primarily in US issuers, it may invest up to 25% of its assets in foreign securities. Substantially all of the Fund’s fixed-income securities investments are made indirectly by investing in DWS Short            Duration Plus Fund, an affiliated mutual fund. DWS Short Duration Plus Fund invests in securities of varying maturities and normally seeks to maintain an average portfolio duration of no longer than three years. In addition to investments in DWS Short Duration Plus Fund, debt securities in which the Fund may invest include those rated investment grade and below investment grade high yield/high risk bonds. The Fund may invest up to 15% of net assets in high yield/high risk bonds.            While the Fund does not limit its investments to issuers in a particular capitalization range, the Advisor generally focuses on securities of larger companies.

The Funds use different investment processes. For Balanced Fund, the Advisor allocates Fund assets among various asset categories including growth and value stocks of large capitalization companies, small capitalization companies and investment-grade and high-yield debt securities. The Advisor reviews the Fund’s allocation among the various asset categories periodically and may            adjust the Fund’s allocation among various asset categories based on current or expected market conditions or to manage risk as is consistent with the Fund’s overall investment strategy. The Advisor uses one or more strategies within each asset category for selecting equity and debt securities for the Fund’s portfolio.

 

----

Each strategy is managed by a team of portfolio managers that specialize in the respective asset category. The strategies that the Advisor may implement utilize a variety of quantitative and qualitative techniques.

For Value Builder Fund, the Advisor seeks to find common stocks it believes are undervalued in the marketplace based on such characteristics as earnings, cash flow, or asset values. In evaluating a stock’s potential, the Advisor also considers other factors such as historical earnings growth, industry position, the strength of management and management’s commitment to the            interests of shareholders. While the Fund does not limit its investments to issuers in a particular capitalization range, the Advisor generally focuses on securities of larger companies. The Advisor looks for attractive price-to-value relationships in undervalued stocks of strong companies with good management. The Advisor emphasizes individual stock selection, fundamental research, and valuation flexibility, without rigid constraints. The Advisor begins by screening for stocks            whose price-to-earnings ratios are below the average for the S&P 500 Index. The Advisor then compares a company’s stock price to its book value, cash flow and yield, and analyzes individual companies to identify those that appear to be financially sound and have strong potential for long-term growth. The Advisor assembles the Fund’s common stock portfolio from among the most attractive stocks, drawing on an analysis of economic outlooks for various sectors and            industries.

*Other Investments.*In addition to Balanced Fund’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-term and medium-term mispricings within global bond,            equity 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 bonds and equity indexes and over-the-counter forward currency contracts, and is expected to have a low correlation to the Fund’s other securities holdings.

In addition to derivatives utilized within the iGAP strategy, the Balanced Fund is also permitted, but is not required, to use various types of derivatives. Derivatives may be used for hedging and for risk management or non-hedging purposes to enhance potential gains. Value Builder Fund does not employ the iGAP strategy; however, Value Builder Fund is permitted, but not required, to            use various types of derivatives. Each Fund may use derivatives in circumstances where the Advisor believes they offer economical means of gaining exposure to a particular asset class or to maintain a high level of liquidity to meet shareholder redemptions or other needs while maintaining exposure to the market. In particular, Balanced Fund may use futures, options, forward currency transactions and swaps, and Value Builder Fund may use futures, options and covered call            options.

*Securities Lending.*Each Fund 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.

*Other Policies.*Although major changes tend to be infrequent, each Fund’s Board could change the Fund’s investment objectives without seeking shareholder approval.

As a temporary defensive measure, each Fund could shift up to 100% of its assets into investments such as money market securities or other short-term securities that offer comparable levels of risk. This could prevent losses, but while engaged in a temporary defensive position, a Fund will not be pursuing its investment objectives. However, portfolio management may choose not to use            these strategies for various reasons, even in volatile market conditions.

Balanced Fund also may trade securities actively. This could raise transaction costs (thus lowering return) and could mean higher taxable distributions.

 

----

DeAM believes that Balanced Fund should provide a comparable investment opportunity for shareholders of Value Builder Fund.

*Primary Risks.*As with any investment, you may lose money by investing in Balanced Fund. Certain risks associated with an investment in Balanced Fund are summarized below. Subject to certain exceptions, the risks of an investment in Balanced Fund are similar to the risks of an investment in Value Builder Fund. More detailed descriptions of the risks            associated with an investment in Balanced Fund can be found in the Balanced Fund prospectus and SAI.

The value of your investment in Balanced Fund will change with changes in the values of the investments held by Balanced Fund. A wide array of factors can affect those values. In this summary we describe the principal risks that may affect Balanced Fund’s investments as a whole. Balanced Fund could be subject to additional principal risks because the types of investments it            makes can change over time.

*Asset Allocation Risk.*Although asset allocation among different asset categories generally reduces risk and exposure to any one category, the risk remains that the Advisor may favor an asset category that performs poorly relative to the other asset categories. Because the Fund employs more than one team of portfolio managers to manage each strategy            within the asset categories in which the Fund’s assets are allocated, it is possible that different portfolio management teams could be purchasing or selling the same security at the same time which could affect the price which the Fund pays, or receives, for a particular security. In addition, it is possible that as one team of portfolio managers is purchasing a security another team of portfolio managers could be selling the same security resulting in no significant change            in the overall assets of the Fund but incurring additional costs for the Fund. Further, because the Advisor may periodically adjust Balanced Fund’s allocation among various asset categories, the Fund may incur additional costs associated with portfolio turnover. An investment in Value Builder Fund is also subject to Asset Allocation Risk, though Value Builder Fund has a single manager and is not, therefore, subject to the risks arising from possible conflicting actions by            different teams of portfolio managers.

*Stock Market Risk.*As with most stock funds, the most important factor affecting Balanced Fund is how the stock market performs. To the extent Balanced Fund invests in a particular market sector, the Fund’s performance may be proportionally 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 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 Balanced Fund makes and Balanced Fund may not            be able to get attractive prices for them. An investment in Value Builder Fund is also subject to this risk.

*Industry Risk.*While Balanced Fund does not concentrate in any industry or sector, to the extent that the Fund has exposure to a given industry or sector, any factors affecting that industry or sector could affect the value of portfolio securities. For example, manufacturers of consumer goods could be hurt by a rise in unemployment, or technology            companies could be hurt by such factors as market saturation, price competition and rapid obsolescence. An investment in Value Builder Fund is also subject to this risk.

*Credit Risk.*A fund purchasing bonds faces the risk that the creditworthiness of an issuer may decline, causing the value of the bonds to decline. In addition, an issuer may not be able to make timely payments on the interest and/or principal on the bonds it has issued. Because the issuers of high-yield bonds or junk bonds (bonds rated below the fourth            highest category) may be in uncertain financial health, the prices of these bonds may be more vulnerable to bad economic news or even the expectation of bad

 

----

news, than investment-grade bonds. In some cases, bonds, particularly high-yield bonds, may decline in credit quality or go into default. Because Balanced Fund may invest in securities not paying current interest or in securities already in default, these risks may be more pronounced. An investment in Value Builder Fund is also subject to this risk.

*Interest Rate Risk.*Generally, fixed income securities will decrease in value when interest rates rise. The longer the effective maturity of Balanced Fund’s securities, the more sensitive the Fund 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            decline, the issuers of securities held by the Fund may prepay principal earlier than scheduled, forcing the Fund to reinvest in lower-yielding securities. Prepayment may reduce the Fund’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, increasing the Fund’s duration and reducing the value of such a security. Because            Balanced Fund may invest in mortgage-related securities, it is more vulnerable to both of these risks. An investment in Value Builder Fund is subject to similar risk.

*Small Company Capitalization Risk.*Balanced Fund is subject to small company capitalization risk. Small company stocks tend to experience steeper price fluctuations than 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 large companies. Small company stocks are typically less liquid than large company stocks. Accordingly, it may be harder to find buyers for small company shares.

*Foreign Investment Risk.*To the extent Balanced Fund has exposure to companies based outside the US, it faces the risks inherent in foreign investing. Adverse political, economic or social developments could undermine the value of the Fund’s investments or prevent the Fund from realizing their full value. Financial reporting standards for companies            based in foreign markets differ from those in the US. Additionally, foreign securities markets generally are smaller and less liquid than the US markets. These risks tend to be greater in emerging markets so, to the extent the Fund invests in emerging markets, it takes on greater risks. The currency of a country in which the Fund has invested could decline relative to the value of the US dollar, which decreases the value of the investment to US investors. The investments of the Fund            may be subject to foreign withholding taxes. An investment in Value Builder Fund is subject to similar risk.

*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 Balanced Fund may be significant and may exceed the intended level of market exposure for the iGAP strategy.            As noted above, Value Builder Fund does not currently employ the iGAP strategy.

*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 Balanced Fund 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 derivatives transaction could expose the Fund to the effects of leverage, which could increase the Fund’s exposure to the market and magnify potential losses. There is no guarantee that these derivatives, to the extent employed, will have the intended effect, and their use could cause lower returns or even losses to Balanced Fund. The use of derivatives by Balanced Fund to hedge risk            may reduce the opportunity for gain by offsetting the positive effect of favorable price movements. An investment in Value Builder Fund is also subject to this risk.

 

----

*Securities Lending Risk.*Any loss in the market price of securities loaned by Balanced Fund that occurs during the term of the loan would be borne by the Fund and would adversely affect the Fund’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 Balanced Fund’s delegate after a review of relevant facts and circumstances, including the creditworthiness of the borrower. An investment in Value Builder Fund is also subject to this risk.

Other factors that could affect the performance of Balanced Fund include:

|   | **•** | portfolio management could be wrong in the analysis of industries, companies, economic trends, the relative attractiveness of different securities or other matters |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | at times, market conditions might make it hard to value some investments or to get an attractive price for them |
|--------|------------|-----------------------------------------------------------------------------------------------------------------|

|   | **•** | the Advisor measures credit quality at the time it buys securities, using independent rating agencies or, for unrated securities, the Advisor’s own credit quality standards. If a security’s credit quality declines, the Advisor will decide what to do with the security, based on the circumstances and its assessment of what would benefit                            shareholders most. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Performance Information.*The following information provides some indication of the risks of investing in each Fund. Of course, a Fund’s past performance is not an indication of future performance.

The bar charts show how the performance of each Fund’s Class A shares has varied from year to year, which may give some idea of risk. The tables following the charts show how each Fund’s performance compares with one or more broad-based market indices (which, unlike the Funds, do not have any fees or expenses). The tables include the effects of maximum sales loads.            After-tax returns are shown for Class A only and will vary for other classes. After-tax returns are estimates calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown in the table.

 

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**Calendar Year Total Returns (%)**

Balanced Fund – Class A Shares

For the periods included in the bar chart:

 

| **Best Quarter: 12.04%, Q4 1998**                     | **Worst Quarter: -10.01%, Q2 2002** |
|-------------------------------------------------------|-------------------------------------|
| **Year-to-date performance through 9/30/08: -14.59%** |                                |

 

Value Builder Fund – Class A Shares*

For the periods included in the bar chart:

 

| **Best Quarter: 21.03%, Q2 2003**                    | **Worst Quarter: -15.08%, Q3 2001** |
|------------------------------------------------------|-------------------------------------|
| **Year-to-day performance through 9/30/08: -18.66%** |                                |

_________________________

*  In March 2008, the Board of Value Builder Fund approved the termination of Value Builder Fund’s sub-advisory agreement with Alex. Brown Investment Management, and DIMA assumed day-to-day portfolio management responsibilities for Value Builder Fund.

 

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**Average Annual Total Returns**

**(for period ended December** **31, 2007)**

 

|                                                                                              | **Past 1 year** | **Past 5 years** | **Past 10 Years** |
|---------------------------------------------------------------------------------------------------|-----------------|------------------|-------------------|
| **Balanced Fund**                                                                                 |            |             |              |
| Class A                                                                                           |            |             |              |
| Return before Taxes                                                                               | -1.58%          | 6.94%            | 3.57%             |
| Return after Taxes on Distributions                                                               | -2.46           | 6.26             | 2.34              |
| Return after Taxes on Distributions and Sale of Fund Shares                                       | -0.74*          | 5.66             | 2.45*             |
| Class B (Return before Taxes)                                                                     | 1.18            | 7.46             | 3.40              |
| Class C (Return before Taxes)                                                                     | 3.44            | 7.28             | 3.28              |
| Institutional Class (Return before Taxes)                                                         | 4.76            | 8.56             | 4.57              |
| Russell 1000 Index (reflects no deductions for fees, expenses or taxes)                           | 5.77            | 13.43            | 6.20              |
| Russell 2000 Index (reflects no deductions for fees, expenses or taxes)                           | -1.57           | 16.25            | 7.08              |
| Barclays Capital U.S. Aggregate Index (reflects no deductions for fees, expenses or taxes)        | 6.97            | 4.42             | 5.97              |
| MSCI EAFE Index (reflects no deductions for fees, expenses or taxes)                              | 11.17           | 21.59            | 8.66              |
| Credit Suisse High Yield Index (reflects no deductions for fees, expenses or taxes)               | 2.65            | 10.97            | 6.10              |
| Merrill Lynch 3-Month US Treasury Bill Index (reflects no deductions for fees, expenses or taxes) | 5.03            | 3.07             | 3.77              |

 

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Total return would have been lower had certain expenses not been reduced.

Russell 1000® Index is an unmanaged price-only index of the 1,000 largest capitalized companies that are domiciled in the US and whose common stocks are traded.

Russell 2000® Index is an unmanaged capitalization-weighted measure of approximately 2,000 small US stocks.

Barclays Capital U.S. Aggregate Index is an unmanaged market value-weighted measure of Treasury issues, agency issues, corporate bond issues and mortgage securities.

Morgan Stanley Capital International (MSCI) Europe, Australasia and the Far east (EAFE) Index is an unmanaged index that tracks international stock performance in the 21 developed markets of Europe, Australasia and the Far East.

Credit Suisse High Yield Index is an unmanaged trader-priced portfolio, constructed to mirror the global high-yield debt market.

Merrill Lynch 3-Month US Treasury Bill Index is an unmanaged index capturing the performance of a single issue maturing closest to, but not exceeding, three months from the re-balancing date.

| * | Return after Taxes on Distributions and Sale of Fund Shares is higher than other return figures for the same period due to capital losses occurring upon redemption resulting in an assumed tax deduction for shareholders. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

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|                                                                                                      | **Past 1 year** | **Past 5 years** | **Past 10 Years** |
|-----------------------------------------------------------------------------------------------------------|-----------------|------------------|-------------------|
| **Value Builder Fund**                                                                                    |            |             |              |
| Class A                                                                                                   |            |             |              |
| Return before Taxes                                                                                       | -14.15%         | 6.26%            | 4.28%             |
| Return after Taxes on Distributions                                                                       | -18.51          | 4.42             | 2.64              |
| Return after Taxes on Distributions and Sale of Fund Shares                                               | -2.60*          | 5.68*,**         | 3.42*,**          |
| Class B (Return before Taxes)                                                                             | -11.61          | 6.54             | 4.10              |
| Class C (Return before Taxes)                                                                             | -9.59           | 6.71             | 4.14              |
| Institutional Class (Return before Taxes)                                                                 | -8.55           | 7.81             | 5.18              |
| Standard & Poor’s (S&P) 500 Index (reflects no deductions for fees, expenses or taxes) | 5.49            | 12.83            | 5.91              |
| Blended Index 60/35/5 (reflects no deductions for fees, expenses or taxes)                                | 6.27            | 9.30             | 6.06              |
| Russell 1000 Value Index (reflects no deductions for fees, expenses or taxes)                             | -0.17           | 14.63            | 7.68              |
| Blended Index 60/40 (reflects no deductions for fees, expenses or taxes)                                  | 2.72            | 10.11            | 6.87              |

 

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Standard & Poor’s 500 Index (S&P 500) is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Blended Index 60/35/5 is composed of 60% S&P 500 Index,, 35% Barclays Capital Intermediate US Government/Credit Index and 5% Merrill Lynch 3-Month Treasury Bill Index. The Barclays Capital Intermediate US Government/Credit Index is an unmanaged index comprising intermediate- and long-term government and investment-grade corporate debt securities. The Merrill Lynch 3-Month Treasury            Bill Index is representative of the 3-month Treasury market.

Russell 1000® Value Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with less-than-average growth orientation. Russell® 1000 Index is an unmanaged price-only index of the 1,000 largest capitalized companies that are domiciled in the US and whose common stocks are traded.

Blended Index 60/40 is composed of 60% Russell 1000 Value Index and 40% Barclays Capital 1-3 Year Government/Credit Index. The Barclays Capital 1-3 Year Government/Credit Index is an unmanaged index consisting of all US government agency and Treasury securities, as well as all investment-grade corporate debt securities with maturities of one to three years.

| * | Return after Taxes on Distributions and Sale of Fund Shares is higher than other return figures for the same period due to capital losses occurring upon redemption resulting in an assumed tax deduction for shareholders. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ** | The Fund produced a positive total return due to income dividends and net realized gains distributed to the shareholders. Reinvestment of all dividends and distributions is assumed. Had you sold your shares at the period end net asset value you would have recognized a net loss. It is assumed that this loss will be applied against other gains producing a                            positive impact to the total Return after Taxes on Distributions and Sale of Fund Shares. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Current performance may be higher or lower than the performance data quoted above. For more recent performance information, call your financial advisor or 1-800-621-1048 (1-800-730-1313 for Institutional Class shares) or visit our Web site at www.dws-investments.com.

**III.** **OTHER INFORMATION ABOUT THE FUNDS**

*Advisor and Portfolio Manager.*DIMA, with headquarters at 345 Park Avenue, New York, NY 10154, is the investment advisor for each Fund. Under the oversight of the Board of each Fund, DIMA, or a subadvisor, makes investment decisions, buys and sells securities for each Fund and conducts research that leads to these purchase and sale decisions. DIMA            provides a full range of global investment advisory services to institutional and retail clients.

 

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DWS Investments is part of DeAM, which is the marketing name in the U.S. 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 funds, retail, private and commercial            banking, investment banking and insurance.

*Balanced Fund.*The subadvisor for Balanced Fund is Deutsche Asset Management International GmbH (“DeAMI”), Mainzer Landstrasse 178-190, Frankfurt am Main, Germany. DeAMI renders investment advisory and management services to a portion of the Fund’s large cap value allocation. DeAMI is an investment advisor registered with the Securities            and Exchange Commission and currently manages over $60 billion in assets, which is primarily comprised of institutional accounts and investment companies. DeAMI is a subsidiary of Deutsche Bank AG. DIMA compensates DeAMI out of the management fee it receives from the Fund.

Balanced Fund is managed by separate teams of investment professionals who develop and implement each strategy within a particular asset category which together make up the Fund’s overall investment strategy. Each portfolio management team has authority over all aspects of the portfolio of the Fund’s investment portfolio allocated to it, including but not limited to,            purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment and the management of daily cash flows in accordance with portfolio holdings. The following individuals handle the day-to-day management of Balanced Fund:

William Chepolis, CFA, is a Portfolio Manager for Balanced Fund. Mr. Chepolis is a Managing Director of DeAM. He joined DeAM in 1998 after 13 years of experience as vice president and portfolio manager for Norwest Bank, where he managed the bank’s fixed income and foreign exchange portfolios. He began managing Balanced Fund in 2005.

Matthew F. MacDonald is a Portfolio Manager for Balanced Fund. Mr. MacDonald is a Director of DeAM. He joined DeAM and Balanced Fund in 2006 after 14 years of fixed income experience at Bank of America Global Structured Products and PPM America, Inc.

Inna Okounkova is a Portfolio Manager for Balanced Fund. Ms. Okounkova is a Director of DeAM. She joined DeAM in 1999 as a quantitative analyst and became an associate portfolio manager in 2001. She began managing Balanced Fund in 2005.

Gary Sullivan, CFA, is a Portfolio Manager for Balanced Fund. Mr. Sullivan is a Managing Director of DeAM. He joined DeAM in 1996 after four years at Citicorp as a research analyst and structurer of collateralized mortgage obligations. He began managing Balanced Fund in 2006.

Julie M. Van Cleave, CFA, is a Portfolio Manager for Balanced Fund. Ms. Van Cleave is a Managing Director of DeAM. She joined DeAM and Balanced Fund in 2002 after 18 years of investment industry experience at Mason Street Advisors.

Robert Wang is a Portfolio Manager for Balanced Fund. Mr. Wang is a Managing Director of DeAM. He joined DeAM in 1995 after 13 years of experience at J.P. Morgan trading fixed income, derivatives and foreign exchange products. He began managing Balanced Fund in 2005.

 

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Thomas Picciochi is Portfolio Manager of Balanced Fund. Mr. Picciochi is a Director of DeAM. He joined DeAM in 1999 after 13 years of experience at various research and analysis positions at State Street Global Advisors, FPL Energy, Barnett Bank, Trade Finance Corporation and Reserve Financial Management. He began managing Balanced Fund in 2007.

James B. Francis, CFA, is a Portfolio Manager of Balanced Fund. Mr. Francis is a Director of DeAM. He joined DeAM and Balanced Fund in 2008, after 20 years of experience as senior quantitative global equity portfolio manager at State Street Global Advisors and Northern Trust Global Investments.

Julie Abbett is a Portfolio Manager of Balanced Fund. Ms. Abbett is a Director of DeAM. She joined DeAM in 2000 after four years of experience as a consultant with equity trading services for BARRA, Inc. and a product developer for FactSet Research. She began managing Balanced Fund in 2007.

Joseph Axtell, CFA, is a Portfolio Manager for Balanced Fund. Mr. Axtell is a Managing Director of DeAM. He joined DeAM in 2001 after 16 years of investment industry experience, most recently at Merrill Lynch Investment Managers. He began managing Balanced Fund in 2008.

Thomas Schuessler, PhD, is a Portfolio Manager for Balanced Fund. Dr. Schuessler is a Managing Director of DeAM. He joined Deutsche Asset Management in 2001 after five years at Deutsche Bank, and began managing Balanced Fund in 2008.

John Brennan is a Portfolio Manager for Balanced Fund. Mr. Brennan is a Director of DeAM. He joined DeAM and Balanced Fund in 2007 after 14 years of experience at INVESCO and Freddie Mac.

J. Richard Robben, CFA, is a Portfolio Manager for Balanced Fund. Mr. Robben is a Vice President of DeAM. He joined DeAM and Balanced Fund in 2007 after 11 years of experience at INVESCO Institutional.

Michael Sieghart, CFA, is a Consultant to DIMA with respect to Balanced Fund. Mr. Sieghart is a Managing Director of DeAMI. He joined DeAMI in 1997 and began serving as a consultant to DIMA for the Balanced Fund in 2008.

Balanced Fund’s statement of additional information provides additional information about the portfolio managers’ investments in the Fund, a description of the Fund’s compensation structure and information regarding other accounts the portfolio team members manage.

*Value Builder Fund.*While working with a team of investment professionals who collaborate to develop and implement the Fund’s investment strategy, Value Builder Fund’s portfolio manager has authority over all aspects of Value Builder Fund’s investment portfolio, including but not limited to, purchases and sales of individual securities,            portfolio construction techniques, portfolio risk assessment and the management of daily cash flows in accordance with the portfolio holdings. The following individual handles the day-to-day management of Value Builder Fund:

David Hone, CFA, is Lead Portfolio Manager for Value Builder Fund. Mr. Hone is a Director of DeAM. He joined DeAM in 1996 after 8 years of experience as an analysts at Chubb & Son. He began managing Value Builder Fund in 2008.

Value Builder Fund’s statement of additional information provides additional information about the portfolio manager’s investments in the Fund, a description of his compensation structure and information regarding other accounts he manages.

 

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*Distribution and Service Fees.*Pursuant to separate Underwriting and Distribution Services Agreements, DWS Investments Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, an affiliate of DIMA, is the principal underwriter and distributor for the Class A, Class B, Class C and Institutional Class shares of Balanced Fund and Value Builder            Fund, and acts as the agent of each Fund in the continuous offering of its shares. Balanced Fund has adopted distribution and/or service plans on behalf of the Class A, B and C shares in accordance with Rule 12b-1 under the 1940 Act that are substantially identical to the corresponding distribution and/or service plans for Value Builder Fund. The Rule 12b-1 plans allow the Funds to pay distribution and/or service fees for the sale and distribution of their shares and for services            provided to shareholders. Because these fees are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than other types of investments.

Class A shares of each Fund have a 12b-1 plan, under which a shareholder servicing fee of up to 0.25% is deducted from class assets each year. Class B and C shares of each Fund have a 12b-1 plan, under which a distribution fee of 0.75% and a shareholder servicing fee of up to 0.25% are deducted from class assets each year.

*Directors/Trustees and Officers.*The Trustees overseeing Balanced Fund are the same as the Directors who oversee Value Builder Fund: Paul K. Freeman (Chair), John W. Ballantine, Henry P. Becton, Dawn-Marie Driscoll, Keith R. Fox, Kenneth C. Froewiss, Richard J. Herring, William McClayton, Rebecca W. Rimel, Axel Schwarzer, William N. Searcy, Jr.,            Jean Gleason Stromberg and Robert H. Wadsworth. The officers of Balanced Fund are also the same as those of Value Builder Fund.

*Independent Registered Public Accounting Firm (“Auditor”).*Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02116, serves as Balanced Fund’s independent registered public accounting firm. Ernst & Young LLP audits and reports on the Fund’s annual financial statements, reviews certain regulatory reports and the            Fund’s federal income tax returns, and performs other professional accounting, auditing, tax and advisory services when engaged to do so by the Fund. PricewaterhouseCoopers LLP, 125 High Street, Boston, MA 02110 serves as Value Builder Fund’s independent registered public accounting firm, audits the financial statements of the Fund and provides other audit, tax and related services to the Fund.

Charter Documents.

*DWS Balanced Fund.*Balanced Fund is a registered open-end management investment company organized as a business trust under the laws of Massachusetts on October 24, 1985. Effective January 31, 1986, pursuant to a reorganization, the Fund succeeded to the assets and liabilities of Kemper Total Return Fund, Inc., a Maryland corporation organized            in 1963. Effective March 14, 2005, the Fund succeeded to the assets and liabilities of the Scudder Balanced Fund, a Massachusetts business trust. Currently, Class A, Class B, Class C, Class S and Institutional Class shares are offered by Balanced Fund.

*Shares.*The Trustees have the authority to create additional funds and to designate the relative rights and preferences as between the different funds. The Trustees also may authorize the division of shares of the Fund into different classes, which may bear different expenses. All shares issued and outstanding are fully paid and non-assessable,            transferable, have no pre-emptive or conversion rights and are redeemable as described in the SAI and in the Fund’s prospectuses. Each share has equal rights with each other share of the same class of the Fund as to voting, dividends, exchanges, conversion features and liquidation. Shareholders are entitled to one vote for each full share held and fractional votes for fractional shares held. The Trustees may also terminate any fund or class by notice to the shareholders            without shareholder approval.

 

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*Shareholder Meetings.*The Fund generally is not required to hold meetings of its shareholders. 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 by shareholders is required by the            1940 Act; (c) any termination or reorganization of the Fund or a class to the extent and as provided in the Agreement and Declaration of Trust, as amended (the “Declaration of Trust”); (d) certain material amendments of the Declaration of Trust (such as other than amendments changing the name of a Trust, supplying any omission, curing any ambiguity or curing, correcting or supplementing any defective or inconsistent provision thereof); and (e) such            additional matters as may be required by law, the Declaration of Trust, the By-laws of the Fund, or any registration of the Fund with the SEC or as the trustees may consider necessary or desirable. Shareholders also vote upon changes in fundamental investment policies or restrictions.

*Shareholder Liability.*Under Massachusetts law, shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable for obligations of a Trust. The Declaration of Trust, however, disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each            agreement, obligation, or instrument entered into or executed by the Trust or the Trust’s Trustees. Moreover, the Declaration of Trust provide for indemnification out of Trust property for all losses and expenses of any shareholder held personally liable for the obligations of the Fund and the Trust may be covered by insurance. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is considered remote and not material, since it is limited            to circumstances in which a disclaimer is inoperative and such Trust itself is unable to meet its obligations.

If a series were unable to meet its obligations, the assets of all other series may in some circumstances be available to creditors for that purpose, in which case the assets of such other series could be used to meet liabilities which are not otherwise properly chargeable to them.

*Trustee Liability.*The Declaration of Trust for the Trust provides that obligations of the Trust are not binding upon the Trustees individually but only upon the property of the Trust, that the Trustees and officers will not be liable for errors of judgment or mistakes of fact or law, and that the Trust will indemnify its Trustees and officers against            liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices with the Trust except if it is determined in the manner provided in the Declarations of Trust that they have not acted in good faith in the reasonable belief that their actions were in the best interests of the Trust. However, nothing in the Declaration of Trust protects or indemnifies a Trustee or officer against any liability to which he would otherwise be subject            by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office.

*Election and Term of Trustees.*Each Trustee serves until the next meeting of shareholders, if any, called for the purpose of electing Trustees and until the election and qualification of a successor or until such Trustee sooner dies, resigns, retires, is removed or incapacitated. Any Trustee who has become incapacitated by illness or injury as determined            by a majority of the other Trustees may be retired by written instrument, signed by at least a majority of the number of Trustees prior to such removal, specifying the date upon which such removal shall become effective. Any Trustee may be removed with or without cause (i) by the vote of the shareholders holding two-thirds of the outstanding shares, or (ii) by the action of two-thirds of the remaining Trustees. The Trustees shall promptly call a meeting of the shareholders            for the purpose of voting upon the question of removal of any Trustee or Trustees when requested in writing so to do by the holders of not less than ten percent of the outstanding shares, and in that connection, the Trustees will assist shareholder communications to the extent provided for in Section 16(c) under the 1940 Act.

 

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*DWS Value Builder Fund, Inc. (the “Corporation”).*Value Builder Fund is a registered open-end management investment company organized as a corporation under the laws of Maryland on March 5, 1992 under the name Scudder Flag Investors Value Builder Fund. On February 6, 2006, the name of the Scudder Flag Investors Value Builder Fund was            changed to DWS Value Builder Fund. The Fund is currently divided into four classes of shares: Class A, Class B, Class C and Institutional Class.

*Shares.*Each share of the Fund may be subject to such sales loads or charges, expenses and fees, account size requirements, and other rights and provisions, which may be different from any other share of any fund (including shares of the same fund), as the Board of Directors of the corporation may establish or change from time to time. All shares issued            and outstanding are fully paid and non-assessable, transferable, have no pre-emptive rights (except as may be determined by the Board of Directors) or conversion rights (except as described below) and are redeemable as described in the SAI and in the Value Builder Fund’s prospectuses.

Each share has equal rights with each other share of the same class of Value Builder Fund as to voting, dividends, exchanges and liquidation. Shareholders are entitled to one vote for each full share held and fractional votes for fractional shares held. The Directors of Value Builder Fund may also terminate the Fund or any class by notice to the shareholders without shareholder            approval.

The Board of Directors may determine that shares of a fund or a class of a fund shall be automatically converted into shares of another fund of the corporation or of another class of the same or another fund based on the relative net assets of such fund or class at the time of conversion. The Board may also provide that holders of shares of a fund or a class of a fund shall have the            right to convert or exchange their shares into shares of one or more other funds or classes on terms established by the Board.

*Shareholder Meetings.*Value Builder Fund is not required to hold an annual meeting of shareholders in any year in which the election of Directors is not required by the 1940 Act. If a meeting of shareholders of the Fund is required by the 1940 Act to take action on the election of Directors, then an annual meeting shall be held to elect Directors and take            such other action as may come before the meeting. Special meetings of the shareholders of the Fund, for any purpose or purposes, may be called at any time by the Board of Directors or by the President, and shall be called by the President or Secretary at the request in writing of shareholders entitled to cast a majority of the votes entitled to be cast at the meeting. The shareholders also would vote upon changes in fundamental policies or restrictions.

*Shareholder Liability.*Pursuant to Maryland law, shareholders of Value Builder Fund generally have no personal liability for debts or obligations of the Fund as a result of their status as shareholders.

*Director Liability.*The Corporation’s Articles of Amendment and Restatement provide that the Directors of the Corporation, to the fullest extent permitted by the Maryland General Corporation Law and the 1940 Act, shall not be liable to the Corporation or its shareholders for damages. However, nothing in the Articles of Amendment and Restatement, as            amended, or the By-Laws, as amended, protects or indemnifies a Director or officer against any liability to which he or she 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.

*Election and Term of Directors.*Directors of the Fund shall be elected at each annual meeting of shareholders or a special meeting held for that purpose. The term of office of each Director shall be from the time of his or her election until his or her successor shall have been elected and shall have been qualified, or until his or her death, or until he            or she shall have resigned or have been removed or disqualified as provided in the Fund’s By-laws, or as otherwise provided by the 1940 Act, as amended or by the Corporation’s charter. At any meeting of shareholders, duly called and at which a quorum is present, the shareholders may, by the affirmative vote of a majority of all the votes entitled to be cast for

 

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the election of directors, remove any Director from office, with or without cause. The shareholders may elect a successor to fill any resulting vacancy for the balance of the term of the removed Director. The Directors shall promptly call a meeting of the shareholders for the purpose of voting upon the question of removal of any Director or Directors when requested in writing so to do by the holders of            not less than ten percent of the outstanding shares, and in that connection, the Directors will assist shareholder communications to the extent provided for in Section 16(c) under the 1940 Act.

**The foregoing is only a summary of the charter documents of Balanced Fund and Value Builder Fund and is not a complete description of provisions contained in those sources. Shareholders should refer to the provisions of those documents and state law directly for a more thorough description.**

**IV.****INFORMATION ABOUT THE PROPOSED MERGER**

*General.*The shareholders of Value Builder Fund are being asked to approve the merger pursuant to an Agreement and Plan of Reorganization between Value Builder Fund and Balanced Fund (the “Agreement”), the form of which is attached to this Prospectus/Proxy Statement as Exhibit A.

The merger is structured as a transfer of all of the assets of Value Builder Fund to Balanced Fund in exchange for the assumption by Balanced Fund of all the liabilities of Value Builder Fund and for the issuance and delivery of Merger Shares to Value Builder Fund equal in aggregate value to the net value of the assets transferred to Balanced Fund.

After receipt of the Merger Shares, Value Builder Fund will distribute the Merger Shares to its shareholders, in proportion to their existing shareholdings, in complete liquidation of Value Builder Fund, and the legal existence of Value Builder Fund will be terminated. Each shareholder of Value Builder Fund will receive a number of full and fractional Merger Shares of the same            class(es) as, and equal in aggregate value as of the Valuation Time (as defined on page ___) to, the aggregate value of the shareholder’s Value Builder Fund shares.

Prior to the date of the merger, Value Builder Fund will sell all investments that are not consistent with the current investment objective, policies, restrictions and investment strategies of Balanced Fund, if any, and declare a taxable distribution which, together with all previous distributions, will have the effect of distributing to shareholders all of its net investment income            and net realized capital gains, if any, through the date of the merger. DIMA anticipates selling substantially all of Value Builder Fund’s investments in anticipation of the merger. The sale of such investments may increase the taxable distribution to shareholders of Value Builder Fund occurring prior to the merger above that which they would have received absent the merger.

The Directors of Value Builder Fund have voted unanimously to approve the Agreement and the proposed merger and to recommend that shareholders also approve the merger. The actions contemplated by the Agreement and the related matters described therein will be consummated only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of            Value Builder Fund, as defined in the 1940 Act.

In the event that the merger does not receive the required shareholder approval, each Fund will continue to be managed as a separate Fund in accordance with its current investment objective and policies, and the Directors of Value Builder Fund and the Trustees of Balanced Fund may consider such alternatives as may be in the best interests of each Fund.

 

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*Background and Board’s Considerations Relating to the Proposed Merger.*In March 2008, the Board of Value Builder Fund approved the termination of the Value Builder Fund’s sub-advisory agreement with Alex. Brown Investment Management (“ABIM”), and DIMA assumed day-to-day portfolio management responsibilities for the Fund. DeAM            proposed the merger to the Board of Value Builder Fund in September 2008 as part of an ongoing effort to improve the Fund’s investment performance. DeAM advised the Board that a merger of Value Builder Fund into Balanced Fund would provide shareholders with the opportunity to invest in a larger moderate allocation fund with lower management fees and a lower total operating expense ratio.

The Directors of Value Builder Fund conducted a thorough review of the potential implications of the merger on Value Builder Fund’s shareholders. They were assisted in this review by their independent legal counsel. The Directors met on several occasions to review and discuss the merger, both among themselves and with representatives of DeAM.

On November 21, 2008, the Directors of Value Builder Fund, including all Directors who are not “interested persons” (as defined in the 1940 Act) (“Independent Directors”), approved the terms of the proposed merger of Value Builder Fund into Balanced Fund. The Directors have also unanimously determined to recommend that the merger be approved by Value            Builder Fund’s shareholders.

In determining to recommend that the shareholders of Value Builder Fund approve the merger, the Directors considered, among other factors:

|   | **•** | DeAM’s recommendation that the merger with Balanced Fund was the best available alternative for shareholders of Value Builder Fund; |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Similarities and differences between Value Builder Fund’s and Balanced Fund’s investment goals, policies and restrictions, and that the merger would permit the shareholders of Value Builder Fund to pursue similar investment goals in a significantly larger fund; |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The investment advisory fee schedules for Value Builder Fund and Balanced Fund, and, in particular, that the effective advisory fees paid by the combined fund will be lower at all asset levels as compared to the advisory fees paid by Value Builder Fund; |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The operating expense ratio of Value Builder Fund, including a comparison between the expenses of Value Builder Fund and the estimated total operating expense ratios of the combined fund, and, in particular, noted that the total operating expense ratios of Class A, Class B, Class C and Institutional Class shares of the combined fund were expected to be                            lower than the current total operating expense ratios of the corresponding classes of Value Builder Fund; |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | DeAM’s commitment to cap the expenses to be incurred by Value Builder Fund in connection with the merger. More specifically, DeAM has agreed to bear expenses incurred by Value Builder Fund in connection with the merger, including certain incremental trading costs, to the extent such expenses exceed the expected cost savings to be realized by Value                            Builder Fund during the one-year period following the merger (See “Agreement and Plan of Organization” below for additional information regarding this cap); |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The merger would not result in the dilution of the interests of Value Builder Fund shareholders and that the terms and conditions of the Agreement were fair and reasonable; |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Services available to shareholders of Value Builder Fund and Balanced Fund are substantially similar on a class-level basis; |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------|

 

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|   | **•** | The investment performance of Value Builder Fund and Balanced Fund; |
|--------|------------|---------------------------------------------------------------------|

|   | **•** | Prospects for the combined fund to attract additional assets; and |
|--------|------------|-------------------------------------------------------------------|

|   | **•** | The federal income tax consequences of the merger on Value Builder Fund and its shareholders. |
|--------|------------|-----------------------------------------------------------------------------------------------|

Based on all of the foregoing, the Directors concluded that Value Builder Fund’s participation in the merger would be in the best interests of Value Builder Fund and would not dilute the interests of Value Builder Fund’s existing shareholders.**The Board of Directors of Value Builder Fund, including all of the Independent Directors, unanimously            recommends that shareholders of the Fund approve the merger.**

*Agreement and Plan of Reorganization.*The proposed merger will be governed by the Agreement, the form of which is attached as Exhibit A. The Agreement provides that Balanced Fund will acquire all of the assets of Value Builder Fund solely in exchange for the assumption by Balanced Fund of all the liabilities of Value Builder Fund and for the issuance            of Merger Shares equal in value to the value of the transferred assets net of assumed liabilities. The shares will be issued on the next full business day (the “Exchange Date”) following the time as of which the Funds’ shares are valued for determining net asset value for the merger (4:00 p.m. Eastern time, on April 17, 2009, or such other date and time as may be agreed upon by the parties (the “Valuation Time”)). The following discussion of            the Agreement is qualified in its entirety by the full text of the Agreement.

Value Builder Fund will transfer all of its assets to Balanced Fund, and in exchange, Balanced Fund will assume all the liabilities of Value Builder Fund and deliver to Value Builder Fund a number of full and fractional Merger Shares of each class having an aggregate net asset value equal to the value of the assets of Value Builder Fund attributable to shares of the corresponding            class of Value Builder Fund, less the value of the liabilities of Value Builder Fund assumed by Balanced Fund attributable to shares of such class of Value Builder Fund. Immediately following the transfer of assets on the Exchange Date, Value Builder Fund will distribute pro rata to its shareholders of record as of the Valuation Time the full and fractional Merger Shares received by Value Builder Fund, with Merger Shares of each class being distributed to holders of shares of the            corresponding class of Value Builder Fund. As a result of the proposed transaction, each shareholder of Value Builder Fund will receive a number of Merger Shares of each class equal in aggregate value at the Valuation Time to the value of Value Builder Fund shares of the corresponding class surrendered by the shareholder. This distribution will be accomplished by the establishment of accounts on the share records of Balanced Fund in the name of such Value Builder Fund shareholders,            each account representing the respective number of full and fractional Merger Shares of each class due the respective shareholder. New certificates for Merger Shares will not be issued.

The Directors of Value Builder Fund and the Trustees of Balanced Fund have determined that the interests of each Fund’s shareholders will not be diluted as a result of the transactions contemplated by the Agreement, and the Directors of Value Builder Fund and the Trustees of Balanced Fund have determined that the proposed merger is in the best interests of each Fund.

The consummation of the merger is subject to the conditions set forth in the Agreement. The Agreement may be terminated and the merger abandoned (i) by mutual consent of Balanced Fund and Value Builder Fund, (ii) by either party if the merger shall not be consummated by June 20, 2009 or (iii) by either party if the other party shall have materially breached, or            made a material and intentional misrepresentation in or in connection with the Agreement.

If shareholders of Value Builder Fund approve the merger, Value Builder Fund agrees to coordinate its portfolio with Balanced Fund’s portfolio from the date of the Agreement up to and

 

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including the Exchange Date in order that, when the assets of Value Builder Fund are added to the portfolio of Balanced Fund, the resulting portfolio will meet the investment objective, policies, restrictions and strategies of Balanced Fund. DeAM has represented that it expects that substantially all of Value Builder Fund’s holdings will be liquidated prior to the merger and the proceeds            reinvested in other securities so that at the time of the merger, Value Builder Fund’s portfolio will conform more closely to Balanced Fund’s investment objective, policies, restrictions and strategies. DeAM has estimated that transaction costs in connection with the repositioning of Value Builder Fund’s portfolio will be approximately $45,000. DeAM has proposed that Value Builder Fund be responsible for these transaction costs.

All other fees and expenses, including legal and accounting expenses, SEC registration fees, portfolio transfer taxes (if any), and any other expenses incurred in connection with the consummation of the merger and related transactions contemplated by the Agreement will be borne by Value Builder Fund. The one time merger costs are expected to be approximately $107,000, which includes            the cost of proxy solicitation and trading costs. DeAM has agreed to pay the one-time merger costs, including the cost of solicitation, to the extent merger costs exceed the estimated total one-year benefit by Value Builder Fund through the proposed merger. As of October 24, 2008, the estimated one-year benefit to Value Builder Fund is $204,168. The final estimates will be calculated immediately prior to the merger.

*Description of the Merger Shares.*Merger Shares will be issued to Value Builder Fund’s shareholders in accordance with the Agreement as described above. The Merger Shares are Class A, Class B, Class C and Institutional Class shares of Balanced Fund.

Value Builder Fund shareholders receiving Merger Shares will not pay an initial sales charge on such shares. Each class of Merger Shares has the same characteristics as shares of the corresponding class of Value Builder Fund. In other words, your Merger Shares will be treated as having been purchased on the date you purchased your Value Builder Fund shares and for the price you            originally paid. For more information on the characteristics of each class of Merger Shares, please see the applicable Balanced Fund prospectus, a copy of which was mailed with this Prospectus/Proxy Statement.

*Certain Federal Income Tax Consequences.*As a condition to each Fund’s obligation to consummate the reorganization, each Fund will receive a tax opinion from Willkie Farr & Gallagher LLP, special tax counsel (which opinion will be based on certain factual representations of the Funds and certain customary assumptions), to the effect that,            on the basis of the existing provisions of the US Internal Revenue Code of 1986, as amended (the “Code”), current administrative rules and court decisions, for federal income tax purposes:

The acquisition by Balanced Fund of all of the assets of Value Builder Fund solely in exchange for Merger Shares and the assumption by Balanced Fund of all of the liabilities of Value Builder Fund, followed by the distribution by Value Builder Fund to its shareholders of Merger Shares in complete liquidation of Value Builder Fund, all pursuant to the Agreement, constitutes a            reorganization within the meaning of Section 368(a) of the Code, and Value Builder Fund and Balanced Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code.

Under Sections 361 and 357(a) of the Code, Value Builder Fund will not recognize gain or loss upon the transfer of its assets to Balanced Fund in exchange for Merger Shares and the assumption of Value Builder Fund’s liabilities by Balanced Fund, and Value Builder Fund will not recognize gain or loss upon the distribution to its shareholders of the Merger Shares in            liquidation of Value Builder Fund.

Under Section 354 of the Code, shareholders of Value Builder Fund will not recognize gain or loss on the receipt of Merger Shares solely in exchange for Value Builder Fund shares.

 

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Under Section 358 of the Code, the aggregate basis of the Merger Shares received by each shareholder of Value Builder Fund will be the same as the aggregate basis of Value Builder Fund shares exchanged therefor.

Under Section 1223(1) of the Code, the holding period of the Merger Shares received by each Value Builder Fund shareholder will include the holding period of the Value Builder Fund shares exchanged therefor, provided that the Value Builder Fund shareholder held the Value Builder Fund shares at the time of the reorganization as a capital asset.

Under Section 1032 of the Code, Balanced Fund will not recognize gain or loss upon the receipt of the assets of Value Builder Fund in exchange for Merger Shares and the assumption by Balanced Fund of all the liabilities of Value Builder Fund.

Under Section 362(b) of the Code, the basis of the assets of Value Builder Fund transferred to Balanced Fund in the reorganization will be the same in the hands of Balanced Fund as the basis of such assets in the hands of Value Builder Fund immediately prior to the transfer.

Under Section 1223(2) of the Code, the holding periods of the assets of Value Builder Fund transferred to Balanced Fund in the reorganization in the hands of Balanced Fund will include the periods during which such assets were held by Value Builder Fund.

Portfolio assets of Value Builder Fund could be required to be sold in connection with the merger. The tax effect of such sales will depend on the holding periods of such assets and the difference between the price at which such portfolio assets are sold and Value Builder Fund’s basis in such assets. Any net capital gains recognized in these sales, after the application of any            available capital loss carryforwards, will be distributed to Value Builder Fund’s shareholders as capital gain dividends. Any net short-term capital gains (in excess of any net long-term capital loss and after application of any available capital loss carryforwards) will be distributed as ordinary dividends. All such distributions will be made during or with respect to the year of sale and will be taxable to shareholders.

After the merger, the availability of Value Builder Fund’s pre-merger capital losses to offset or defer recognition of capital gains for the benefit of Value Builder Fund shareholders may be reduced. This will be true if Value Builder Fund has substantial realized losses at the time of the merger and Balanced Fund does not. In that case, Value Builder Fund’s losses will            be spread over the larger asset base of the combined fund, causing a decrease for Value Builder Fund shareholders in the amount of losses available to offset future gains.

Also, the combined fund’s ability to use Value Builder Fund’s or Balanced Fund’s pre-merger capital losses may be limited under certain tax rules applicable to mergers of this type. The effect of these potential limitations, however, will depend on a number of factors including the amount of the losses, the amount of gains to be offset, the exact timing of the            merger and the amount of unrealized capital gains in the funds at the time of the merger.

This description of the federal income tax consequences of the merger is made without regard to the particular facts and circumstances of any shareholder. Shareholders are urged to consult their own tax advisors as to the specific consequences to them of the merger, including, without limitation, the applicability and effect of federal, state, local, non-US and other tax            laws.

The portfolio turnover rate for Balanced Fund, i.e., the ratio of the lesser of annual sales or purchases to the monthly average value of the portfolio (excluding from both the numerator and the denominator securities with maturities at the time of acquisition of one year or less), for the period ended April 30, 2008, was 155%. The portfolio turnover rate for Value Builder Fund            for the period ended

 

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September 30, 2008 was 39%. A higher portfolio turnover rate involves greater brokerage and transaction expenses to a fund and may result in the realization of increased net capital gains, including increased net short-term capital gains, which would be taxable to shareholders when distributed (and in the case of net short-term capital gains, would be taxed as ordinary income).

Balanced Fund intends to distribute dividends from its investment company taxable income (computed without regard to any deduction for dividends paid) and realized net capital gains, after utilization of capital loss carryforwards, if any, quarterly. Value Builder Fund’s current policy is also to distribute dividends from its investment company taxable income (computed without            regard to any deduction for dividends paid) and realized net capital gains, after utilization of capital loss carryforwards, if any, quarterly. An additional distribution may be made if necessary. Shareholders of each Fund can have their dividends and distributions automatically invested in additional shares of the same class of that Fund, or a different fund in the same family of funds, at net asset value and credited to the shareholder’s account on the payment date or, at            the shareholder’s election, sent to the shareholder by check. If an investment is in the form of a retirement plan, all dividends and capital gains distributions must be reinvested in the shareholder’s account. If the Agreement is approved by Value Builder Fund’s shareholders, Value Builder Fund will pay its shareholders a distribution of all undistributed investment company taxable income (computed without regard to any deduction for dividends paid) and            undistributed realized net capital gains (after reduction by any capital loss carryforwards) immediately prior to the Closing (as defined in the Agreement).

While as noted above, shareholders are not expected to recognize any gain or loss upon the exchange of their shares in the merger, increases in the Funds’ portfolio turnover rates, net investment income and net realized capital gains, and a potential decrease in capital losses available to offset future gains may result in future taxable distributions to shareholders arising            indirectly from the merger.

*Capitalization.*The following table sets forth the unaudited capitalization of each Fund as of October 31, 2008, and of Balanced Fund on a pro forma combined basis, giving effect to the proposed acquisition of assets at net asset value as of that date.(1)

 

 

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|                      | **Acquiring DWS Balanced Fund** | **Acquired DWS Value Builder Fund** | **Pro Forma Adjustments** | **Pro Forma Combined** |
|---------------------------|---------------------------------|-------------------------------------|---------------------------|------------------------|
| Net Assets                |                            |                                |                      |                   |
| Class A                   | $ 815,130,222                   | $65,858,834                         | (91,608)                  | $ 880,897,448          |
| Class B                   | $ 22,412,262                    | $ 1,632,548                         | (2,271)                   | $ 24,042,539           |
| Class C                   | $ 17,807,215                    | $ 3,668,413                         | (5,103)                   | $ 21,470,525           |
| Class S                   | $ 244,762,630                   | —                             | —                   | $ 244,762,630          |
| Institutional Shares      | $ 269,384                       | $ 5,764,365                         | (8,018)                   | $ 6,025,731            |
| Total Net assets          | $1,100,381,713                  | $76,924,160                         | (107,000)                 | $1,177,198,873         |
| Shares outstanding        |                            |                                |                      |                   |
| Class A                   | 114,631,134                     | 8,649,728                           | 599,066                   | 123,879,928.4          |
| Class B                   | 3,133,766                       | 214,616                             | 13,336                    | 3,361,717.6            |
| Class C                   | 2,509,364                       | 481,577                             | 34,651                    | 3,025,592.2            |
| Investment Class          | —                         | —                             | —                   | —                |
| Class AARP                | —                         | —                             | —                   | —                |
| Class S                   | 34,413,189                      | —                             | —                   | 34,413,188.9           |
| Class R                   | —                         | —                             | —                   | —                |
| Institutional Shares      | 37,848                          | 740,540                             | 68,217                    | 846,604.5              |
| Net Asset Value per share |                            |                                |                      |                   |
| Class A                   | 7.11                            | 7.61                                | —                   | 7.11                   |
| Class B                   | 7.15                            | 7.61                                | —                   | 7.15                   |
| Class C                   | 7.10                            | 7.62                                | —                   | 7.10                   |
| Class S                   | 7.11                            | —                             | —                   | 7.11                   |
| Institutional Shares      | 7.12                            | 7.78                                | —                   | 7.12                   |

 

_______________

| (1) | Assumes the merger had been consummated on October 31, 2008 and is for information purposes only. No assurance can be given as to how many shares of Balanced Fund will be received by the shareholders of Value Builder Fund on the date the merger takes place, and the foregoing should not be relied upon to reflect the number of shares of Balanced Fund                            that actually will be received on or after such date. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Pro Forma adjustments include estimated one time merger costs of $107,000, which are to be borne by Value Builder Fund. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

**The Directors of Value Builder Fund, a majority of whom are independent Directors, unanimously recommend approval of the merger.**

**V.**  **INFORMATION ABOUT VOTING AT THE SHAREHOLDER MEETING**

*General.*This Prospectus/Proxy Statement is furnished in connection with the proposed merger of Value Builder Fund into Balanced Fund and the solicitation of proxies by and on behalf of the Directors of Value Builder Fund for use at the Special Meeting of Value Builder Fund Shareholders (the “Meeting”). The Meeting is to be held on            March 27, 2009 at 3:30pm Eastern time at the offices of DIMA, 345 Park Avenue, 27th Floor, New York, New York 10154, or at such later time as is made necessary by adjournment or postponement. The Notice of the Special Meeting of Shareholders, the Prospectus/Proxy Statement and the enclosed form of proxy are being mailed to shareholders on or about ____________, 2009.

As of January 6, 2009, Value Builder Fund had the following shares outstanding:

 

| **Share Class** | **Number of Shares** |
|-----------------|----------------------|
| Class A         |                 |

 

 

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| Class B             |   |
|---------------------|--------|
| Class C             |   |
| Institutional Class |   |

 

Only shareholders of record on January 6, 2009 will be entitled to notice of and to vote at the Meeting. Each share is entitled to one vote, with fractional shares voting proportionally.

The Directors of Value Builder Fund know of no matters other than those set forth herein to be brought before the Meeting. If, however, any other matters properly come before the Meeting, it is the Directors’ intention that proxies will be voted on such matters in accordance with the judgment of the persons named in the enclosed form of proxy.

*Required Vote.*Proxies are being solicited from Value Builder Fund’s shareholders by the Directors of Value Builder Fund for the Meeting. Unless revoked, all valid proxies will be voted in accordance with the specification thereon or, in the absence of specification, FOR approval of the Agreement. The transactions contemplated by the Agreement will            be consummated only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of Value Builder Fund as defined in the 1940 Act as (A) 67% or more of the voting securities of Value Builder Fund present at the meeting, if the holders of more than 50% of the outstanding voting securities of Value Builder Fund are present or represented by proxy; or (B) more than 50% of the outstanding voting securities of Value Builder Fund,            whichever is less.

*Record Date, Quorum and Method of Tabulation.*Shareholders of record of Value Builder Fund at the close of business on January 6, 2009 (the “Record Date”) will be entitled to vote at the Meeting or any adjournment thereof. [The holders of at least one-third of the shares of Value Builder Fund outstanding at the close of business on the            Record Date present in person or represented by proxy will constitute a quorum for the Meeting.]

Votes cast by proxy or in person at the Meeting will be counted by persons appointed by Value Builder Fund as tellers for the Meeting. The tellers will count the total number of votes cast “FOR” approval of the proposal for purposes of determining whether sufficient affirmative votes have been cast. The tellers will count shares represented by proxies that reflect            abstentions and “broker non-votes” (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or the persons entitled to vote, and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum. Abstentions and broker non-votes will therefore have the            effect of a negative vote on the proposal.

*Share Ownership.*As of January 6, 2009, the officers and Directors of Value Builder Fund as a group beneficially owned [less than 1% of the outstanding shares] of Value Builder Fund and the officers and Trustees of Balanced Fund as a group beneficially owned [less than 1% of the outstanding shares] of Balanced Fund. To the best of the knowledge of            Value Builder Fund, the following shareholders owned of record or beneficially 5% or more of the outstanding shares of any class of Value Builder Fund as of such date:

 

| **Class** | **Shareholder Name and Address** | **Percentage Owned** |
|-----------|----------------------------------|----------------------|
|      |                             |                 |
|      |                             |                 |
|      |                             |                 |

 

 

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To the best of the knowledge of Balanced Fund, the following shareholders owned of record or beneficially 5% or more of the outstanding shares of any class of Balanced Fund as of January 6, 2009:

 

| **Class** | **Shareholder Name and Address** | **Percentage Owned** |
|-----------|----------------------------------|----------------------|
|      |                             |                 |
|      |                             |                 |
|      |                             |                 |

 

*Solicitation of Proxies.*In addition to soliciting proxies by mail, certain officers and representatives of Value Builder Fund, officers and employees of the Advisor and certain financial services firms and their representatives, who will receive no extra compensation for their services, may solicit proxies by telephone, telegram or personally.

All properly executed proxies received in time for the Meeting will be voted as specified in the proxy or, if no specification is made, in favor of the proposal.

Computershare Fund Services, Inc. (“Computershare”) has been engaged to assist in the solicitation of proxies, at an estimated cost of $ _________. As the Meeting date approaches, certain shareholders of Value Builder Fund may receive a telephone call from a representative of Computershare if their votes have not yet been received. Authorization to permit Computershare to            execute proxies may be obtained by telephonic or electronically transmitted instructions from shareholders of Value Builder Fund. Proxies that are obtained telephonically or through the Internet will be recorded in accordance with the procedures described below. The Directors believe that these procedures are reasonably designed to ensure that both the identity of the shareholder casting the vote and the voting instructions of the shareholder are accurately determined.

In all cases where a telephonic proxy is solicited, the Computershare representative is required to ask for each shareholder’s full name and address, or the zip code, or both, and to confirm that the shareholder has received the proxy materials in the mail. If the shareholder is a corporation or other entity, the Computershare representative is required to ask for the            person’s title and confirmation that the person is authorized to direct the voting of the shares. If the information solicited agrees with the information provided to Computershare, then the Computershare representative has the responsibility to explain the process, read the proposal on the proxy card, and ask for the shareholder’s instructions on the proposal. Although the Computershare representative is permitted to answer questions about the process, he or she is not            permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in the Prospectus/Proxy Statement. Computershare will record the shareholder’s instructions on the card. Within 72 hours, the shareholder will be sent a letter or mailgram to confirm his or her vote and asking the shareholder to call Computershare immediately if his or her instructions are not correctly reflected in the confirmation.

Please see the instructions on your proxy card for telephone touch-tone voting and Internet voting. Shareholders will have an opportunity to review their voting instructions and make any necessary changes before submitting their voting instructions and terminating their telephone call or Internet link. Shareholders who vote via the Internet, in addition to confirming their voting            instructions prior to submission, will also receive an e-mail confirming their instructions upon request.

If a shareholder wishes to participate in the Meeting, but does not wish to give a proxy by telephone or electronically, the shareholder may still submit the proxy card originally sent with the Prospectus/Proxy Statement or attend in person. Should shareholders require additional information regarding the proxy or replacement proxy card, they may contact Computershare toll-free at            1-866-774-4940. Any proxy given by a shareholder is revocable until voted at the Meeting.

 

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Persons holding shares as nominees will, upon request, be reimbursed for their reasonable expenses in soliciting instructions from their principals. The cost of preparing, printing and mailing the enclosed proxy card and Prospectus/Proxy Statement, and all other costs incurred in connection with the solicitation of proxies for Value Builder Fund, including any additional solicitation            made by letter, telephone or telegraph, will be paid by Value Builder Fund (subject to the cap described above).

*Revocation of Proxies.*Proxies, including proxies given by telephone or over the Internet, may be revoked at any time before they are voted either (i) by a written revocation received by the Secretary of the Fund at One Beacon Street, Boston, MA 02108, (ii) by properly submitting a later-dated proxy that is received by the Fund at or prior to            the Meeting or (iii) by attending the Meeting and voting in person. Merely attending the Meeting without voting, however, will not revoke a previously submitted proxy.

*Adjournment and Postponement.*Whether or not a quorum is present, the Meeting may, by action of the chairman of the Meeting, be adjourned from time to time without notice with respect to the proposal to be considered at the Meeting to a designated time, not more than 120 days after the Record Date. In addition, upon motion of the chairman of the Meeting,            the question of adjournment may be submitted to a vote of the shareholders and any adjournment must be approved by the vote of the holders of a majority of the shares present and entitled to vote with respect to the proposal without further notice. Unless a proxy is otherwise limited in this regard, any shares present and entitled to vote at the Meeting that are represented by broker non-votes, may, at the discretion of the proxies, be voted in favor of such adjournment. The Board            of Directors may postpone the Meeting of shareholders prior to the Meeting with notice to the shareholders entitled to vote at or to receive notice of the Meeting.

 

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**EXHIBIT** **A**

**FORM OF AGREEMENT AND PLAN OF REORGANIZATION**

THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made as of this ____ day of _____, 200__, by and among DWS Balanced Fund (the “Acquiring Trust”), a Massachusetts business trust, on behalf of DWS Balanced Fund (the “Acquiring Fund”), a separate series of the Acquiring Trust; DWS Value Builder Fund, Inc. (the “Acquired            Fund”), a Maryland corporation (the Acquired Fund, together with the Acquiring Fund, each a “Fund” and collectively the “Funds”); and Deutsche Investment Management Americas Inc. (“DIMA”), investment adviser to the Funds (for purposes of section 10.2 of the Agreement only). The principal place of business of the Acquiring Trust and the Acquired Fund is 345 Park Avenue, New York, New York 10154.

This Agreement is intended to be and is adopted as a plan of reorganization and liquidation within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). The reorganization (the “Reorganization”) will consist of the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in exchange solely for Class            A, Class B, Class C and Institutional Class voting shares of beneficial interest (without par value) of the Acquiring Fund (the “Acquiring Fund Shares”), the assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund and the distribution of the Acquiring Fund Shares to the Class A, Class B, Class C and Institutional Class shareholders of the Acquired Fund in complete liquidation and termination of the Acquired Fund as provided herein, all upon the            terms and conditions hereinafter set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows:

| 1. | **Transfer of Assets of the Acquired Fund to the Acquiring Fund in Consideration for Acquiring Fund Shares, the Assumption of All Acquired Fund Liabilities and the Liquidation of the Acquired Fund** |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

1.1       Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund agrees to transfer to the Acquiring Fund all of the Acquired Fund’s assets as set forth in section 1.2, and the Acquiring Fund agrees in consideration therefor (i) to deliver to the            Acquired Fund that number of full and fractional Class A, Class B, Class C and Institutional Class Acquiring Fund Shares determined by dividing the value of the Acquired Fund’s assets net of any liabilities of the Acquired Fund with respect to the Class A, Class B, Class C and Institutional Class shares of the Acquired Fund, computed in the manner and as of the time and date set forth in section 2.1, by the net asset value of one Acquiring Fund Share of the corresponding            class, computed in the manner and as of the time and date set forth in section 2.2; and (ii) to assume all of the liabilities of the Acquired Fund, including, but not limited to, any deferred compensation to the Acquired Fund’s directors. All Acquiring Fund Shares delivered to the Acquired Fund shall be delivered at net asset value without a sales load, commission or other similar fee being imposed. Such transactions shall take place at the closing provided for in section            3.1 (the “Closing”).

1.2       The assets of the Acquired Fund to be acquired by the Acquiring Fund (the “Assets”) shall consist of all assets, including, without limitation, all cash, cash equivalents, securities, commodities and futures contracts and dividends or interest or other receivables that are owned by the Acquired Fund and any deferred or prepaid            expenses shown on the unaudited statement of assets and liabilities of the Acquired Fund prepared as of the effective time of the Closing in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applied consistently with those of the Acquired Fund’s most recent audited statement of assets and liabilities. The Assets shall constitute at least 90% of the fair market value of the net assets, and at least 70% of the fair            market value of the gross

 

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assets, held by the Acquired Fund immediately before the Closing (excluding for these purposes assets used to pay the dividends and other distributions paid pursuant to section 1.4).

1.3       The Acquired Fund will endeavor, to the extent practicable, to discharge all of its liabilities and obligations that are accrued prior to the Closing Date as defined in section 3.1.

1.4       On or as soon as practicable prior to the Closing Date as defined in section 3.1, the Acquired Fund will declare and pay to its shareholders of record one or more dividends and/or other distributions so that it will have distributed substantially all of its investment company taxable income (computed without regard to any deduction for            dividends paid) and realized net capital gain, if any, for the current taxable year through the Closing Date.

1.5       Immediately after the transfer of Assets provided for in section 1.1, the Acquired Fund will distribute to the Acquired Fund’s shareholders of record with respect to each class of its shares (the “Acquired Fund Shareholders”), determined as of the Valuation Time (as defined in section 2.1), on a pro rata basis within that            class, the Acquiring Fund Shares of the same class received by the Acquired Fund pursuant to section 1.1 and will completely liquidate. Such distribution and liquidation will be accomplished with respect to each class of the Acquired Fund by the transfer of the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund in the names of the Acquired Fund Shareholders. The            Acquiring Fund shall have no obligation to inquire as to the validity, propriety or correctness of such records, but shall assume that such transaction is valid, proper and correct. The aggregate net asset value of Class A, Class B, Class C and Institutional Class Acquiring Fund Shares to be so credited to the Class A, Class B, Class C and Institutional Class Acquired Fund Shareholders shall, with respect to each class, be equal to the aggregate net asset value of the Acquired Fund            shares of the same class owned by such shareholders as of the Valuation Time. All issued and outstanding shares of the Acquired Fund will simultaneously be cancelled on the books of the Acquired Fund, although share certificates representing interests in Class A, Class B, Class C and Institutional Class shares of the Acquired Fund, if any, will represent a number of Acquiring Fund Shares after the Closing Date as determined in accordance with section 2.3. The Acquiring Fund will not            issue certificates representing Acquiring Fund Shares.

1.6       Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund. Shares of the Acquiring Fund will be issued in the manner described in the Acquiring Fund’s then-current prospectuses and statement of additional information for Class A, Class B, Class C and Institutional Class shares.

1.7       Any reporting responsibility of the Acquired Fund including, without limitation, the responsibility for filing of regulatory reports, tax returns or other documents with the Securities and Exchange Commission (the “Commission”), any state securities commission and any federal, state or local tax authorities or any other            relevant regulatory authority, is and shall remain the responsibility of the Acquired Fund.

1.8       All books and records of the Acquired Fund, including all books and records required to be maintained under the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules and regulations thereunder, shall be available to the Acquiring Fund from and after the Closing Date and shall be turned over to the Acquiring            Fund as soon as practicable following the Closing Date.

| 2. | **Valuation** |
|----|---------------|

2.1       The value of the Assets and liabilities of the Acquired Fund shall be computed as of the close of regular trading on The New York Stock Exchange, Inc. (the “NYSE”) on the business day immediately preceding the Closing Date, as defined in section 3.1 (the “Valuation Time”) after the

 

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declaration and payment of any dividends and/or other distributions on that date, using the valuation procedures set forth in the Acquiring Trust’s Amended and Restated Declaration of Trust and the Acquiring Fund’s then-current prospectuses or statement of additional information for Class A, Class B, Class C and Institutional Class shares, copies of which have been delivered to the Acquired            Fund.

2.2       The net asset value of a Class A, Class B, Class C and Institutional Class Acquiring Fund Share shall be the net asset value per share computed with respect to that class as of the Valuation Time using the valuation procedures referred to in section 2.1.

2.3       The number of Class A, Class B, Class C and Institutional Class Acquiring Fund Shares to be issued (including fractional shares, if any) in consideration for the Assets shall be determined with respect to each such class by dividing the value of the Assets net of liabilities with respect to Class A, Class B, Class C and Institutional Class            shares of the Acquired Fund, as the case may be, determined in accordance with section 2.1 by the net asset value of an Acquiring Fund Share of the same class determined in accordance with section 2.2.

2.4       All computations of value hereunder shall be made by or under the direction of each Fund’s respective accounting agent, if applicable, in accordance with its regular practice and the requirements of the 1940 Act and shall be subject to confirmation by such Fund’s respective Independent Registered Public Accounting Firm upon the            reasonable request of the other Fund.

| 3. | **Closing and Closing Date** |
|----|------------------------------|

3.1       The Closing of the transactions contemplated by this Agreement shall be April 20, 2009, 2009, or such later date as the parties may agree in writing (the “Closing Date”). All acts taking place at the Closing shall be deemed to take place simultaneously as of 9:00 a.m., Eastern time, on the Closing Date, unless            otherwise agreed to by the parties. The Closing shall be held at the offices of counsel to the Acquiring Fund, or at such other place and time as the parties may agree.

3.2       The Acquired Fund shall deliver to the Acquiring Fund on the Closing Date a schedule of Assets.

3.3       State Street Bank and Trust Company (“SSB”), custodian for the Acquired Fund, shall deliver at the Closing a certificate of an authorized officer stating that (a) the Assets shall have been delivered in proper form to SSB, also the custodian for the Acquiring Fund, prior to or on the Closing Date and (b) all necessary            taxes in connection with the delivery of the Assets, including all applicable federal and state stock transfer stamps, if any, have been paid or provision for payment has been made. The Acquired Fund’s portfolio securities represented by a certificate or other written instrument shall be presented by the custodian for the Acquired Fund to the custodian for the Acquiring Fund for examination no later than five business days preceding the Closing Date and transferred and            delivered by the Acquired Fund as of the Closing Date by the Acquired Fund for the account of Acquiring Fund duly endorsed in proper form for transfer in such condition as to constitute good delivery thereof. The Acquired Fund’s portfolio securities and instruments deposited with a securities depository, as defined in Rule 17f-4 under the 1940 Act, shall be delivered as of the Closing Date by book entry in accordance with the customary practices of such depositories and the            custodian for the Acquiring Fund. The cash to be transferred by the Acquired Fund shall be delivered by wire transfer of federal funds on the Closing Date.

3.4       DWS Investments Service Company (“DISC”), as transfer agent for the Acquired Fund shall deliver at the Closing a certificate of an authorized officer stating that its records contain the names and addresses of the Acquired Fund Shareholders and the number and percentage ownership (to three decimal places) of outstanding Class            A, Class B, Class C and Institutional Class Acquired Fund shares owned by each such shareholder immediately prior to the Closing. The Acquiring Fund shall issue and

 

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deliver a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date to the Acquired Fund or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund’s account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, share            certificates, if any, receipts or other documents as such other party or its counsel may reasonably request to effect the transactions contemplated by this Agreement.

3.5       In the event that immediately prior to the Valuation Time (a) the NYSE or another primary trading market for portfolio securities of the Acquiring Fund or the Acquired Fund shall be closed to trading or trading thereupon shall be restricted, or (b) trading or the reporting of trading on the NYSE or elsewhere shall be disrupted so            that, in the judgment of the Board of Trustees/Directors (each a “Board”) of either party to this Agreement, accurate appraisal of the value of the net assets with respect to the Class A, Class B, Class C and Institutional Class shares of the Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored.

3.6       The liabilities of the Acquired Fund shall include all of the Acquired Fund’s liabilities, debts, obligations, and duties of whatever kind or nature, whether absolute, accrued, contingent, or otherwise, whether or not arising in the ordinary course of business, whether or not determinable at the Closing Date, and whether or not            specifically referred to in this Agreement, including but not limited to, any deferred compensation to the Acquired Fund’s directors.

| 4. | **Representations and Warranties** |
|----|------------------------------------|

|   | 4.1 | The Acquired Fund represents and warrants to the Acquiring Fund as follows: |
|--------|-----|-----------------------------------------------------------------------------|

(a)        The Acquired Fund is a Maryland corporation duly organized and validly existing under the laws of the State of Maryland with power under the Acquired Fund’s Articles of Amendment and Restatement to own all of its properties and assets and to carry on its business as it is now being conducted and, subject to approval of            shareholders of the Acquired Fund, to carry out the Agreement. The Acquired Fund is duly designated in accordance with the applicable provisions of the Acquired Fund’s Articles of Amendment and Restatement. The Acquired Fund is qualified to do business in all jurisdictions in which it is required to be so qualified, except jurisdictions in which the failure to so qualify would not have a material adverse effect on the Acquired Fund. The Acquired Fund has all material federal,            state and local authorizations necessary to own all of the properties and assets and to carry on its business as now being conducted, except authorizations which the failure to so obtain would not have a material adverse effect on the Acquired Fund;

(b)       The Acquired Fund is registered with the Commission as an open-end management investment company under the 1940 Act, and such registration is in full force and effect and the Acquired Fund is in compliance in all material respects with the 1940 Act and the rules and regulations thereunder;

(c)        No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by the Acquired Fund of the transactions contemplated herein, except such as have been obtained under the Securities Act of 1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934, as amended            (the “1934 Act”), and the 1940 Act and such as may be required by state securities laws;

(d)       The Acquired Fund is not, and the execution, delivery and performance of this Agreement by the Acquired Fund will not result (i) in violation of Maryland law or of the Acquired Fund’s Articles of Amendment and Restatement, or By-Laws, as amended, (ii) in a violation or breach of,

 

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or constitute a default under, any material agreement, indenture, instrument, contract, lease or other undertaking to which the Acquired Fund is a party or by which it is bound, and the execution, delivery and performance of this Agreement by the Acquired Fund will not result in the acceleration of any obligation, or the imposition of any penalty, under any agreement, indenture, instrument, contract,            lease, judgment or decree to which the Acquired Fund is a party or by which it is bound, or (iii) in the creation or imposition of any lien, charge or encumbrance on any property or assets of the Acquired Fund;

(e)        No material litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquired Fund or any properties or assets held by it. The Acquired Fund knows of no facts which might form the basis for the institution of such proceedings            which would materially and adversely affect its business, other than as disclosed in the foregoing schedule, and is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially and adversely affects its business or its ability to consummate the transactions herein contemplated;

(f)        The Statements of Assets and Liabilities, Operations, and Changes in Net Assets, the Financial Highlights, and the Investment Portfolio of the Acquired Fund at and for the fiscal year ended March 31, 2008, have been audited by PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, and are in accordance with            GAAP consistently applied, and such statements (a copy of each of which has been furnished to the Acquiring Fund) present fairly, in all material respects, the financial position of the Acquired Fund as of such date in accordance with GAAP and there are no known contingent liabilities of the Acquired Fund required to be reflected on a statement of assets and liabilities (including the notes thereto) in accordance with GAAP as of such date not disclosed therein;

(g)       Since March 31, 2008, there has not been any material adverse change in the Acquired Fund’s financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business, or any incurrence by the Acquired Fund of indebtedness maturing more than one year from the date such indebtedness was            incurred except as otherwise disclosed to and accepted in writing by the Acquiring Fund. For purposes of this subsection (g), a decline in net asset value per share of the Acquired Fund due to declines in market values of securities in the Acquired Fund’s portfolio, the discharge of Acquired Fund liabilities, or the redemption of Acquired Fund shares by Acquired Fund Shareholders shall not constitute a material adverse change;

(h)       At the date hereof and at the Closing Date, all federal and other tax returns and reports of the Acquired Fund required by law to have been filed by such dates (including any extensions) shall have been filed and are or will be correct in all material respects, and all federal and other taxes shown as due or required to be shown as due on            said returns and reports shall have been paid or provision shall have been made for the payment thereof, and, to the best of the Acquired Fund’s knowledge, no such return is currently under audit and no assessment has been asserted with respect to such returns;

(i)        For each taxable year of its operation (including the taxable year ending on the Closing Date), the Acquired Fund has met the requirements of Subchapter M of the Code for qualification as a regulated investment company and has elected to be treated as such, has been eligible to compute and has computed its federal income tax under            Section 852 of the Code, and will have distributed all of its investment company taxable income (determined without regard to the deduction of dividends paid) and net capital gain (as such terms are defined in the Code) that has accrued through the Closing Date;

(j)        All issued and outstanding shares of the Acquired Fund (i) have been offered and sold in every state and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws, (ii) are, and on the Closing Date will be, duly and validly issued and            outstanding, fully paid and non-assessable and not subject to preemptive or dissenter’s rights and (iii) will be held at the time of the Closing by the persons and in the amounts set

 

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forth in the records of DISC, as provided in section 3.4. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any of the Acquired Fund shares, nor is there outstanding any security convertible into any of the Acquired Fund shares;

(k)       At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Fund’s assets to be transferred to the Acquiring Fund pursuant to section 1.1 and full right, power, and authority to sell, assign, transfer and deliver such assets hereunder free of any liens or other encumbrances, except those liens or            encumbrances as to which the Acquiring Fund has received notice at or prior to the Closing, and upon delivery and payment for such assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, including such restrictions as might arise under the 1933 Act and the 1940 Act, except those restrictions as to which the Acquiring Fund has received notice and necessary documentation at or prior to the Closing;

(l)        The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action on the part of the Board members of the Acquired Fund (including the determinations required by Rule 17a-8(a) under the 1940 Act), and, subject to the approval of the Acquired Fund Shareholders,            this Agreement constitutes a valid and binding obligation of the Acquired Fund enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws relating to or affecting creditors’ rights and to general equity principles;

(m)      The information to be furnished by the Acquired Fund for use in applications for orders, registration statements or proxy materials or for use in any other document filed or to be filed with any federal, state or local regulatory authority (including the Financial Industry Regulatory Authority (“FINRA”)), which may be necessary in            connection with the transactions contemplated hereby, shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto;

(n)       The current prospectuses and statement of additional information of the Acquired Fund conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and do not include any untrue statement of a material fact or omit to state any material fact            required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading; and

(o)       The Registration Statement referred to in section 5.7, only insofar as it relates to the Acquired Fund, will, on the effective date of the Registration Statement and on the Closing Date, (i) comply in all material respects with the provisions and regulations of the 1933 Act, the 1934 Act and the 1940 Act, as applicable, and            (ii) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements are made, not materially misleading; provided, however, that the representations and warranties in this section shall not apply to statements in or omissions from the Registration Statement made in reliance upon and in conformity with information that was            furnished or should have been furnished by the Acquiring Fund for use therein.

4.2       The Acquiring Trust, on behalf of the Acquiring Fund, represents and warrants to the Acquired Fund as follows:

(a)        The Acquiring Trust is a voluntary association with transferable shares commonly referred to as a Massachusetts business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts with power under the Acquiring Trust’s Amended and Restated Declaration of Trust to own all of its properties and            assets and to carry on its business as it is

 

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now being conducted and to carry out the Agreement. The Acquiring Fund is a separate series of the Acquiring Trust duly designated in accordance with the applicable provisions of the Acquiring Trust’s Amended and Restated Declaration of Trust. The Acquiring Trust and Acquiring Fund are qualified to do business in all jurisdictions in which they are required to be so qualified, except jurisdictions            in which the failure to so qualify would not have a material adverse effect on the Acquiring Trust or Acquiring Fund. The Acquiring Fund has all material federal, state and local authorizations necessary to own all of the properties and assets and to carry on its business as now being conducted, except authorizations which the failure to so obtain would not have a material adverse effect on the Acquiring Fund;

(b)       The Acquiring Trust is registered with the Commission as an open-end management investment company under the 1940 Act, and such registration is in full force and effect and the Acquiring Fund is in compliance in all material respects with the 1940 Act and the rules and regulations thereunder;

(c)        No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by the Acquiring Fund of the transactions contemplated herein, except such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state securities laws;

(d)       The Acquiring Trust is not, and the execution, delivery and performance of this Agreement by the Acquiring Trust will not result (i) in violation of Massachusetts law or of the Acquiring Trust’s Amended and Restated Declaration of Trust or By-Laws, (ii) in a violation or breach of, or constitute a default under, any material            agreement, indenture, instrument, contract, lease or other undertaking known to counsel to which the Acquiring Fund is a party or by which it is bound, and the execution, delivery and performance of this Agreement by the Acquiring Fund will not result in the acceleration of any obligation, or the imposition of any penalty, under any agreement, indenture, instrument, contract, lease, judgment or decree to which the Acquiring Fund is a party or by which it is bound, or (iii) in            the creation or imposition of any lien, charge or encumbrance on any property or assets of the Acquiring Fund;

(e)        No material litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquiring Fund or any properties or assets held by it. The Acquiring Fund knows of no facts which might form the basis for the institution of such proceedings            which would materially and adversely affect its business, other than as disclosed in the foregoing schedule, and is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially and adversely affects its business or its ability to consummate the transactions herein contemplated;

(f)        The Statements of Assets and Liabilities, Operations, and Changes in Net Assets, the Financial Highlights, and the Investment Portfolio of the Acquiring Fund at and for the fiscal year ended October 31, 2008, have been audited by Ernst & Young LLP, Independent Registered Public Accounting Firm, and are in accordance with            GAAP consistently applied, and such statements (a copy of each of which has been furnished to the Acquired Fund) present fairly, in all material respects, the financial position of the Acquiring Fund as of such date in accordance with GAAP, and there are no known contingent liabilities of the Acquiring Fund required to be reflected on a statement of assets and liabilities (including the notes thereto) in accordance with GAAP as of such date not disclosed therein;

(g)       Since October 31, 2008, there has not been any material adverse change in the Acquiring Fund’s financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business, or any incurrence by the Acquiring Fund of indebtedness maturing more than one year from the date such indebtedness was            incurred except as otherwise disclosed to and accepted in writing by the Acquired Fund. For purposes of this subsection (g), a decline in net asset value per share

 

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of the Acquiring Fund due to declines in market values of securities in the Acquiring Fund’s portfolio, the discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund shares by Acquiring Fund shareholders shall not constitute a material adverse change;

(h)       At the date hereof and at the Closing Date, all federal and other tax returns and reports of the Acquiring Fund required by law to have been filed by such dates (including any extensions) shall have been filed and are or will be correct in all material respects, and all federal and other taxes shown as due or required to be shown as due on            said returns and reports shall have been paid or provision shall have been made for the payment thereof, and, to the best of the Acquiring Fund’s knowledge, no such return is currently under audit and no assessment has been asserted with respect to such returns;

(i)        For each taxable year of its operation, the Acquiring Fund has met the requirements of Subchapter M of the Code for qualification as a regulated investment company and has elected to be treated as such, has been eligible to compute and has computed its federal income tax under Section 852 of the Code, and will do so for the            taxable year including the Closing Date;

(j)        All issued and outstanding shares of the Acquiring Fund (i) have been offered and sold in every state and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws and (ii) are, and on the Closing Date will be, duly and validly issued            and outstanding, fully paid and non-assessable, and not subject to preemptive or dissenter’s rights. The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any of the Acquiring Fund Shares, nor is there outstanding any security convertible into any of the Acquiring Fund Shares;

(k)       The Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant to the terms of this Agreement, will at the Closing Date have been duly authorized and, when so issued and delivered, will be duly and validly issued and outstanding Acquiring Fund Shares, and will be fully            paid and non-assessable.

(l)        At the Closing Date, the Acquiring Fund will have good and marketable title to the Acquiring Fund’s assets, free of any liens or other encumbrances, except those liens or encumbrances as to which the Acquired Fund has received notice at or prior to the Closing;

(m)      The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action on the part of the Board members of the Acquiring Trust (including the determinations required by Rule 17a-8(a) under the 1940 Act) and this Agreement will constitute a valid and binding obligation of the            Acquiring Trust, on behalf of the Acquiring Fund, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws relating to or affecting creditors’ rights and to general equity principles;

(n)       The information to be furnished by the Acquiring Fund for use in applications for orders, registration statements or proxy materials or for use in any other document filed or to be filed with any federal, state or local regulatory authority (including FINRA), which may be necessary in connection with the transactions contemplated hereby,            shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto;

(o)       The current prospectuses and statement of additional information of the Acquiring Fund with respect to Class A, Class B, Class C and Institutional Class shares conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and do not include any            untrue statement of a material fact or

 

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omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading;

(p)       The Registration Statement referred to in section 5.7, only insofar as it relates to the Acquiring Fund, will, on the effective date of the Registration Statement and on the Closing Date, (i) comply in all material respects with the provisions and regulations of the 1933 Act, the 1934 Act, and the 1940 Act, as applicable and            (ii) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not materially misleading; provided, however, that the representations and warranties in this section shall not apply to statements in or omissions from the Registration Statement made in reliance upon and in conformity with information that was            furnished or should have been furnished by the Acquired Fund for use therein; and

(q)       The Acquiring Fund agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act and such of the state securities laws as may be necessary in order to continue its operations after the Closing Date.

| 5. | **Covenants of the Acquiring Fund and the Acquired Fund** |
|----|-----------------------------------------------------------|

5.1       The Acquiring Fund and the Acquired Fund each covenants to operate its business in the ordinary course between the date hereof and the Closing Date, it being understood that such ordinary course of business will include (i) the declaration and payment of customary dividends and other distributions and (ii) such changes as are            contemplated by the Funds’ normal operations. No party shall take any action that would, or reasonably would be expected to, result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect. The Acquired Fund and Acquiring Trust covenant and agree to coordinate the respective portfolios of the Acquired Fund and Acquiring Fund from the date of the Agreement up to and including the Closing Date in order that at            Closing, when the Assets are added to the Acquiring Fund’s portfolio, the resulting portfolio will meet the Acquiring Fund’s investment objective, policies, strategies and restrictions, as set forth in the Acquiring Fund’s prospectuses for Class A, Class B, Class C and Institutional Class shares, copies of which have been delivered to the Acquired Fund.

5.2       Upon reasonable notice, the Acquiring Trust’s officers and agents shall have reasonable access to the Acquired Fund’s books and records necessary to maintain current knowledge of the Acquired Fund and to ensure that the representations and warranties made by the Acquired Fund are accurate.

5.3       The Acquired Fund covenants to call a meeting of the Acquired Fund Shareholders entitled to vote thereon to consider and act upon this Agreement and to take all other reasonable action necessary to obtain approval of the transactions contemplated herein. Such meeting shall be scheduled for no later than March 27, 2009.

5.4       The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement.

5.5       The Acquired Fund covenants that it will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requests concerning the beneficial ownership of the Acquired Fund shares.

5.6       Subject to the provisions of this Agreement, the Acquiring Fund and the Acquired Fund will each take, or cause to be taken, all actions, and do or cause to be done, all things reasonably

 

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necessary, proper, and/or advisable to consummate and make effective the transactions contemplated by this Agreement.

5.7       Each Fund covenants to prepare in compliance with the 1933 Act, the 1934 Act and the 1940 Act the Registration Statement on Form N-14 (the “Registration Statement”) in connection with the meeting of the Acquired Fund Shareholders to consider approval of this Agreement and the transactions contemplated herein. The Acquiring            Trust will file the Registration Statement, including a proxy statement, with the Commission. The Acquired Fund will provide the Acquiring Fund with information reasonably necessary for the preparation of a prospectus, which will include a proxy statement, all to be included in the Registration Statement, in compliance in all material respects with the 1933 Act, the 1934 Act and the 1940 Act.

5.8       The Acquired Fund covenants that it will, from time to time, as and when reasonably requested by the Acquiring Fund, execute and deliver or cause to be executed and delivered all such assignments and other instruments, and will take or cause to be taken such further action as the Acquiring Fund may reasonably deem necessary or desirable in            order to vest in and confirm the Acquiring Fund’s title to and possession of all the Assets and otherwise to carry out the intent and purpose of this Agreement.

5.9       The Acquiring Fund covenants to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act and 1940 Act, and such of the state securities laws as it deems appropriate in order to continue its operations after the Closing Date and to consummate the transactions contemplated herein; provided, however, that            the Acquiring Fund may take such actions it reasonably deems advisable after the Closing Date as circumstances change.

5.10     The Acquiring Fund covenants that it will, from time to time, as and when reasonably requested by the Acquired Fund, execute and deliver or cause to be executed and delivered all such assignments, assumption agreements, releases, and other instruments, and will take or cause to be taken such further action, as the Acquired Fund may reasonably deem            necessary or desirable in order to (i) vest and confirm to the Acquired Fund title to and possession of all Acquiring Fund Shares to be transferred to the Acquired Fund pursuant to this Agreement and (ii) assume all of the liabilities of the Acquired Fund.

5.11     As soon as reasonably practicable after the Closing, the Acquired Fund shall make a liquidating distribution to its shareholders consisting of the Acquiring Fund Shares received at the Closing.

5.12     The Acquiring Fund and the Acquired Fund shall each use its reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to effect the transactions contemplated by this Agreement as promptly as practicable.

5.13     The intention of the parties is that the transaction will qualify as a reorganization within the meaning of Section 368(a) of the Code. Neither the Acquired Fund, the Acquiring Trust nor the Acquiring Fund shall take any action, or cause any action to be taken (including, without limitation, the filing of any tax return) that is inconsistent            with such treatment or results in the failure of the transaction to qualify as a reorganization within the meaning of Section 368(a) of the Code. At or prior to the Closing Date, the Acquired Fund, the Acquiring Trust and the Acquiring Fund will take such action, or cause such action to be taken, as is reasonably necessary to enable Willkie Farr & Gallagher LLP to render the tax opinion contemplated herein in section 8.5.

5.14     At or immediately prior to the Closing, the Acquired Fund will declare and pay to its shareholders a dividend or other distribution in an amount large enough so that it will have distributed substantially all (and in any event not less than 98%) of its investment company taxable income

 

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(computed without regard to any deduction for dividends paid) and realized net capital gain, if any, for the current taxable year through the Closing Date.

5.15     The Acquiring Fund agrees to identify in writing prior to the Closing Date any assets of the Acquired Fund that it does not wish to acquire because they are not consistent with the current investment objective, policies, restrictions and strategies of the Acquiring Fund, and the Acquired Fund agrees to dispose of such assets prior to the Closing            Date. The Acquiring Fund agrees to identify in writing prior to the Closing Date any assets that it would like the Acquired Fund to purchase, consistent with the Acquiring Fund’s investment objective, policies, restrictions and strategies, and the Acquired Fund agrees to purchase such assets pursuant to the Acquiring Fund’s investment objective, policies, restrictions and strategies prior to the Closing Date.

| 6. | **Conditions Precedent to Obligations of the Acquired Fund** |
|----|--------------------------------------------------------------|

The obligations of the Acquired Fund to consummate the transactions provided for herein shall be subject, at its election, to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions:

6.1       All representations and warranties of the Acquiring Trust, on behalf of the Acquiring Fund, contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date, with the same force and effect as if            made on and as of the Closing Date; and there shall be (i) no pending or threatened litigation brought by any person (other than the Acquired Fund, its adviser or any of their affiliates) against the Acquiring Fund or its investment adviser(s), Board members or officers arising out of this Agreement and (ii) no facts known to the Acquiring Fund which the Acquiring Fund reasonably believes might result in such litigation.

6.2       The Acquiring Fund shall have delivered to the Acquired Fund on the Closing Date a certificate executed in its name by the Acquiring Trust’s President or a Vice President, in a form reasonably satisfactory to the Acquired Fund and dated as of the Closing Date, to the effect that the representations and warranties of the Acquiring            Trust, on behalf of the Acquiring Fund, made in this Agreement are true and correct on and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Acquired Fund shall reasonably request.

6.3       The Acquired Fund shall have received on the Closing Date an opinion of Vedder Price P.C., in a form reasonably satisfactory to the Acquired Fund, and dated as of the Closing Date, to the effect that:

|   | (a) | the Acquiring Trust has been formed and is an existing business trust; |
|--------|-----|------------------------------------------------------------------------|

(b)       the Acquiring Fund has the power to carry on its business as presently conducted in accordance with the description thereof in the Acquiring Trust’s registration statement under the 1940 Act;

(c)        the Agreement has been duly authorized, executed and delivered by the Acquiring Trust, on behalf of the Acquiring Fund, and constitutes a valid and legally binding obligation of the Acquiring Trust, on behalf of the Acquiring Fund, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer,            reorganization, moratorium and laws of general applicability relating to or affecting creditors’ rights and to general equity principles;

 

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(d)       the execution and delivery of the Agreement by the Acquiring Trust, on behalf of the Acquiring Fund, did not, and the issuance of Acquiring Fund Shares pursuant to the Agreement will not, violate the Acquiring Trust’s Amended and Restated Declaration of Trust or By-laws; and

(e)        to the knowledge of such counsel, and without any independent investigation, (i) other than as disclosed on the schedule provided by the Acquiring Fund pursuant to section 4.2(e) of the Agreement, the Acquiring Fund is not subject to any litigation or other proceedings that might have a materially adverse effect on the operations            of the Acquiring Fund, (ii) the Acquiring Trust is registered as an investment company under the 1940 Act and no stop order suspending the effectiveness of its registration statement has been issued under the 1933 Act and no order of suspension or revocation of registration pursuant to Section 8(e) of the 1940 Act has been issued, and (iii) all regulatory consents, authorizations, approvals or filings required to be obtained or made by the Acquiring Fund under the            federal laws of the United States or the laws of The Commonwealth of Massachusetts for the issuance of Acquiring Fund Shares, pursuant to the Agreement have been obtained or made.

The delivery of such opinion is conditioned upon receipt by Vedder Price P.C. of customary representations it shall reasonably request of each of the Acquiring Trust and the Acquired Fund.

6.4       The Acquiring Fund shall have performed all of the covenants and complied with all of the provisions required by this Agreement to be performed or complied with by the Acquiring Fund on or before the Closing Date.

| 7. | **Conditions Precedent to Obligations of the Acquiring Fund** |
|----|---------------------------------------------------------------|

The obligations of the Acquiring Fund to consummate the transactions provided for herein shall be subject, at its election, to the performance by the Acquired Fund of all of the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions:

7.1       All representations and warranties of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date;            and there shall be (i) no pending or threatened litigation brought by any person (other than the Acquiring Fund, its adviser or any of their affiliates) against the Acquired Fund or its investment adviser, trustees or officers arising out of this Agreement and (ii) no facts known to the Acquired Fund which the Acquired Fund reasonably believes might result in such litigation.

7.2       The Acquired Fund shall have delivered to the Acquiring Fund a statement of the Acquired Fund’s assets and liabilities as of the Closing Date, certified by the Treasurer of the Acquired Fund.

7.3       The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate executed in its name by the Acquired Fund’s President or a Vice President, in a form reasonably satisfactory to the Acquiring Trust, on behalf of the Acquiring Fund, and dated as of the Closing Date, to the effect that the representations            and warranties of the Acquired Fund made in this Agreement are true and correct on and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Acquiring Fund shall reasonably request.

7.4       The Acquiring Fund shall have received on the Closing Date an opinion of Willkie Farr & Gallagher LLP in a form reasonably satisfactory to the Acquiring Fund, and dated as of the Closing Date, to the effect that:

 

----

|   | (a) | the Acquired Fund has been formed and is a validly existing corporation; |
|--------|-----|--------------------------------------------------------------------------|

(b)       the Acquired Fund has the power to carry on its business as presently conducted in accordance with the description thereof in the Acquired Fund’s registration statement under the 1940 Act;

(c)        the Agreement has been duly authorized, executed and delivered by the Acquired Fund and constitutes a valid and legally binding obligation of the Acquired Fund enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and laws of general applicability relating to or            affecting creditors’ rights and to general equity principles;

(d)       the execution and delivery of the Agreement did not, and the exchange of the Acquired Fund’s assets for Acquiring Fund Shares pursuant to the Agreement will not, violate the Acquired Fund’s Articles of Amendment and Restatement or By-laws, as amended; and

(e)        to the knowledge of such counsel, and without any independent investigation, (i) other than as disclosed on the schedule provided by the Acquired Fund pursuant to section 4.1(e) of the Agreement, the Acquired Fund is not subject to any litigation or other proceedings that might have a materially adverse effect on the operations of            the Acquired Fund, (ii) the Acquired Fund is registered as an investment company with the Commission and is not subject to any stop order, and (iii) all regulatory consents, authorizations, approvals or filings required to be obtained or made by the Acquired Fund under the federal laws of the United States or the laws of State of Maryland the exchange of the Acquired Fund’s assets for Acquiring Fund Shares, pursuant to the Agreement have been obtained or            made.

The delivery of such opinion is conditioned upon receipt by Willkie Farr & Gallagher LLP of customary representations it shall reasonably request of each of the Acquiring Trust and the Acquired Fund.

7.5       The Acquired Fund shall have performed all of the covenants and complied with all of the provisions required by this Agreement to be performed or complied with by the Acquired Fund on or before the Closing Date.

| 8. | **Further Conditions Precedent to Obligations of the Acquiring Fund and the Acquired Fund** |
|----|---------------------------------------------------------------------------------------------|

If any of the conditions set forth below have not been met on or before the Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement:

8.1       This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the holders of the outstanding shares of the Acquired Fund in accordance with the provisions of the Acquired Fund’s Articles of Amendment and Restatement and By-Laws, as amended, applicable Maryland law and the 1940 Act, and            certified copies of the resolutions evidencing such approval shall have been delivered to the Acquiring Fund. Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the conditions set forth in this section 8.1.

8.2       On the Closing Date, no action, suit or other proceeding shall be pending or to its knowledge threatened before any court or governmental agency in which it is sought to restrain or prohibit, or obtain material damages or other relief in connection with, this Agreement or the transactions contemplated herein.

 

----

8.3       All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities deemed necessary by the Acquiring Fund or the Acquired Fund to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such            consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of the Acquiring Fund or the Acquired Fund, provided that either party hereto may for itself waive any of such conditions.

8.4       The Registration Statement shall have become effective under the 1933 Act and no stop orders suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the 1933            Act.

8.5       The parties shall have received an opinion of Willkie Farr & Gallagher LLP addressed to each of the Acquiring Fund and the Acquired Fund, in a form reasonably satisfactory to each such party to this Agreement, substantially to the effect that, based upon certain facts, assumptions and representations of the parties, for federal            income tax purposes: (i) the acquisition by Acquiring Fund of all of the assets of Acquired Fund solely in exchange for Acquiring Fund Shares and the assumption by Acquiring Fund of all of the liabilities of Acquired Fund, followed by the distribution by Acquired Fund to its shareholders of Acquiring Fund Shares in complete liquidation of Acquired Fund, all pursuant to the Agreement, constitutes a reorganization within the meaning of Section 368(a) of the Code, and            Acquiring Fund and Acquired Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code; (ii) under Sections 361 and 357(a) of the Code, Acquired Fund will not recognize gain or loss upon the transfer of its assets to Acquiring Fund in exchange for Acquiring Fund Shares and the assumption of the Acquired Fund liabilities by Acquiring Fund, and Acquired Fund will not recognize gain or loss upon the distribution to its            shareholders of the Acquiring Fund Shares in liquidation of Acquired Fund; (iii) under Section 354 of the Code, shareholders of Acquired Fund will not recognize gain or loss on the receipt of Acquiring Fund Shares solely in exchange for Acquired Fund shares; (iv) under Section 358 of the Code, the aggregate basis of the Acquiring Fund Shares received by each shareholder of Acquired Fund will be the same as the aggregate basis of Acquired Fund shares exchanged            therefor; (v) under Section 1223(1) of the Code, the holding period of the Acquiring Fund Shares received by each Acquired Fund shareholder will include the holding period of Acquired Fund shares exchanged therefor, provided that the Acquired Fund shareholder held the Acquired Fund shares at the time of the reorganization as a capital asset; (vi) under Section 1032 of the Code, Acquiring Fund will not recognize gain or loss upon the receipt of assets of Acquired            Fund in exchange for Acquiring Fund Shares and the assumption by Acquiring Fund of all of the liabilities of Acquired Fund; (vii) under Section 362(b) of the Code, the basis of the assets of Acquired Fund transferred to Acquiring Fund in the reorganization will be the same in the hands of Acquiring Fund as the basis of such assets in the hands of Acquired Fund immediately prior to the transfer; and (viii) under Section 1223(2) of the Code, the holding periods of            the assets of Acquired Fund transferred to Acquiring Fund in the reorganization in the hands of Acquiring Fund will include the periods during which such assets were held by Acquired Fund. The delivery of such opinion is conditioned upon receipt by Willkie Farr & Gallagher LLP of representations it shall reasonably request of each of the Acquiring Trust and Acquired Fund. Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may            waive the condition set forth in this Section 8.5.

| 9. | **Indemnification** |
|----|---------------------|

9.1       The Acquiring Fund agrees to indemnify and hold harmless the Acquired Fund and each of the Acquired Fund’s directors and officers from and against any and all losses, claims, damages, liabilities or expenses (including, without limitation, the payment of reasonable legal fees and reasonable costs of investigation) to which jointly            and severally, the Acquired Fund or any of its directors or officers

 

----

may become subject, insofar as any such loss, claim, damage, liability or expense (or actions with respect thereto) arises out of or is based on any breach by the Acquiring Fund of any of its representations, warranties, covenants or agreements set forth in this Agreement.

9.2       The Acquired Fund agrees to indemnify and hold harmless the Acquiring Fund and each of the Acquiring Trust’s trustees and officers from and against any and all losses, claims, damages, liabilities or expenses (including, without limitation, the payment of reasonable legal fees and reasonable costs of investigation) to which jointly            and severally, the Acquiring Trust or any of its trustees or officers may become subject, insofar as any such loss, claim, damage, liability or expense (or actions with respect thereto) arises out of or is based on any breach by the Acquired Fund of any of its representations, warranties, covenants or agreements set forth in this Agreement.

| 10. | **Fees and Expenses** |
|-----|-----------------------|

10.1     The Acquiring Trust, on behalf of the Acquiring Fund, and the Acquired Fund represents and warrants to the other that it has no obligations to pay any brokers or finders fees in connection with the transactions provided for herein.

10.2     The Acquired Fund will bear all the expenses associated with the Reorganization, including, but not limited to, any transaction costs payable by the Acquired Fund in connection with the reconfiguration of its portfolio, as designated by the Acquiring Fund, in anticipation of the Reorganization. DIMA agrees to bear expenses incurred by the Acquired            Fund in connection with the Reorganization to the extent such expenses exceed the estimated total one-year benefit of the Reorganization to the Acquired Fund, as calculated on the Closing Date.

| 11. | **Entire Agreement** |
|-----|----------------------|

The Acquiring Fund and the Acquired Fund agree that neither party has made any representation, warranty or covenant not set forth herein and that this Agreement constitutes the entire agreement between the parties.

| 12. | **Termination** |
|-----|-----------------|

This Agreement may be terminated and the transactions contemplated hereby may be abandoned (i) by mutual agreement of the parties, or (ii) by either party if the Closing shall not have occurred on or before June 20, 2009, unless such date is extended by mutual agreement of the parties, or (iii) by either party if the other party shall have materially breached its            obligations under this Agreement or made a material and intentional misrepresentation herein or in connection herewith. In the event of any such termination, this Agreement shall become void and there shall be no liability hereunder on the part of any party or their respective Board members or officers, except for any such material breach or intentional misrepresentation, as to each of which all remedies at law or in equity of the party adversely affected shall survive.

| 13. | **Amendments** |
|-----|----------------|

This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by any authorized officer of the Acquired Fund and any authorized officer of the Acquiring Fund; provided, however, that following the meeting of the Acquired Fund Shareholders called by the Acquired Fund pursuant to section 5.3 of this Agreement, no such amendment may            have the effect of changing the provisions for determining the number of the Acquiring Fund Shares to be issued to the Acquired Fund Shareholders under this Agreement to the detriment of such shareholders without their further approval.

 

----

| 14. | **Notices** |
|-----|-------------|

Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be deemed duly given if delivered by hand (including by Federal Express or similar express courier) or transmitted by facsimile or three days after being mailed by prepaid registered or certified mail, return receipt requested, addressed to the Acquired            Fund, 345 Park Avenue, New York, New York 10154, with a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019, Attention: Burt Leibert, Esq., or to the Acquiring Fund, 345 Park Avenue, New York, New York 10154, with a copy to Vedder Price P.C., 222 North LaSalle Street, Chicago, Illinois 60601, Attention: David A. Sturms, Esq. or to any other address that the Acquired Fund or the Acquiring Fund shall have last designated by notice to the other            party.

| 15. | **Headings; Counterparts; Assignment; Limitation of Liability** |
|-----|-----------------------------------------------------------------|

15.1     The Article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

15.2     This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.

15.3     This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer            upon or give any person, firm or corporation, other than the parties hereto and the shareholders of the Acquiring Fund and the Acquired Fund and their respective successors and assigns, any rights or remedies under or by reason of this Agreement.

15.4     It is expressly agreed that the obligations of the Acquired Fund and Acquiring Trust hereunder shall not be binding upon any of the trustees/directors, shareholders, nominees, officers, agents, or employees of the Acquired Fund, Acquiring Trust or the Acquiring Fund personally, but bind only the respective property of the Funds, as provided in the            Acquired Fund’s and the Acquiring Trust’s charter documents. Moreover, no series of the Acquiring Trust other than the Acquiring Fund shall be responsible for the obligations of the Acquiring Trust hereunder, and all persons shall look only to the assets of the Acquiring Fund to satisfy the obligations of the Acquiring Trust hereunder. The execution and the delivery of this Agreement have been authorized by each of the Acquired Fund’s and Acquiring Trust’s            trustees/directors and this Agreement has been signed by authorized officers of each Fund acting as such, and neither such authorization by such trustees/directors, nor such execution and delivery by such officers, shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the respective property of the Funds, as provided in the Acquired Fund’s and the Acquiring Trust’s respective charter            documents.

Notwithstanding anything to the contrary contained in this Agreement, the obligations, agreements, representations and warranties with respect to each Fund shall constitute the obligations, agreements, representations and warranties of that Fund only (the “Obligated Fund”), and in no event shall any other series of the Acquiring Trust or the assets of any such series be            held liable with respect to the breach or other default by the Obligated Fund of its obligations, agreements, representations and warranties as set forth herein.

15.5     This Agreement shall be governed by, and construed and enforced in accordance with, the laws of The Commonwealth of Massachusetts, without regard to its principles of conflicts of laws.

 

----

**IN WITNESS WHEREOF**, each of the parties hereto has caused this Agreement to be executed by an authorized officer and its seal to be affixed thereto and attested by its Secretary or Assistant Secretary.

 

 

| Attest:______________________________________Secretary                                                                                                                   | **DWS BALANCED FUND**, on behalf of DWS Balanced Fund

By: __________________________________Its: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
| Attest:______________________________________Secretary                                                                                                                   | **DWS VALUE BUILDER FUND, INC.**

By: __________________________________Its:                      |
| AGREED TO AND ACKNOWLEDGED ONLY WITH RESPECT TO SECTION 10.2 HERETO**DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.**By: ___________________________________Its: |                                                                                              |

 

 

----

**EXHIBIT** **B**

**FINANCIAL HIGHLIGHTS [TO BE UPDATED]**

 

----

| I. SYNOPSIS | 1 |
|-------------|---|

| II. INVESTMENT STRATEGIES AND RISK FACTORS | 8 |
|--------------------------------------------|---|

| III. OTHER INFORMATION ABOUT THE FUNDS | 15 |
|----------------------------------------|----|

| IV. INFORMATION ABOUT THE PROPOSED MERGER | 21 |
|-------------------------------------------|----|

| V. INFORMATION ABOUT VOTING AT THE SHAREHOLDER MEETING | 27 |
|--------------------------------------------------------|----|

 

----

 

| **[DWS LOGO]** | **DWS VALUE BUILDER FUND, INC.**

**PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS**

**345 Park Avenue, 27th Floor, New York, New York 10154**

**_:__ _.m., Eastern time, on March 27, 2009** | **PROXY CARD** |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|

 

 

The undersigned hereby appoint(s) Patricia DeFilippis, Elisa Metzger and John Millette, and each of them, with full power of substitution, as proxy or proxies of the undersigned to vote all shares of the Fund that the undersigned is entitled in any capacity to vote at the above-stated Special Meeting of Shareholders, and at any and all adjournments or postponements thereof (the “Special            Meeting”), on the matter set forth in the Notice of a Special Meeting of Shareholders and on this Proxy Card, and, in their discretion, upon all matters incident to the conduct of the Special Meeting and upon such other matters as may properly be brought before the Special Meeting. This proxy revokes all prior proxies given by the undersigned.

 

**All properly executed proxies will be voted as directed. If no instructions are indicated on a properly executed proxy, the proxy will be voted FOR approval of the Proposal. All ABSTAIN votes will be counted in determining the existence of a quorum at the Special Meeting. Receipt of the Notice of a Special Meeting of Shareholders and the related Prospectus/Proxy Statement is            hereby acknowledged.**

 

VOTE VIA THE INTERNET: www.proxy-direct.com

**VOTE VIA THE TELEPHONE: 1-866-___-____**

|   | **______________________** | **_______** |
|--------|----------------------------|-------------|

|   | **______________________** | **_______** |
|--------|----------------------------|-------------|

 

**Note**: Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on this proxy card. When signing as attorney, trustee, executor, administrator, guardian or corporate officer, please give your FULL title as such.

 

______________________________________

Signature(s) (Title(s), if applicable)

 

_______________________________________

Date

 

 

 

 

 

**VOTING OPTIONS**

**Read your proxy statement and have it at hand when voting.**

 

 

| **[GRAPHIC OMITTED]**

**VOTE ON THE INTERNET**

**Log on to:**

**www.proxy-direct.com**

**Follow the on-*****available 24 hours*****screen instructions**

  | **[GRAPHIC OMITTED]**

**VOTE BY PHONE**

**Call 1-866-___-____**

**Follow the recorded**

**Instructions**

***available 24 hours*** | **[GRAPHIC OMITTED]**

**VOTE BY MAIL**

**Vote, sign and date this Proxy**

**Card and return in the**

**postage-paid envelope** | **[GRAPHIC OMITTED]**

**VOTE IN PERSON**

**Attend Shareholder Meeting**

**345 Park Avenue, 27th Floor**

**New York, NY 10154**

**on March 27, 2009** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

***If you vote on the Internet or by telephone, you need not return this proxy card.***

----

 

**THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WITH RESPECT TO YOUR FUND. THE FOLLOWING MATTER IS PROPOSED BY YOUR FUND. THE BOARD OF DIRECTORS RECOMMENDS A VOTE****FOR****THE PROPOSAL.**

 

| **TO VOTE, MARK A BLOCK BELOW IN BLUE OR BLACK INK. Example:** | **|___|** |
|----------------------------------------------------------------|-----------|

 

 

**VOTE ON PROPOSAL:**

 

 

| 1.     Approving an Agreement and Plan of Reorganization and the transactions it contemplates, including the transfer of all the assets of DWS Value Builder Fund, Inc. (“Value Builder Fund”) to DWS Balanced Fund (“Balanced Fund”), in exchange for shares of Balanced Fund and the assumption by Balanced Fund                            of all the liabilities of Value Builder Fund, and the distribution of such shares, on a tax-free basis for federal income tax purposes, to the shareholders of Value Builder Fund in complete liquidation and termination of Value Builder Fund.

  | FOR AGAINST ABSTAIN

|___| |___| |___| |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.**

**NO POSTAGE REQUIRED.**

 

----

```

 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS:

                            ------------------------

DWS Alternative Asset Allocation          DWS Global Opportunities Fund         DWS Micro Cap Fund
  Plus Fund                               DWS Global Thematic Fund              DWS Mid Cap Growth Fund
DWS Balanced Fund                         DWS GNMA Fund                         DWS New York Tax-Free Income Fund
DWS Blue Chip Fund                        DWS Gold & Precious Metals Fund       DWS RREEF Global Infrastructure Fund
DWS California Tax-Free Income Fund       DWS Growth & Income Fund              DWS RREEF Global Real Estate
DWS Capital Growth Fund                   DWS Health Care Fund                    Securities Fund
DWS Climate Change Fund                   DWS High Income Fund                  DWS RREEF Real Estate Securities Fund
DWS Commodity Securities Fund             DWS High Income Plus Fund             DWS S&P 500 Index Fund
DWS Communications Fund                   DWS Inflation Protected Plus Fund     DWS Select Alternative Allocation Fund
DWS Core Fixed Income Fund                DWS Intermediate Tax/AMT Free Fund    DWS Short Duration Fund
DWS Core Plus Allocation Fund             DWS International Fund                DWS Short Duration Plus Fund
DWS Core Plus Income Fund                 DWS International Select Equity Fund  DWS Short-Term Municipal Bond Fund
DWS Disciplined Long/Short Growth Fund    DWS International Value               DWS Small Cap Core Fund
DWS Disciplined Long/Short Value Fund       Opportunities Fund                  DWS Small Cap Growth Fund
DWS Disciplined Market Neutral Fund       DWS Japan Equity Fund                 DWS Strategic Government Securities Fund
DWS Dreman Concentrated Value Fund        DWS Large Cap Value Fund              DWS Strategic High Yield Tax Free Fund
DWS Dreman High Return Equity Fund        DWS Large Company Growth Fund         DWS Strategic Income Fund
DWS Dreman Mid Cap Value Fund             DWS Latin America Equity Fund         DWS Target 2010 Fund
DWS Dreman Small Cap Value Fund           DWS LifeCompass 2015 Fund             DWS Target 2011 Fund
DWS EAFE(R) Equity Index Fund             DWS LifeCompass 2020 Fund             DWS Target 2012 Fund
DWS Emerging Markets Equity Fund          DWS LifeCompass 2030 Fund             DWS Target 2013 Fund
DWS Emerging Markets Fixed Income Fund    DWS LifeCompass 2040 Fund             DWS Target 2014 Fund
DWS Enhanced S&P 500 Index Fund           DWS LifeCompass Income Fund           DWS Technology Fund
DWS Equity 500 Index Fund                 DWS LifeCompass Protect Fund          DWS U.S. Bond Index Fund
DWS Equity Income Fund                    DWS LifeCompass Retirement Fund       DWS Value Builder Fund
DWS Equity Partners Fund                  DWS Lifecycle Long Range Fund
DWS Europe Equity Fund                    DWS Managed Municipal Bond Fund
DWS Floating Rate Plus Fund               DWS Massachusetts Tax-Free Fund
DWS Global Bond Fund

--------------------------------------------------------------------------------

The following information replaces similar disclosure regarding the schedule for
posting portfolio holdings in the "Other Policies and Risks -- For more
information" section of each fund's prospectus:

A complete list of the fund's portfolio holdings is posted as of the month end
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.

               Please Retain This Supplement for Future Reference

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group
October 27, 2008
DMF-3682

    SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED
                                FUNDS/PORTFOLIOS:

                             ----------------------

 Cash Account Trust:                          DWS Floating Rate Plus Fund                 DWS Mid Cap Growth Fund
   Government & Agency Securities Portfolio   DWS Global Bond Fund                        DWS Money Market Prime Series
   Money Market Portfolio                     DWS Global Opportunities Fund               DWS Money Market Series
   Tax-Exempt Portfolio                       DWS Global Thematic Fund                    DWS New York Tax-Free Income Fund
 DWS Alternative Asset Allocation Plus Fund   DWS GNMA Fund                               DWS RREEF Global Infrastructure Fund
 DWS Balanced Fund                            DWS Gold & Precious Metals Fund             DWS RREEF Global Real Estate Securities
 DWS Blue Chip Fund                           DWS Growth & Income Fund                      Fund
 DWS California Tax-Free Income Fund          DWS Health Care Fund                        DWS RREEF Real Estate Securities Fund
 DWS Capital Growth Fund                      DWS High Income Fund                        DWS S&P 500 Index Fund
 DWS Climate Change Fund                      DWS High Income Plus Fund                   DWS Short Duration Fund
 DWS Commodity Securities Fund                DWS Inflation Protected Plus Fund           DWS Short Duration Plus Fund
 DWS Communications Fund                      DWS Intermediate Tax/AMT Free Fund          DWS Short-Term Municipal Bond Fund
 DWS Core Fixed Income Fund                   DWS International Fund                      DWS Small Cap Core Fund
 DWS Core Plus Allocation Fund                DWS International Select Equity Fund        DWS Small Cap Growth Fund
 DWS Core Plus Income Fund                    DWS International Value Opportunities       DWS Strategic Government Securities Fund
 DWS Disciplined Long/Short Growth Fund         Fund                                      DWS Strategic High Yield Tax Free Fund
 DWS Disciplined Long/Short Value Fund        DWS Japan Equity Fund                       DWS Strategic Income Fund
 DWS Disciplined Market Neutral Fund          DWS Large Cap Value Fund                    DWS Target 2010 Fund
 DWS Dreman Concentrated Value Fund           DWS Large Company Growth Fund               DWS Target 2011 Fund
 DWS Dreman High Return Equity Fund           DWS Latin America Equity Fund               DWS Target 2012 Fund
 DWS Dreman Mid Cap Value Fund                DWS LifeCompass 2015 Fund                   DWS Target 2013 Fund
 DWS Dreman Small Cap Value Fund              DWS LifeCompass 2020 Fund                   DWS Target 2014 Fund
 DWS EAFE(R) Equity Index Fund                  DWS LifeCompass 2030 Fund                   DWS Technology Fund
 DWS Emerging Markets Equity Fund             DWS LifeCompass 2040 Fund                   DWS U.S. Bond Index Fund
 DWS Emerging Markets Fixed Income Fund       DWS LifeCompass Income Fund                 DWS Value Builder Fund
 DWS Enhanced S&P 500 Index Fund              DWS LifeCompass Protect Fund                Investors Cash Trust:
 DWS Equity 500 Index Fund                    DWS LifeCompass Retirement Fund               Treasury Portfolio
 DWS Equity Income Fund                       DWS Lifecycle Long Range Fund               Tax-Exempt California Money Market Fund
 DWS Equity Partners Fund                     DWS Managed Municipal Bond Fund
 DWS Europe Equity Fund                       DWS Massachusetts Tax-Free Fund
                                              DWS Micro Cap Fund
------------------------------------------------------------------------------------------------------------------------------------

On or about  September 25, 2008,  the  following  information  replaces  similar
disclosure under "Policies about  transactions" in the "Policies You Should Know
About" section of each fund's/portfolio's prospectuses:

Each  fund/portfolio  accepts  payment  for shares only in US dollars by a check
drawn on a US bank, a bank or Federal Funds wire transfer or an electronic  bank
transfer.  A  fund/portfolio  does not accept third party checks.  A third party
check is a check made  payable to one or more  parties and offered as payment to
one or more other parties  (e.g.,  a check made payable to you that you offer as
payment to someone else).  Checks should  normally be payable to DWS Investments
and drawn by you or a  financial  institution  on your  behalf with your name or
account number included with the check.

               Please Retain This Supplement for Future Reference

                                                          [DWS INVESTMENTS LOGO]
                                                             Deutsche Bank Group

September 25, 2008
DMF-3671R

               SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES:

                                -----------------

                                DWS Balanced Fund
                          DWS Lifecycle Long Range Fund

The following individual has replaced Matthias Knerr as a portfolio manager for
each of the above-listed funds. The following biographical information replaces
that for Mr. Knerr in the "Portfolio management" section of each fund's
prospectuses:

  Joseph Axtell, CFA
  Managing Director of Deutsche Asset Management and Portfolio
  Manager of the fund.
    o Joined Deutsche Asset Management in 2001 and the fund in 2008.
    o Senior analyst at Merrill Lynch Investment Managers for the
      international equity portion of a global balanced portfolio
      (1996-2001).
    o Director, International Research at PCM International
      (1989-1996).
    o Associate manager, structured debt and equity group at
      Prudential Capital Corporation (1988-1989).
    o Analyst at Prudential-Bache Capital Funding in London
      (1987-1988).
    o Equity analyst in the healthcare sector at Prudential Equity
      Management Associates (1985-1987).
    o B.S., Carlson School of Management, University of Minnesota.

The following individual has been named consultant to the funds' advisor,
Deutsche Investment Management Americas Inc. (the "Advisor").

  Michael Sieghart, CFA
  Managing Director of DWS Investment GmbH: Frankfurt and
  consultant to the Advisor.
    o Joined DWS Investment GmbH: Frankfurt in 1997.
    o Senior fund manager of global and European equities: Frankfurt.
    o Master's degree in finance and economics from the University
      of Economics and Business Administration, Vienna.

               Please Retain This Supplement for Future Reference

                                                          [DWS INVESTMENTS LOGO]
                                                             Deutsche Bank Group

August 19, 2008
DMF-3676

               SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES

                                 -----------------

DWS Balanced Fund                        DWS Lifecycle Long Range Fund
DWS Blue Chip Fund                       DWS Small Cap Value Fund
DWS Growth & Income Fund                 DWS Target 2010 Fund
DWS Disciplined Market Neutral Fund      DWS Target 2011 Fund
DWS Disciplined Long/Short Value Fund    DWS Target 2012 Fund
DWS Disciplined Long/Short Growth Fund   DWS Target 2013 Fund
                                         DWS Target 2014 Fund

--------------------------------------------------------------------------------

Effective on or about July 1, 2008, James B. Francis will replace Jin Chen as a
portfolio manager for each of the above-listed funds. The following biographical
information for Mr. Francis replaces that for Ms. Chen in the "Portfolio
Management" section of each fund's prospectuses:

  James B. Francis, CFA
  Director of Deutsche Asset Management
  and Portfolio Manager of the fund.
    o Head of Active Quantitative Equity
      Portfolio Management: New York.
    o Joined Deutsche Asset Management
      in 2008 after 20 years of
      experience as senior quantitative
      global equity portfolio manager at
      State Street Global Advisors, and
      most recently, Northern Trust
      Global Investments.
    o BS in Applied Mathematics from
      University of Massachusetts,
      Amherst.

               Please Retain This Supplement for Future Reference

June 20, 2008
DMF-3668

                                                              [DWS SCUDDER LOGO]
                                                             Deutsche Bank Group

                    MARCH 1, 2008, AS REVISED APRIL 1, 2008

                                   PROSPECTUS
                              ------------------
                               CLASSES A, B AND C

                               DWS BALANCED FUND

As with all mutual funds, 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.

                            ONE GLOBAL FORCE. ONE FOCUS. YOU. [DWS SCUDDER Logo]
                                                             Deutsche Bank Group

CONTENTS

HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  5      The Main Risks of Investing in
         the Fund
 10      The Fund's Performance
         History
 13      How Much Investors Pay
 15      Other Policies and Risks
 16      Who Manages and Oversees
         the Fund
 21      Financial Highlights

HOW TO INVEST IN THE FUND
 25      Choosing a Share Class
 31      How to Buy Class A, B and C
         Shares
 32      How to Exchange or Sell
         Class A, B and C Shares
 35      Policies You Should Know
         About
 46      Understanding Distributions
         and Taxes
 50      Appendix

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASSES A, B AND C shares are generally intended for investors seeking the
advice and assistance of a financial advisor.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).

                        Class A    Class B    Class C
  ticker symbol         KTRAX      KTRBX      KTRCX
    fund number         002        202        302

    DWS BALANCED FUND

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks the highest total return, a combination of income
            and capital appreciation, consistent with reasonable risk.

            The fund can buy many types of securities, among them common
            stocks, convertible securities, corporate bonds, US government
            bonds, mortgage- and asset-backed securities and certain
            derivatives. The fund normally invests approximately 60% of its net
            assets in common stocks and other equity securities and
            approximately 40% of its net assets in fixed-income securities,
            including lower-quality, high-yield debt securities. These
            percentages may fluctuate in response to changing market
            conditions, but the fund will at all times invest at least 25% of
            net assets in fixed-income senior securities. Generally, most
            securities are from US issuers, but the fund may invest up to 25%
            of total assets in foreign securities.

            The Advisor allocates the fund's assets among various asset
            categories including growth and value stocks of large
            capitalization companies, small capitalization companies and
            investment-grade and high-yield debt securities. The Advisor
            reviews the fund's allocation among the various asset categories
            periodically and may adjust the fund's allocation among various
            asset categories based on current or expected market conditions or
            to manage risk as is consistent with the fund's overall investment
            strategy.

            The Advisor uses one or more strategies within each asset category
            for selecting equity and debt securities for the fund's portfolio.
            Each strategy is managed by a team of portfolio managers that
            specialize in a respective asset category. The strategies that the
            Advisor may implement utilize a variety of quantitative and
            qualitative techniques.

4 | DWS Balanced Fund

            IGAP STRATEGY. In addition to the fund'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-term and medium-term mispricings within global
            bond, equity 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 bonds and equity
            indexes and over-the-counter forward currency contracts, and is
            expected to have a low correlation to the fund's other securities
            holdings. Because the iGAP strategy relies primarily on futures,
            forward currency contracts and other derivative instruments, the
            aggregate notional market exposure obtained from such investments
            within the iGAP strategy may range up to 100% of the net assets of
            the fund (assuming the maximum allocation to the iGAP strategy).

            SECURITIES LENDING. The fund 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.

            DERIVATIVES. In addition to derivatives utilized within the iGAP
            strategy, the portfolio managers may, but are not required to, also
            use various types of derivatives. Derivatives may be used for
            hedging and for risk management or non-hedging purposes to enhance
            potential gains. The fund may use derivatives in circumstances
            where the portfolio managers believe they offer a more efficient or
            economical means of gaining exposure to a particular asset class or
            market or to maintain a high level of liquidity to meet shareholder
            redemptions or other needs while maintaining exposure to the
            market. The portfolio managers may use futures, options, forward
            currency transactions and swaps.

            THE MAIN RISKS OF INVESTING IN THE FUND

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

                                                          DWS Balanced Fund  | 5

            ASSET ALLOCATION RISK. Although asset allocation among different
            asset categories generally reduces risk and exposure to any one
            category, the risk remains that the Advisor may favor an asset
            category that performs poorly relative to the other asset
            categories. Because the fund employs more than one team of
            portfolio managers to manage each strategy within the asset
            categories in which the fund's assets are allocated, it is possible
            that different portfolio management teams could be purchasing or
            selling the same security at the same time which could affect the
            price at which the fund pays, or receives, for a particular
            security. In addition, it is possible that as one team of portfolio
            managers is purchasing a security another team of portfolio
            managers could be selling the same security resulting in no
            significant change in the overall assets of the fund but incurring
            additional costs for the fund. Further, because the Advisor may
            periodically adjust the fund's allocation among various asset
            categories, the fund may incur additional costs associated with
            portfolio turnover.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund'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 fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            INDUSTRY RISK. While the fund does not concentrate in any industry
            or sector, to the extent that the fund has exposure to a given
            industry or sector, any factors affecting that industry or sector
            could affect the value of portfolio securities. For example,
            manufacturers of consumer goods could be hurt by a rise in
            unemployment or technology companies could be hurt by such factors
            as market saturation, price competition and rapid obsolescence.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors interested in asset class diversification in
a single fund that invests in a mix of stocks and bonds.

6 | DWS Balanced Fund

            CREDIT RISK. A fund purchasing bonds faces the risk that the
            creditworthiness of an issuer may decline, causing the value of the
            bonds to decline. In addition, an issuer may not be able to make
            timely payments on the interest and/or principal on the bonds it
            has issued. Because the issuers of high-yield bonds or junk bonds
            (bonds rated below the fourth highest category) may be in uncertain
            financial health, the prices of these bonds may be more vulnerable
            to bad economic news or even the expectation of bad news, than
            investment-grade bonds. In some cases, bonds, particularly
            high-yield bonds, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the
            effective maturity of the fund's securities, the more sensitive the
            fund 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 decline, the issuers of securities
            held by the fund may prepay principal earlier than scheduled,
            forcing the fund to reinvest in lower-yielding securities.
            Prepayment may reduce the fund'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, increasing the fund's
            duration and reducing the value of such a security. Because the
            fund may invest in mortgage-related securities, it is more
            vulnerable to both of these risks.

            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 large companies. Small company stocks are typically
            less liquid than large company stocks. Accordingly, it may be
            harder to find buyers for small company shares.

            FOREIGN INVESTMENT RISK. To the extent the fund has exposure to
            companies based outside the US, it faces the risks inherent in
            foreign investing. Adverse political, economic or social
            developments could undermine the value of the

                                                          DWS Balanced Fund  | 7

            fund's investments or prevent the fund from realizing their full
            value. Financial reporting standards for companies based in foreign
            markets differ from those in the US. Additionally, foreign
            securities markets generally are smaller and less liquid than the
            US markets. These risks tend to be greater in emerging markets so,
            to the extent the fund invests in emerging markets, it takes on
            greater risks. The currency of a country in which the fund has
            invested could decline relative to the value of the US dollar,
            which decreases the value of the investment to US investors. The
            investments of the fund may be subject to foreign withholding
            taxes.

            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 fund may be
            significant and may exceed the intended level of market exposure
            for the iGAP strategy.

            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
            fund 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 fund to the effects of leverage, which
            could increase the fund'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 fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund'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 fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

8 | DWS Balanced Fund

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.

            -  the Advisor measures credit quality at the time it buys
               securities, using independent rating agencies or, for unrated
               securities, the Advisor's own credit quality standards. If a
               security's credit quality declines, the Advisor will decide what
               to do with the security, based on the circumstances and its
               assessment of what would benefit shareholders most.

                                                          DWS Balanced Fund  | 9

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads on fund
performance. The performance of both the fund and the index varies over time.
All figures assume reinvestment of dividends and distributions (in the case of
after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

DWS Balanced Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)

[GRAPHIC APPEARS HERE]

15.91      14.60       -2.78      -6.78      -15.67     17.21       6.14      3.97      9.84     4.43
1998       1999       2000       2001        2002       2003       2004      2005      2006      2007

FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 12.04%, Q4 1998              WORST QUARTER: -10.01%, Q2 2002

10 | DWS Balanced Fund

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007 (Fund returns include the
effects of maximum sales load.)

                                               1 YEAR       5 YEARS      10 YEARS
 CLASS A
   Return before Taxes                           -1.58         6.94        3.57
   Return after Taxes on Distributions           -2.46         6.26        2.34
   Return after Taxes on Distributions
   and Sale of Fund Shares                      -0.74*         5.66        2.45*
 CLASS B (Return before Taxes)                  1.18           7.46        3.40
 CLASS C (Return before Taxes)                  3.44           7.28        3.28
 S&P 500 (reflects no deductions for
 fees, expenses or taxes)                       5.49          12.83        5.91
 RUSSELL 1000 INDEX (reflects no
 deductions for fees, expenses or
 taxes)                                         5.77          13.43        6.20
 RUSSELL 2000 INDEX (reflects no
 deductions for fees, expenses or
 taxes)                                         -1.57         16.25        7.08
 LEHMAN BROTHERS U.S. AGGREGATE
 INDEX (reflects no deductions for fees,
 expenses or taxes)                             6.97           4.42        5.97
 MSCI EAFE INDEX (reflects no
 deductions for fees, expenses or
 taxes)                                        11.17          21.59        8.66
 CREDIT SUISSE HIGH YIELD INDEX
 (reflects no deductions for fees,
 expenses or taxes)                             2.65          10.97        6.10
 MERRILL LYNCH 3-MONTH US TREASURY
 BILL INDEX (reflects no deductions for
 fees, expenses or taxes)                       5.03           3.07        3.77

     Total returns would have been lower had certain expenses not been reduced.

 *Return after Taxes on Distributions and Sale of Fund Shares is higher than
 other return figures for the same period due to a capital loss occurring upon
 redemption resulting in an assumed tax deduction for the shareholder.

 The Russell 1000 Index replaces the S&P 500 as the fund's benchmark index for
 equity investments because the Advisor believes that it more accurately
 reflects the fund's investment strategy.

 STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged, capitalization-weighted
 index of 500 stocks. The index is designed to measure performance of the broad
 domestic economy through changes in the aggregate market value of 500 stocks
 representing all major industries.

 RUSSELL 1000 (Reg. TM) INDEX is an unmanaged price-only index of the 1,000
 largest capitalized companies that are domiciled in the US and whose common
 stocks are traded.

 RUSSELL 2000 (Reg. TM) INDEX is an unmanaged capitalization-weighted measure
 of approximately 2,000 small US stocks.

                                                         DWS Balanced Fund  | 11

 LEHMAN BROTHERS U.S. AGGREGATE INDEX is an unmanaged market value-weighted
 measure of Treasury issues, agency issues, corporate bond issues and mortgage
 securities.

 MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, AUSTRALASIA AND THE FAR
 EAST (EAFE) INDEX is an unmanaged index that tracks international stock
 performance in the 21 developed markets of Europe, Australasia and the Far
 East.

 CREDIT SUISSE HIGH YIELD INDEX is an unmanaged trader-priced portfolio,
 constructed to mirror the global high-yield debt market.

 MERRILL LYNCH 3-MONTH US TREASURY BILL INDEX is an unmanaged index capturing
 the performance of a single issue maturing closest to, but not exceeding,
 three months from the re-balancing date.

--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-scudder.com.

--------------------------------------------------------------------------------
RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.

RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.

12 | DWS Balanced Fund

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.

FEE TABLE                                        CLASS A         CLASS B       CLASS C
 SHAREHOLDER FEES, paid directly from your investment
___________________________________________________________________________________________
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)           5.75%1           None          None
 Maximum Deferred Sales Charge (Load)
 (as % of redemption proceeds)                   None2             4.00%         1.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
___________________________________________________________________________________________
 Management Fee                                   0.47  %          0.47%         0.47%
 Distribution/Service (12b-1) Fee                 0.24             1.00          0.99
 Other Expenses                                   0.21             0.42          0.29
 Underlying Fund Expenses 3                       0.02             0.02          0.02
 TOTAL ANNUAL OPERATING EXPENSES 4, 5             0.94             1.91          1.77

1   Because of rounding in the calculation of the offering price, the actual
   maximum front-end sales charge paid by an investor may be higher than the
   percentage noted (see "Choosing a Share Class - Class A shares").

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
   be subject to a contingent deferred sales charge of 1.00% if redeemed
   within 12 months of purchase and 0.50% if redeemed within the following six
   months.

3   The amount indicated is based on the indirect net expenses associated with
   the fund's investment in underlying funds for the fiscal year ended October
   31, 2007.

4   The distributor has temporarily agreed to eliminate the 12b-1 distribution
   fee of 0.75% for Class B shares only.

5   Through November 17, 2008 for Class A shares and March 13, 2008 for Class B
   and Class C shares, the Advisor has contractually agreed to waive all or a
   portion of its management fee and reimburse or pay operating expenses of
   the fund to the extent necessary to maintain the fund's total operating
   expenses at 0.93%, 1.88% and 1.80% for Class A, Class B and Class C shares,
   respectively, excluding certain expenses such as extraordinary expenses,
   taxes, brokerage, interest and indirect expenses of underlying funds.

                                                         DWS Balanced Fund  | 13

Based on the costs above, this example helps you compare the expenses of the
fund 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 and reinvested all dividends and distributions. This is only an
example; actual expenses will be different.

EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
 EXPENSES, assuming you sold your shares at the end of each period.
_________________________________________________________________________
 Class A shares         $665         $857       $1,065       $1,663
 Class B shares*         594          900        1,232        1,747
 Class C shares          280          557          959        2,084

 EXPENSES, assuming you kept your shares.
_________________________________________________________________________
 Class A shares         $665         $857       $1,065       $1,663
 Class B shares*         194          600        1,032        1,747
 Class C shares          180          557          959        2,084

*   Reflects conversion of Class B to Class A shares, which pay lower fees.
   Conversion occurs six years after purchase.

14 | DWS Balanced Fund

OTHER POLICIES AND RISKS

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

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

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities or
              other short-term securities that offer comparable levels of risk.
              This could prevent losses, but, while engaged in a temporary
              defensive position, the fund will not be pursuing its investment
              objective. However, portfolio management may choose not to use
              these strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean distributions at higher tax
              rates.

           For more information

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

           If you want more information on the fund'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 fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings is posted as of the
           month-end on www.dws-scudder.com (the Web site does not form a part
           of this prospectus) on or after the last day of the following month.
           This posted information generally remains accessible at least until
           the date on which the fund 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. In addition, the
           fund's top ten equity

                                                  Other Policies and Risks  | 15

           holdings and other fund information is posted on www.dws-scudder.com
           as of the calendar quarter-end on or after the 15th day following
           quarter-end. The fund's Statement of Additional Information includes
           a description of the fund's policies and procedures with respect to
           the disclosure of the fund's portfolio holdings.

WHO MANAGES AND OVERSEES THE FUND

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund 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.

16 | Who Manages and Oversees the Fund

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.

FUND NAME                          FEE PAID
  DWS Balanced Fund                  0.47%

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the most
           recent shareholder reports for the annual period ended October 31
           (see "Shareholder reports" on the back cover).

           The Subadvisor

           The subadvisor for the fund is Deutsche Asset Management
           International GmbH ("DeAMi"), Mainzer Landstrasse 178-190, Frankfurt
           am Main, Germany. DeAMi renders investment advisory and management
           services to a portion of the fund's large cap value allocation.
           DeAMi is an investment advisor registered with the SEC and currently
           manages over $60 billion in assets, which is primarily comprised of
           institutional accounts and investment companies. DeAMi is a
           subsidiary of Deutsche Bank AG. DIMA compensates DeAMi out of the
           management fee it receives from the fund.

           A discussion regarding the basis for the Board's approval of the
           subadvisory agreement will be contained in the semiannual report for
           the period ended April 30, 2008.

                                         Who Manages and Oversees the Fund  | 17

Portfolio management

DWS Balanced Fund is managed by separate teams of investment professionals who
develop and implement each strategy within a particular asset category which
together make up the fund's overall investment strategy. Each portfolio
management team has authority over all aspects of the portfolio of the fund's
investment portfolio allocated to it, including, but not limited to, purchases
and sales of individual securities, portfolio construction techniques,
portfolio risk assessment and the management of daily cash flows in accordance
with portfolio holdings.

DWS BALANCED FUND

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

William Chepolis, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1998 after 13 years of experience as
   vice president and portfolio manager for Norwest Bank, where he managed the
   bank's fixed income and foreign exchange portfolios.
-  Portfolio Manager for Retail Mortgage Backed Securities: New York.
-  Joined the fund in 2005.
-  BIS, University of Minnesota.

Matthew F. MacDonald
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management and the fund in 2006 after 14 years of
   fixed income experience at Bank of America Global Structured Products and
   PPM America, Inc., where he was portfolio manager for public fixed income,
   including MBS, ABS, CDOs and corporate bonds; earlier, as an analyst for
   MBS, ABS and money markets; and originally, at Duff & Phelps Credit Rating
   Company.
-  Portfolio Manager for Retail Mortgage Backed Securities: New York.
-  BA, Harvard University; MBA, University of Chicago Graduate School of
   Business.

Inna Okounkova
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Global Asset Allocation Portfolio Manager: New York.
-  Joined Deutsche Asset Management in 1999 as a quantitative analyst, becoming
   an associate Portfolio Manager in 2001.
-  Joined the fund in 2005.
-  BS, MS, Moscow State University; MBA, University of Chicago.

Gary Sullivan, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1996 and the fund in 2006. Served as the
   head of the High Yield group in Europe and as an Emerging Markets portfolio
   manager.
-  Prior to that, four years at Citicorp as a research analyst and structurer
   of collateralized mortgage obligations. Prior to Citicorp, served as an
   officer in the US Army from 1988 to 1991.
-  BS, United States Military Academy (West Point); MBA, New York University,
   Stern School of Business.

18 | Who Manages and Oversees the Fund

Julie M. Van Cleave, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management and the fund in 2002.
-  Head of Large Cap Growth Portfolio Selection Team.
-  Previous experience includes 18 years of investment industry experience at
   Mason Street Advisors, as Managing Director and team leader for the large
   cap investment team.
-  BBA, MBA, University of Wisconsin - Madison.

Robert Wang
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Global Asset Allocation Senior Portfolio Manager: New York.
-  Joined Deutsche Asset Management in 1995 as a senior fixed income portfolio
   manager after 13 years of experience at J.P. Morgan & Co. trading fixed
   income, derivatives and foreign exchange products.
-  Joined the fund in 2005.
-  BS, The Wharton School, University of Pennsylvania.

Thomas Picciochi
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Senior portfolio manager for Quantitative strategies: New York.
-  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.
-  Joined the fund in 2007.
-  BA and MBA, University of Miami.

     Jin Chen
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Senior portfolio manager for Global strategies: New York.
-  Joined Deutsche Asset Management in 1999; prior to that, served as portfolio
   manager for Absolute Return Strategies and as a fundamental equity analyst
   and portfolio manager for Thomas White Asset Management.
-  Joined the fund in 2007.
-  BS, Nanjing University; MS, Michigan State University.

Julie Abbett
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Senior portfolio manager for Global Quantitative Equity: New York.
-  Joined Deutsche Asset Management in 2000 after four years of combined
   experience as a consultant with equity trading services for BARRA, Inc. and
   a product developer for FactSet Research.
-  Joined the fund in 2007.
-  BA, University of Connecticut.

Matthias Knerr, CFA
Managing Director, Deutsche Asset Management and Portfolio Manager of the fund.

-  Joined Deutsche Asset Management in 1995 as a member of the International
   Equity team, serving as portfolio manager and investment analyst, and;
   joined the fund in 2007.
-  Senior portfolio manager for International Select Equity and International
   Equity Strategies: New York.
-  Previously served as portfolio manager for the Deutsche European Equity Fund
   and the Deutsche Global Select Equity Fund, and as head of global equity
   research team for Capital Goods sector: London.
-  BS, Pennsylvania State University.

                                         Who Manages and Oversees the Fund  | 19

Thomas Schuessler, PhD
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
- Joined Deutsche Asset Management in 2001 after five years at Deutsche Bank
   where he managed various projects and worked in the office of the Chairman
   of the Management Board.
- US and Global Fund Management: Frankfurt.
- Joined the fund in 2008
- PhD, University of Heidelberg, studies in physics and economics at University
   of Heidelberg and University of Utah.

John Brennan
Director of Deutsche Asset Management and Portfolio Manager of the fund.
- Portfolio and Sector Manager for Institutional Fixed Income: Louisville.
- Joined Deutsche Asset Management and the fund in 2007 after 14 years of
   experience at INVESCO and Freddie Mac. Previously, was head of Structured
   Securities sector team at INVESCO and before that was senior fixed income
   portfolio manager at Freddie Mac specializing in MBS, CMBS, collateralized
   mortgage obligations, ARMS, mortgage derivatives, US Treasuries and agency
   debt.
- BS, University of Maryland; MBA William & Mary.

J. Richard Robben, CFA
Vice President of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management and the fund in 2007 after 11 years of
   experience at INVESCO Institutional, most recently as senior portfolio
   manager for LIBOR-related strategies and head of portfolio construction
   group for North American Fixed Income.
- BA, Bellarmine University.

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

20 | Who Manages and Oversees the Fund

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in
the fund would have earned (or lost), assuming all dividends and distributions
were reinvested. This information has been audited by Ernst & Young LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).

DWS Balanced Fund - Class A

YEARS ENDED OCTOBER 31,                        2007            2006            2005          2004         2003
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------          -
NET ASSET VALUE, BEGINNING OF PERIOD         $  9.70        $    8.99        $  8.68       $  8.44      $  7.62
----------------------------------------     -------        ---------        -------       -------      -------
Income (loss) from investment
operations:
  Net investment income a                        .26           .23d              .21           .13          .13
________________________________________     _______        _________        _______       _______      _______
  Net realized and unrealized gain
  (loss)                                         .61              .69            .31           .26          .83
----------------------------------------     -------        ---------        -------       -------      -------
  TOTAL FROM INVESTMENT OPERATIONS               .87              .92            .52           .39          .96
________________________________________     _______        _________        _______       _______      _______
Less distributions from:
  Net investment income                       (  .32)           ( .21)         ( .21)        ( .15)       ( .14)
________________________________________     _______        _________        _______       _______      _______
Redemption fees                                  .00*             .00*           .00*            -            -
----------------------------------------     -------        ---------        -------       -------      -------
NET ASSET VALUE, END OF PERIOD               $ 10.25        $    9.70        $  8.99       $  8.68      $  8.44
----------------------------------------     -------        ---------        -------       -------      -------
Total Return (%)b                             9.08c          10.40c,d         5.97c           4.59        12.69
----------------------------------------     -------        ---------        -------       -------      -------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------    -------
Net assets, end of period ($ millions)         1,299            1,367          1,459         1,620        1,764
________________________________________     _______        _________        _______       _______      _______
Ratio of expenses before expense
reductions (%)                                   .92              .97            .98          1.03         1.06
________________________________________     _______        _________        _______       _______      _______
Ratio of expenses after expense
reductions (%)                                   .92              .92            .96          1.03         1.06
________________________________________     _______        _________        _______       _______      _______
Ratio of net investment income (%)              2.59          2.56d             2.40          1.55         1.64
________________________________________     _______        _________        _______       _______      _______
Portfolio turnover rate (%)                    188e            98e             158e          81e            108
----------------------------------------     -------        ---------        -------       -------      -------

a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charge.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Scudder Funds. The non-recurring
   income resulted in an increase in net investment income of $0.007 per share
   and an increase in the ratio of net investment income of 0.07%. Excluding
   this non-recurring income, total return would have been 0.07% lower.

e   The portfolio turnover rates excluding mortgage dollar roll transactions
   were 178%, 96%, 156% and 74% for the years ended October 31, 2007, 2006,
   2005 and 2004, respectively.

*   Amount is less than $.005.

                                                      Financial Highlights  | 21

DWS Balanced Fund - Class B

YEARS ENDED OCTOBER 31,                         2007             2006             2005           2004          2003
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------           -
NET ASSET VALUE, BEGINNING OF PERIOD          $  9.75         $    9.01         $  8.69        $  8.44       $  7.62
----------------------------------------      -------         ---------         -------        -------       -------
Income (loss) from investment
operations:
  Net investment income a                         .24            .21d               .16            .06           .06
________________________________________      _______         _________         _______        _______       _______
  Net realized and unrealized gain
  (loss)                                          .60               .70             .30            .25           .82
----------------------------------------      -------         ---------         -------        -------       -------
  TOTAL FROM INVESTMENT OPERATIONS                .84               .91             .46            .31           .88
________________________________________      _______         _________         _______        _______       _______
Less distributions from:
  Net investment income                        (  .29)            ( .17)          ( .14)         ( .06)        ( .06)
________________________________________      _______         _________         _______        _______       _______
Redemption fees                                   .00*              .00*            .00*             -             -
----------------------------------------      -------         ---------         -------        -------       -------
NET ASSET VALUE, END OF PERIOD                $ 10.30         $    9.75         $  9.01        $  8.69       $  8.44
----------------------------------------      -------         ---------         -------        -------       -------
Total Return (%)b                              8.79c           10.18c,d          5.30c          3.71c          11.67
----------------------------------------      -------         ---------         -------        -------       -------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------     -------
Net assets, end of period ($ millions)             52                77             114            178           248
________________________________________      _______         _________         _______        _______       _______
Ratio of expenses before expense
reductions (%)                                   1.89              1.99            1.94           1.94          1.97
________________________________________      _______         _________         _______        _______       _______
Ratio of expenses after expense
reductions (%)                                   1.13              1.16            1.54           1.93          1.97
________________________________________      _______         _________         _______        _______       _______
Ratio of net investment income (%)               2.37           2.32d              1.82            .65           .73
________________________________________      _______         _________         _______        _______       _______
Portfolio turnover rate (%)                     188e             98e             158e            81e             108
----------------------------------------      -------         ---------         -------        -------       -------

a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charge.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Scudder Funds. The non-recurring
   income resulted in an increase in net investment income of $0.007 per share
   and an increase in the ratio of net investment income of 0.07%. Excluding
   this non-recurring income, total return would have been 0.07% lower.

e   The portfolio turnover rates excluding mortgage dollar roll transactions
   were 178%, 96%, 156% and 74% for the years ended October 31, 2007, 2006,
   2005 and 2004, respectively.

*   Amount is less than $.005.

22 | Financial Highlights

DWS Balanced Fund - Class C

YEARS ENDED OCTOBER 31,                         2007            2006           2005          2004          2003
SELECTED PER SHARE DATA
----------------------------------------------------------------------------------------------------           -
NET ASSET VALUE, BEGINNING OF PERIOD          $  9.68         $  8.97        $  8.66       $  8.42       $  7.60
----------------------------------------      -------         -------        -------       -------       -------
Income (loss) from investment
operations:
  Net investment income a                         .18          .16d              .14           .06           .06
________________________________________      _______         _______        _______       _______       _______
  Net realized and unrealized gain
  (loss)                                          .59             .69            .30           .25           .83
----------------------------------------      -------         -------        -------       -------       -------
  TOTAL FROM INVESTMENT OPERATIONS                .77             .85            .44           .31           .89
________________________________________      _______         _______        _______       _______       _______
Less distributions from:
  Net investment income                        (  .23)          ( .14)         ( .13)        ( .07)        ( .07)
________________________________________      _______         _______        _______       _______       _______
Redemption fees                                   .00*            .00*           .00*            -             -
----------------------------------------      -------         -------        -------       -------       -------
NET ASSET VALUE, END OF PERIOD                $ 10.22         $  9.68        $  8.97       $  8.66       $  8.42
----------------------------------------      -------         -------        -------       -------       -------
Total Return (%)b                                8.05          9.52d          5.09c           3.65         11.81
----------------------------------------      -------         -------        -------       -------       -------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------     -------
Net assets, end of period ($ millions)             31              33             38            50            57
________________________________________      _______         _______        _______       _______       _______
Ratio of expenses before expense
reductions (%)                                   1.75            1.77           1.86          1.90          1.93
________________________________________      _______         _______        _______       _______       _______
Ratio of expenses after expense
reductions (%)                                   1.75            1.76           1.78          1.89          1.93
________________________________________      _______         _______        _______       _______       _______
Ratio of net investment income (%)               1.75          1.72d            1.58           .69           .77
________________________________________      _______         _______        _______       _______       _______
Portfolio turnover rate (%)                     188e            98e           158e           81e             108
----------------------------------------      -------         -------        -------       -------       -------

a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charge.

c   Total return would have been lower had certain expenses not been reduced.

d   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Scudder Funds. The non-recurring
   income resulted in an increase in net investment income of $0.007 per share
   and an increase in the ratio of net investment income of 0.07%. Excluding
   this non-recurring income, total return would have been 0.07% lower.

e   The portfolio turnover rates excluding mortgage dollar roll transactions
   were 178%, 96%, 156% and 74% for the years ended October 31, 2007, 2006,
   2005 and 2004, respectively.

*   Amount is less than $.005.

                                                      Financial Highlights  | 23

HOW TO INVEST IN THE FUND

Offered in this prospectus are share classes noted on the cover of the
prospectus. Each class has its own fees and expenses, offering you a choice of
cost structures. The fund may offer other classes of shares in a separate
prospectus. These shares are intended for investors seeking the advice and
assistance of a financial advisor, who will typically receive compensation for
those services.

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Scudder, all of this information applies
to you. If you're investing through a "third party provider" - for example, a
workplace retirement plan, financial supermarket or financial advisor - your
provider may have its own policies or instructions and you should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you. YOU
MAY WANT TO ASK YOUR FINANCIAL ADVISOR TO HELP YOU WITH THIS DECISION.

CHOOSING A SHARE CLASS

We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief description and
comparison of the main features of each class.

 CLASSES AND FEATURES                         POINTS TO HELP YOU COMPARE
 CLASS A
 -  Sales charge of up to 5.75% charged       -  Some investors may be able to reduce
  when you buy shares                        or eliminate their sales charge; see
                                             "Class A shares"
 -  In most cases, no charge when you
  sell shares                                -  Total annual expenses are lower than
                                             those for Class B or Class C
 -  Up to 0.25% annual shareholder
  servicing fee
 CLASS B
 -  No sales charge when you buy shares       -  The deferred sales charge rate falls to
                                             zero after six years
 -  Deferred sales charge declining from
  4.00%, charged when you sell shares        -  Shares automatically convert to
  you bought within the last six years       Class A after six years, which means
                                             lower annual expenses going forward
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing
  fee
 CLASS C
 -  No sales charge when you buy shares       -  The deferred sales charge rate for one
                                             year is lower for Class C shares than
 -  Deferred sales charge of 1.00%,
                                             Class B shares, but your shares never
  charged when you sell shares you
                                             convert to Class A, so annual expenses
  bought within the last year
                                             remain higher
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing
  fee

Your financial advisor will typically be paid a fee when you buy shares and may
receive different levels of compensation depending upon which class of shares
you buy. The fund may pay financial advisors or other intermediaries
compensation for the services they provide to their clients. This compensation
may vary depending on the class share and fund you buy. Your financial advisor
may also receive compensation from the Advisor and/or its affiliates. Please
see "Financial intermediary support payments" for more information.

                                                    Choosing a Share Class  | 25

           Class A shares

           Class A shares may make sense for long-term investors, especially
           those who are eligible for a reduced or eliminated sales charge.

           Class A shares have a 12b-1 plan, under which a shareholder
           servicing fee of up to 0.25% is deducted from class assets each
           year. Because the shareholder servicing fee is continuous in nature,
           it may, over time, increase the cost of your investment and may cost
           you more than paying other types of sales charges.

           Class A shares have an up-front sales charge that varies with the
           amount you invest:

                              FRONT-END SALES          FRONT-END SALES
                                CHARGE AS %          CHARGE AS % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE 1,2        NET INVESTMENT 2
  Up to $50,000           5.75%                     6.10%
$    50,000-$99,999       4.50                      4.71
$  100,000-$249,999       3.50                      3.63
$  250,000-$499,999       2.60                      2.67
$  500,000-$999,999       2.00                      2.04
  $1 million or more            see below                see below

           1   The offering price includes the sales charge.

           2   Because of rounding in the calculation of the offering price,
               the actual front-end sales charge paid by an investor may be
               higher or lower than the percentages noted.

           YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:

           -  you plan to invest at least $50,000 in Class A shares (including
              Class A shares in other retail DWS funds) over the next 24 months
              ("Letter of Intent")

           -  the amount of Class A shares you already own (including Class A
              shares in other retail DWS funds) plus the amount you're
              investing now in Class A shares is at least $50,000 ("Cumulative
              Discount")

           -  you are investing a total of $50,000 or more in Class A shares of
              several retail DWS funds on the same day ("Combined Purchases")

26 | Choosing a Share Class

           The point of these three features is to let you count investments
           made at other times or in certain other funds for purposes of
           calculating your present sales charge. Any time you can use the
           privileges to "move" your investment into a lower sales charge
           category, it's generally beneficial for you to do so.

           For purposes of determining whether you are eligible for a reduced
           Class A sales charge, you and your immediate family (your spouse or
           life partner and your children or stepchildren age 21 or younger)
           may aggregate your investments in the DWS family of funds. This
           includes, for example, investments held in a retirement account, an
           employee benefit plan or at a financial advisor other than the one
           handling your current purchase. These combined investments will be
           valued at their current offering price to determine whether your
           current investment qualifies for a reduced sales charge.

           To receive a reduction in your Class A initial sales charge, you
           must let your financial advisor or Shareholder Services know at the
           time you purchase shares that you qualify for such a reduction. You
           may be asked by your financial advisor or Shareholder Services to
           provide account statements or other information regarding related
           accounts of you or your immediate family in order to verify your
           eligibility for a reduced sales charge.

           For more information about sales charge discounts, please visit
           www.dws-scudder.com (click on the link entitled "Fund Sales Charge
           and Breakpoint Schedule"), consult with your financial advisor or
           refer to the section entitled "Purchase or Redemption of Shares" in
           the fund's Statement of Additional Information.

           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in Class A shares of the fund.
           In addition, a sales charge waiver may apply to transactions by
           certain retirement plans and certain other entities or persons
           (e.g., affiliated persons of Deutsche Asset Management or the DWS
           funds) and with respect to certain types of investments (e.g., an
           investment advisory or agency commission program under which you pay
           a fee to an investment advisor or other firm for portfolio
           management or brokerage services).

                                                    Choosing a Share Class  | 27

           Details regarding the types of investment programs and categories of
           investors eligible for a sales charge waiver are provided in the
           fund's Statement of Additional Information.

           There are a number of additional provisions that apply in order to
           be eligible for a sales charge waiver. The fund may waive the sales
           charge for investors in other situations as well. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 1.00% on any shares you
           sell within 12 months of owning them and a similar charge of 0.50%
           on shares you sell within the following six months. This CDSC is
           waived under certain circumstances (see "Policies You Should Know
           About"). Your financial advisor or Shareholder Services can answer
           your questions and help you determine if you're eligible.

           Class B shares

           Class B shares may make sense for long-term investors who prefer to
           see all of their investment go to work right away and can accept
           somewhat higher annual expenses. Please note, however, that since
           not all DWS funds offer Class B shares, exchange options may be
           limited.

           With Class B shares, you pay no up-front sales charge to the fund.
           Class B shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. This means the annual expenses for
           Class B shares are somewhat higher (and their performance
           correspondingly lower) compared to Class A shares. However, unlike
           Class A shares, your entire investment goes to work immediately.
           After six years, Class B shares automatically convert on a tax-free
           basis to Class A shares, which has the net effect of lowering the
           annual expenses from the seventh year on.

28 | Choosing a Share Class

           Class B shares have a CDSC. This charge declines over the years you
           own shares and disappears completely after six years of ownership.
           But for any shares you sell within those six years, you may be
           charged as follows:

    YEAR AFTER YOU BOUGHT SHARES      CDSC ON SHARES YOU SELL
  First year                           4.00%
  Second or third year                 3.00
  Fourth or fifth year                 2.00
  Sixth year                           1.00
  Seventh year and later               None (automatic conversion to Class A)

           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.

           While Class B shares don't have any front-end sales charge, their
           higher annual expenses mean that over the years you could end up
           paying more than the equivalent of the maximum allowable front-end
           sales charge.

           If you are thinking of making a large purchase in Class B shares or
           if you already own a large amount of Class A shares of the fund or
           other DWS funds, it may be more cost efficient to purchase Class A
           shares instead. Orders to purchase Class B shares of $100,000 or
           more will be declined with the exception of orders received from
           financial representatives acting for clients whose shares are held
           in an omnibus account and certain employer-sponsored employee
           benefit plans.

           Class C shares

           Class C shares may appeal to investors who plan to sell some or all
           of their shares within six years of buying them or who aren't
           certain of their investment time horizon.

           With Class C shares, you pay no up-front sales charge to the fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees, the annual
           expenses for Class C shares are similar to those of Class B shares,
           but higher than those for Class A shares (and the performance of
           Class C shares is correspondingly lower than that of Class A
           shares).

                                                    Choosing a Share Class  | 29

           Unlike Class B shares, Class C shares do NOT automatically convert
           to Class A shares after six years, so they continue to have higher
           annual expenses.

           Class C shares have a CDSC, but only on shares you sell within one
           year of buying them:

   YEAR AFTER YOU BOUGHT SHARES        CDSC ON SHARES YOU SELL
  First year                                    1.00%
  Second year and later                         None

           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.

           While Class C shares do not have an up-front sales charge, their
           higher annual expenses mean that, over the years, you could end up
           paying more than the equivalent of the maximum allowable up-front
           sales charge.

           Orders to purchase Class C shares of $500,000 or more will be
           declined with the exception of orders received from financial
           representatives acting for clients whose shares are held in an
           omnibus account and certain employer-sponsored employee benefit
           plans.

30 | Choosing a Share Class

How to BUY Class A, B and C Shares

 FIRST INVESTMENT                                ADDITIONAL INVESTMENTS
 $1,000 or more for most accounts                $50 or more for regular accounts and
 $500 or more for IRAs                          IRAs
 $500 or more for an account with an            $50 or more for an account with an
 Automatic Investment Plan                      Automatic Investment Plan
 THROUGH A FINANCIAL ADVISOR
 -  To obtain an application, contact your      -  Contact your advisor using the
  advisor                                       method that's most convenient for you
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
 -  Fill out and sign an application            -  Send a check made payable to "DWS
                                                Scudder" and an investment slip to us
 -  Send it to us at the appropriate
  address, along with an investment             -  If you don't have an investment slip,
  check made payable to "DWS                    simply include a letter with your
  Scudder"                                      name, account number, the full name
                                                of the fund and the share class and
                                                your investment instructions
 BY WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY PHONE
 Not available                                  -  Call (800) 621-1048 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on our              -  To set up regular investments from a
  application including a check for the         bank checking account call (800) 621-
  initial investment and a voided check         1048 ($50 minimum)
 USING QuickBuy
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickBuy is set up on your account; if
                                                it is, you can request a transfer from
                                                your bank account of any amount
                                                between $50 and $250,000
 ON THE INTERNET
 Not available                                  -  Call (800) 621-1048 to ensure you have
                                                electronic services
                                                -  Register at www.dws-scudder.com or
                                                log in if already registered
                                                -  Follow the instructions for buying
                                                shares with money from your bank
                                                account

--------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Scudder, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Scudder, PO Box 219154, Kansas City, MO 64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Scudder, 210 West 10th Street, Kansas City, MO 64105-1614

                                        How to Buy Class A, B and C Shares  | 31

How to EXCHANGE or SELL Class A, B and C Shares

 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $1,000 minimum per fund for most
  accounts
  $500 minimum for IRAs
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor using the              -  Contact your advisor by the method
  method that's most convenient for you         that's most convenient for you
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Write a letter that includes:                  Write a letter that includes:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  Call (800) 621-1048 (minimum $50)
  fund account, call (800) 621-1048
 USING QuickSell
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-scudder.com or          -  Register at www.dws-scudder.com or
  log in if already registered                  log in if already registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions

--------------------------------------------------------------------------------

TO REACH US:      WEB SITE: www.dws-scudder.com
                  TELEPHONE REPRESENTATIVE: (800) 621-1048, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m. - 6 p.m. ET

32 | How to Exchange or Sell Class A, B and C Shares

           Financial intermediary support payments

           The Advisor, DWS Scudder 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 fund, 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 fund
           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 fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (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 fund with "shelf space" or
           access to a third party platform or fund offering list or other
           marketing programs, including, without limitation, inclusion of the
           fund 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 fund
           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 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.

                           How to Exchange or Sell Class A, B and C Shares  | 33

           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 fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 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 fund or of
           any particular share class of the fund. 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 fund. Additional information regarding these
           revenue sharing payments is included in the fund'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
           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.

           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

34 | How to Exchange or Sell Class A, B and C Shares

           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.

POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           621-1048.

           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

                                            Policies You Should Know About  | 35

           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 person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated, less any applicable sales charge.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           INITIAL PURCHASE. The minimum initial investment for Class A, B and
           C shares is $1,000, except for investments on behalf of participants
           in certain fee-based and wrap programs offered through certain
           financial intermediaries approved by the Advisor,

36 | Policies You Should Know About

           for which there is no minimum initial investment; and IRAs, for
           which the minimum initial investment is $500 per account. The
           minimum initial investment is $500 per account if you establish an
           automatic investment plan. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. The fund may close your account and send you
           the proceeds if your balance falls below $1,000 ($250 for retirement
           accounts and $500 for accounts with an Automatic Investment Plan
           funded with $50 or more per month in subsequent investments). We
           will give you 60 days' notice (90 days for retirement accounts) so
           you can either increase your balance or close your account (these
           policies don't apply to investors with $100,000 or more in DWS fund
           shares, investors in certain fee-based and wrap programs offered
           through certain financial intermediaries approved by the Advisor, or
           group retirement plans and certain other accounts having lower
           minimum share balance requirements).

           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments in Class A shares on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's 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 fund 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 fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

                                            Policies You Should Know About  | 37

           The fund also reserves the right to reject or cancel a purchase or
           exchange order for any reason without prior notice. For example, the
           fund 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 fund. The fund,
           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 fund's
           shares. The fund may take other trading activity into account if the
           fund 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
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation, but a redemption from a DWS Fund may be
           subject to that DWS Fund's redemption fee policy, to the extent
           applicable.

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

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading

38 | Policies You Should Know About

           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

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

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund 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 fund. (See "How the fund
           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 omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus 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 omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

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

                                            Policies You Should Know About  | 39

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Scudder. You can also use this service to make exchanges and
           to purchase and sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 621-1048.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 621-1048 at a
           later date.

            Since many transactions may be initiated by telephone or
            electronically, it's important to understand that as long as we take
            reasonable steps to ensure that an order to purchase or redeem
            shares is genuine, such as recording calls or requesting
            personalized security codes or other information, we are not
            responsible for any losses that may occur as a result. For
            transactions conducted over the Internet, we recommend the use of a
            secure Internet browser. In addition, you should verify the accuracy
            of your confirmation statements immediately after you receive them.

            THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
            currently have shares in certificated form, you must include the
            share certificates properly endorsed or accompanied by a duly
            executed stock power when exchanging or redeeming shares. You may
            not exchange or redeem shares in certificate form by telephone or
            via the Internet.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.

40 | Policies You Should Know About

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that the fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to the fund.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

            SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
            ACCOUNTS may require additional documentation. Please call (800)
            621-1048 or contact your financial advisor for more information.

            WHEN YOU SELL SHARES THAT HAVE A CDSC, we calculate the CDSC as a
            percentage of what you paid for the shares or what you are selling
            them for - whichever results in the lower charge to you. In
            processing orders to sell shares, the shares with the

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

                                            Policies You Should Know About  | 41

           lowest CDSC are sold first. Exchanges from one fund into another
           don't affect CDSCs; for each investment you make, the date you first
           bought shares is the date we use to calculate a CDSC on that
           particular investment.

           There are certain cases in which you may be exempt from a CDSC.
           These include:

           -  the death or disability of an account owner (including a joint
              owner). This waiver applies only under certain conditions. Please
              contact your financial advisor or Shareholder Services to
              determine if the conditions exist

           -  withdrawals made through an automatic withdrawal plan up to a
              maximum of 12% per year of the net asset value of the account

           -  withdrawals related to certain retirement or benefit plans

           -  redemptions for certain loan advances, hardship provisions or
              returns of excess contributions from retirement plans

           -  for Class A shares purchased through the Large Order NAV Purchase
              Privilege, redemption of shares whose dealer of record at the
              time of the investment notifies the Distributor that the dealer
              waives the applicable commission

           -  for Class C shares, redemption of shares purchased through a
              dealer-sponsored asset allocation program maintained on an
              omnibus record-keeping system, provided the dealer of record has
              waived the advance of the first year distribution and service
              fees applicable to such shares and has agreed to receive such
              fees quarterly

           In each of these cases, there are a number of additional provisions
           that apply in order to be eligible for a CDSC waiver. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU SELL SHARES IN A DWS FUND AND THEN DECIDE TO INVEST WITH DWS
           SCUDDER AGAIN WITHIN SIX MONTHS, you may be able to take advantage
           of the "reinstatement feature." With this feature, you can put your
           money back into the same class of a DWS fund at its current NAV and,
           for purposes of a sales charge, it will be treated as if it had
           never left DWS Scudder.

42 | Policies You Should Know About

           You'll be reimbursed (in the form of fund shares) for any CDSC you
           paid when you sold. Future CDSC calculations will be based on your
           original investment date, rather than your reinstatement date. There
           is also an option that lets investors who sold Class B shares buy
           Class A shares (if available) with no sales charge, although they
           won't be reimbursed for any CDSC they paid. You can only use the
           reinstatement feature once for any given group of shares. To take
           advantage of this feature, contact Shareholder Services or your
           financial advisor.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are other
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes may also be
           delayed when you are selling recently purchased shares or in the
           event of closing of the Federal Reserve Bank's wire payment system.
           In addition, the fund reserves the right to suspend or postpone
           redemptions as permitted pursuant to Section 22(e) of the Investment
           Company Act of 1940. 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 the fund or the fair determination of the value
           of the fund'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. For
           additional rights reserved by the fund, please see "Other rights we
           reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.

                                            Policies You Should Know About  | 43

           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:

            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING

           The price at which you buy shares is based on the NAV per share
           calculated after the order is received by the transfer agent,
           although for Class A shares it will be adjusted to allow for any
           applicable sales charge (see "Choosing a Share Class"). The price at
           which you sell shares is also based on the NAV per share calculated
           on the business day that your order is processed by the transfer
           agent, although a CDSC may be taken out of the proceeds (see
           "Choosing a Share Class").

           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 fund's 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. It is
           expected that the greater the percentage of fund assets that is
           invested in non-US securities, the more extensive will be the fund's
           use of fair value pricing. This is intended to reduce the fund's
           exposure to "time zone arbitrage" and other harmful trading
           practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT THE 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

44 | Policies You Should Know About

           or at times when the 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 fund shares. Price changes in the securities
           the fund owns may ultimately affect the price of fund shares the
           next time the NAV is calculated.)

           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              for federal income tax purposes if we have been notified by the
              IRS that you are subject to backup withholding or if you fail to
              provide us with a correct taxpayer ID number and certain
              certifications including certification that you are not subject
              to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable sales charge or redemption fee, if
              any); you may recognize a gain or loss on the redemption of your
              fund shares and you may incur a tax liability

                                            Policies You Should Know About  | 45

           -  pay you for shares you sell by "redeeming in kind," that is, by
           giving you 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 fund 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 fund's net
           assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or distribution for a given period.

           THE FUND INTENDS TO PAY DIVIDENDS to its shareholders in March,
           June, September and December. Long-term and short-term capital gains
           are paid in December. If necessary the fund may distribute at other
           times as well.

            Dividends or distributions declared to shareholders of record in the
            last quarter of a given calendar year are treated for federal income
            tax purposes as if they were received on December 31 of that year,
            provided such dividends or distributions are paid by the end of the
            following January.

                        For federal income tax purposes, income and capital
                        gains distributions are generally taxable to
                        shareholders. However, dividends and distributions
                        received by retirement plans qualifying for tax
                        exemption under federal income tax laws generally will
                        not be taxable.

                        YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND
                        DISTRIBUTIONS. You can have them all automatically
                        reinvested in fund shares (at NAV), all deposited
                        directly to your bank account or all sent to you by
                        check, have one type reinvested and the other sent to
                        you by check or have them invested in

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

46 | Understanding Distributions and Taxes

           a different fund. Tell us your preference on your application. If
           you don't indicate a preference, your dividends and distributions
           will all be reinvested in shares of the fund without a sales charge
           (if applicable). Distributions are treated the same for federal
           income tax purposes whether you receive them in cash or reinvest
           them in additional shares. For employer-sponsored qualified plans,
           and retirement plans, reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:

GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income

TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less

           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's

                                     Understanding Distributions and Taxes  | 47

           recognition of ordinary income and may affect the timing or amount
           of the fund's distributions. If you invest in the fund through a
           taxable account, your after-tax return could be negatively impacted.

           To the extent that the fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause the fund to recognize taxable income in excess
           of the cash generated by such obligations. Thus, the fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities or, generally, from REITs. In addition, the fund must
           meet certain holding period and other requirements with respect to
           the dividend-paying stocks in its portfolio and the shareholder must
           meet certain holding period and other requirements with respect to
           the fund's shares for the lower tax rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

48 | Understanding Distributions and Taxes

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.

                                     Understanding Distributions and Taxes  | 49

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary

           Using the annual fund operating expense ratios presented in the fee
           tables in the fund 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 fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested and that Class B shares convert to
           Class A shares after six years. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables
           reflect the maximum initial sales charge, if any, but do not reflect
           any contingent deferred sales charge or redemption fees, if any,
           which may be payable upon redemption. If contingent deferred sales
           charges or redemption fees, if any, were shown, the "Hypothetical
           Year-End Balance After Fees and Expenses" amounts shown would be
           lower and the "Annual Fees and Expenses" amounts shown would be
           higher. 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 fund 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 fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.

50 | Appendix

DWS Balanced Fund - Class A

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               5.75%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        0.94%             -1.92%       $  9,807.66        $   665.39
   2           10.25%        0.94%              2.06%       $ 10,205.85        $    94.06
   3           15.76%        0.94%              6.20%       $ 10,620.20        $    97.88
   4           21.55%        0.94%             10.51%       $ 11,051.38        $   101.86
   5           27.63%        0.94%             15.00%       $ 11,500.07        $   105.99
   6           34.01%        0.94%             19.67%       $ 11,966.97        $   110.30
   7           40.71%        0.94%             24.53%       $ 12,452.83        $   114.77
   8           47.75%        0.94%             29.58%       $ 12,958.42        $   119.43
   9           55.13%        0.94%             34.85%       $ 13,484.53        $   124.28
  10           62.89%        0.94%             40.32%       $ 14,032.00        $   129.33
  TOTAL                                                                        $ 1,663.30

DWS Balanced Fund - Class B

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        1.91%              3.09%       $ 10,309.00        $   193.95
   2           10.25%        1.91%              6.28%       $ 10,627.55        $   199.94
   3           15.76%        1.91%              9.56%       $ 10,955.94        $   206.12
   4           21.55%        1.91%             12.94%       $ 11,294.48        $   212.49
   5           27.63%        1.91%             16.43%       $ 11,643.48        $   219.06
   6           34.01%        1.91%             20.03%       $ 12,003.26        $   225.83
   7           40.71%        0.94%             24.91%       $ 12,490.59        $   115.12
   8           47.75%        0.94%             29.98%       $ 12,997.71        $   119.80
   9           55.13%        0.94%             35.25%       $ 13,525.42        $   124.66
  10           62.89%        0.94%             40.75%       $ 14,074.55        $   129.72
  TOTAL                                                                        $ 1,746.69

                                                                  Appendix  | 51

DWS Balanced Fund - Class C

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        1.77%              3.23%       $ 10,323.00        $   179.86
   2           10.25%        1.77%              6.65%       $ 10,656.43        $   185.67
   3           15.76%        1.77%             10.01%       $ 11,000.64        $   191.67
   4           21.55%        1.77%             13.56%       $ 11,355.96        $   197.86
   5           27.63%        1.77%             17.23%       $ 11,722.75        $   204.25
   6           34.01%        1.77%             21.01%       $ 12,101.40        $   210.84
   7           40.71%        1.77%             24.92%       $ 12,494.27        $   217.65
   8           47.75%        1.77%             28.96%       $ 12,895.77        $   224.68
   9           55.13%        1.77%             33.12%       $ 13,312.31        $   231.94
  10           62.89%        1.77%             37.42%       $ 13,742.30        $   239.43
  TOTAL                                                                        $ 2,083.85

52 | Appendix

TO GET MORE INFORMATION

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

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund'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 fund, call (800) 621-1048, or contact DWS Scudder at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about the fund 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 fund,
including the fund'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.

DWS SCUDDER              SEC                     DISTRIBUTOR
---------------------    --------------------    -------------------------------
PO Box 219151            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9151               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 621-1048           (800) SEC-0330

SEC FILE NUMBER:
                        DWS Balanced Fund    811-01236

(04/01/08) DBF-1
[RECYCLE GRAPHIC APPEARS HERE]

                                                                       [Logo]DWS
                                                                         SCUDDER
                                                             Deutsche Bank Group

 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS:

                            ------------------------

DWS Alternative Asset Allocation          DWS Global Opportunities Fund         DWS Micro Cap Fund
  Plus Fund                               DWS Global Thematic Fund              DWS Mid Cap Growth Fund
DWS Balanced Fund                         DWS GNMA Fund                         DWS New York Tax-Free Income Fund
DWS Blue Chip Fund                        DWS Gold & Precious Metals Fund       DWS RREEF Global Infrastructure Fund
DWS California Tax-Free Income Fund       DWS Growth & Income Fund              DWS RREEF Global Real Estate
DWS Capital Growth Fund                   DWS Health Care Fund                    Securities Fund
DWS Climate Change Fund                   DWS High Income Fund                  DWS RREEF Real Estate Securities Fund
DWS Commodity Securities Fund             DWS High Income Plus Fund             DWS S&P 500 Index Fund
DWS Communications Fund                   DWS Inflation Protected Plus Fund     DWS Select Alternative Allocation Fund
DWS Core Fixed Income Fund                DWS Intermediate Tax/AMT Free Fund    DWS Short Duration Fund
DWS Core Plus Allocation Fund             DWS International Fund                DWS Short Duration Plus Fund
DWS Core Plus Income Fund                 DWS International Select Equity Fund  DWS Short-Term Municipal Bond Fund
DWS Disciplined Long/Short Growth Fund    DWS International Value               DWS Small Cap Core Fund
DWS Disciplined Long/Short Value Fund       Opportunities Fund                  DWS Small Cap Growth Fund
DWS Disciplined Market Neutral Fund       DWS Japan Equity Fund                 DWS Strategic Government Securities Fund
DWS Dreman Concentrated Value Fund        DWS Large Cap Value Fund              DWS Strategic High Yield Tax Free Fund
DWS Dreman High Return Equity Fund        DWS Large Company Growth Fund         DWS Strategic Income Fund
DWS Dreman Mid Cap Value Fund             DWS Latin America Equity Fund         DWS Target 2010 Fund
DWS Dreman Small Cap Value Fund           DWS LifeCompass 2015 Fund             DWS Target 2011 Fund
DWS EAFE(R) Equity Index Fund             DWS LifeCompass 2020 Fund             DWS Target 2012 Fund
DWS Emerging Markets Equity Fund          DWS LifeCompass 2030 Fund             DWS Target 2013 Fund
DWS Emerging Markets Fixed Income Fund    DWS LifeCompass 2040 Fund             DWS Target 2014 Fund
DWS Enhanced S&P 500 Index Fund           DWS LifeCompass Income Fund           DWS Technology Fund
DWS Equity 500 Index Fund                 DWS LifeCompass Protect Fund          DWS U.S. Bond Index Fund
DWS Equity Income Fund                    DWS LifeCompass Retirement Fund       DWS Value Builder Fund
DWS Equity Partners Fund                  DWS Lifecycle Long Range Fund
DWS Europe Equity Fund                    DWS Managed Municipal Bond Fund
DWS Floating Rate Plus Fund               DWS Massachusetts Tax-Free Fund
DWS Global Bond Fund

--------------------------------------------------------------------------------

The following information replaces similar disclosure regarding the schedule for
posting portfolio holdings in the "Other Policies and Risks -- For more
information" section of each fund's prospectus:

A complete list of the fund's portfolio holdings is posted as of the month end
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.

               Please Retain This Supplement for Future Reference

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group
October 27, 2008
DMF-3682

    SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED
                                FUNDS/PORTFOLIOS:

                             ----------------------

 Cash Account Trust:                          DWS Floating Rate Plus Fund                 DWS Mid Cap Growth Fund
   Government & Agency Securities Portfolio   DWS Global Bond Fund                        DWS Money Market Prime Series
   Money Market Portfolio                     DWS Global Opportunities Fund               DWS Money Market Series
   Tax-Exempt Portfolio                       DWS Global Thematic Fund                    DWS New York Tax-Free Income Fund
 DWS Alternative Asset Allocation Plus Fund   DWS GNMA Fund                               DWS RREEF Global Infrastructure Fund
 DWS Balanced Fund                            DWS Gold & Precious Metals Fund             DWS RREEF Global Real Estate Securities
 DWS Blue Chip Fund                           DWS Growth & Income Fund                      Fund
 DWS California Tax-Free Income Fund          DWS Health Care Fund                        DWS RREEF Real Estate Securities Fund
 DWS Capital Growth Fund                      DWS High Income Fund                        DWS S&P 500 Index Fund
 DWS Climate Change Fund                      DWS High Income Plus Fund                   DWS Short Duration Fund
 DWS Commodity Securities Fund                DWS Inflation Protected Plus Fund           DWS Short Duration Plus Fund
 DWS Communications Fund                      DWS Intermediate Tax/AMT Free Fund          DWS Short-Term Municipal Bond Fund
 DWS Core Fixed Income Fund                   DWS International Fund                      DWS Small Cap Core Fund
 DWS Core Plus Allocation Fund                DWS International Select Equity Fund        DWS Small Cap Growth Fund
 DWS Core Plus Income Fund                    DWS International Value Opportunities       DWS Strategic Government Securities Fund
 DWS Disciplined Long/Short Growth Fund         Fund                                      DWS Strategic High Yield Tax Free Fund
 DWS Disciplined Long/Short Value Fund        DWS Japan Equity Fund                       DWS Strategic Income Fund
 DWS Disciplined Market Neutral Fund          DWS Large Cap Value Fund                    DWS Target 2010 Fund
 DWS Dreman Concentrated Value Fund           DWS Large Company Growth Fund               DWS Target 2011 Fund
 DWS Dreman High Return Equity Fund           DWS Latin America Equity Fund               DWS Target 2012 Fund
 DWS Dreman Mid Cap Value Fund                DWS LifeCompass 2015 Fund                   DWS Target 2013 Fund
 DWS Dreman Small Cap Value Fund              DWS LifeCompass 2020 Fund                   DWS Target 2014 Fund
 DWS EAFE(R) Equity Index Fund                  DWS LifeCompass 2030 Fund                   DWS Technology Fund
 DWS Emerging Markets Equity Fund             DWS LifeCompass 2040 Fund                   DWS U.S. Bond Index Fund
 DWS Emerging Markets Fixed Income Fund       DWS LifeCompass Income Fund                 DWS Value Builder Fund
 DWS Enhanced S&P 500 Index Fund              DWS LifeCompass Protect Fund                Investors Cash Trust:
 DWS Equity 500 Index Fund                    DWS LifeCompass Retirement Fund               Treasury Portfolio
 DWS Equity Income Fund                       DWS Lifecycle Long Range Fund               Tax-Exempt California Money Market Fund
 DWS Equity Partners Fund                     DWS Managed Municipal Bond Fund
 DWS Europe Equity Fund                       DWS Massachusetts Tax-Free Fund
                                              DWS Micro Cap Fund
------------------------------------------------------------------------------------------------------------------------------------

On or about  September 25, 2008,  the  following  information  replaces  similar
disclosure under "Policies about  transactions" in the "Policies You Should Know
About" section of each fund's/portfolio's prospectuses:

Each  fund/portfolio  accepts  payment  for shares only in US dollars by a check
drawn on a US bank, a bank or Federal Funds wire transfer or an electronic  bank
transfer.  A  fund/portfolio  does not accept third party checks.  A third party
check is a check made  payable to one or more  parties and offered as payment to
one or more other parties  (e.g.,  a check made payable to you that you offer as
payment to someone else).  Checks should  normally be payable to DWS Investments
and drawn by you or a  financial  institution  on your  behalf with your name or
account number included with the check.

               Please Retain This Supplement for Future Reference

                                                          [DWS INVESTMENTS LOGO]
                                                             Deutsche Bank Group

September 25, 2008
DMF-3671R

               SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES:

                                -----------------

                                DWS Balanced Fund
                          DWS Lifecycle Long Range Fund

The following individual has replaced Matthias Knerr as a portfolio manager for
each of the above-listed funds. The following biographical information replaces
that for Mr. Knerr in the "Portfolio management" section of each fund's
prospectuses:

  Joseph Axtell, CFA
  Managing Director of Deutsche Asset Management and Portfolio
  Manager of the fund.
    o Joined Deutsche Asset Management in 2001 and the fund in 2008.
    o Senior analyst at Merrill Lynch Investment Managers for the
      international equity portion of a global balanced portfolio
      (1996-2001).
    o Director, International Research at PCM International
      (1989-1996).
    o Associate manager, structured debt and equity group at
      Prudential Capital Corporation (1988-1989).
    o Analyst at Prudential-Bache Capital Funding in London
      (1987-1988).
    o Equity analyst in the healthcare sector at Prudential Equity
      Management Associates (1985-1987).
    o B.S., Carlson School of Management, University of Minnesota.

The following individual has been named consultant to the funds' advisor,
Deutsche Investment Management Americas Inc. (the "Advisor").

  Michael Sieghart, CFA
  Managing Director of DWS Investment GmbH: Frankfurt and
  consultant to the Advisor.
    o Joined DWS Investment GmbH: Frankfurt in 1997.
    o Senior fund manager of global and European equities: Frankfurt.
    o Master's degree in finance and economics from the University
      of Economics and Business Administration, Vienna.

               Please Retain This Supplement for Future Reference

                                                          [DWS INVESTMENTS LOGO]
                                                             Deutsche Bank Group

August 19, 2008
DMF-3676

           SUPPLEMENT TO THE CURRENTLY EFFECTIVE INSTITUTIONAL CLASS
               PROSPECTUS OF EACH OF THE LISTED FUNDS/PORTFOLIOS:

                             ----------------------

Cash Reserve Fund, Inc.:                    DWS Dreman Small Cap Value Fund             DWS Large Company Growth Fund
  Prime Series                              DWS EAFE(R) Equity Index Fund               DWS Lifecycle Long Range Fund
DWS Alternative Asset Allocation Plus Fund  DWS Emerging Markets Equity Fund            DWS LifeCompass Income Fund
Cash Management Fund Institutional          DWS Emerging Markets Fixed Income Fund      DWS LifeCompass Protect Fund
DWS Balanced Fund                           DWS Equity 500 Index Fund                   DWS Managed Municipal Bond Fund
DWS Blue Chip Fund                          DWS Equity Income Fund                      DWS Micro Cap Fund
DWS Capital Growth Fund                     DWS Equity Partners Fund                    DWS Mid Cap Growth Fund
DWS Climate Change Fund                     DWS Europe Equity Fund                      DWS Money Market Series
DWS Commodity Securities Fund               DWS Floating Rate Plus Fund                 DWS RREEF Global Real Estate Securities
DWS Communications Fund                     DWS Gold & Precious Metals Fund             Fund
DWS Core Fixed Income Fund                  DWS Growth & Income Fund                    DWS RREEF Global Infrastructure Fund
DWS Core Plus Allocation Fund               DWS Health Care Fund                        DWS RREEF Real Estate Securities Fund
DWS Core Plus Income Fund                   DWS High Income Fund                        DWS Short Duration Fund
DWS Disciplined Long/Short Growth Fund      DWS High Income Plus Fund                   DWS Short-Term Municipal Bond Fund
DWS Disciplined Long/Short Value Fund       DWS Inflation Protected Plus Fund           DWS Small Cap Growth Fund
DWS Disciplined Market Neutral Fund         DWS Intermediate Tax/AMT Free Fund          DWS Strategic Government Securities Fund
DWS Dreman Concentrated Value Fund          DWS International Fund                      DWS Strategic High Yield Tax Free Fund
DWS Dreman High Return Equity Fund          DWS International Select Equity Fund        DWS Technology Fund
DWS Dreman Mid Cap Value Fund               DWS International Value Opportunities Fund  DWS U.S. Bond Index Fund
                                            DWS Large Cap Value Fund                    DWS Value Builder Fund

--------------------------------------------------------------------------------

On or about July 25, 2008, the following information replaces in its entirety
the disclosure under "Investment minimums" in the "Buying and Selling
Institutional Class Shares" section of each fund's/portfolio's Institutional
Class prospectus:

Investment minimums

Your initial investment must be for at least $1,000,000. There are no minimum
subsequent investment requirements. The minimum initial investment is waived
for:

o  Shareholders with existing accounts prior to August 13, 2004 who met the
   previous minimum investment eligibility requirement.

o  Investment advisory affiliates of Deutsche Bank Securities, Inc., DWS funds
   or Deutsche funds purchasing shares for the accounts of their investment
   advisory clients.

o  Employee benefit plans with assets of at least $50 million.

o  Clients of the private banking division of Deutsche Bank AG.

o  Institutional clients and qualified purchasers that are clients of a division
   of Deutsche Bank AG.

o  A current or former director or trustee of the Deutsche or DWS mutual funds.

o  An employee, the employee's spouse or life partner and children or
   stepchildren age 21 or younger of Deutsche Bank or its affiliates or a
   sub-advisor to any fund in the DWS family of funds or a broker-dealer
   authorized to sell shares of the funds.

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group

July 25, 2008
DMF-3672

o  For DWS Capital Growth Fund, DWS Core Fixed Income Fund, DWS Dreman High
   Return Equity Fund and DWS Dreman Small Cap Value Fund only: Shareholders
   with existing Institutional Class accounts prior to July 23, 2007 who
   purchased shares through certain broker-dealers authorized to sell shares of
   the funds.

o  Registered investment advisors who trade through platforms approved by the
   Advisor and whose client assets in the aggregate meet or, in the Advisor's
   judgment, will meet within a reasonable period of time, the $1,000,000
   minimum investment.

o  Employee benefit plan platforms approved by the Advisor that invest in the
   fund through an omnibus account, and that meet, or in the Advisor's judgment,
   will meet within a reasonable period of time, the $1,000,000 minimum
   investment.

Each fund reserves the right to modify the above eligibility requirements and
investment minimums at any time. In addition, each Fund, in its discretion, may
waive the minimum initial investment for specific employee benefit plans (or
family of plans) whose aggregate investment in Institutional Class shares of the
Fund equals or exceeds the minimum initial investment amount but where a
particular account or program may not on its own meet such minimum amount.

               Please Retain This Supplement for Future Reference

July 25, 2008
DMF-3672

               SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES

                                 -----------------

DWS Balanced Fund                        DWS Lifecycle Long Range Fund
DWS Blue Chip Fund                       DWS Small Cap Value Fund
DWS Growth & Income Fund                 DWS Target 2010 Fund
DWS Disciplined Market Neutral Fund      DWS Target 2011 Fund
DWS Disciplined Long/Short Value Fund    DWS Target 2012 Fund
DWS Disciplined Long/Short Growth Fund   DWS Target 2013 Fund
                                         DWS Target 2014 Fund

--------------------------------------------------------------------------------

Effective on or about July 1, 2008, James B. Francis will replace Jin Chen as a
portfolio manager for each of the above-listed funds. The following biographical
information for Mr. Francis replaces that for Ms. Chen in the "Portfolio
Management" section of each fund's prospectuses:

  James B. Francis, CFA
  Director of Deutsche Asset Management
  and Portfolio Manager of the fund.
    o Head of Active Quantitative Equity
      Portfolio Management: New York.
    o Joined Deutsche Asset Management
      in 2008 after 20 years of
      experience as senior quantitative
      global equity portfolio manager at
      State Street Global Advisors, and
      most recently, Northern Trust
      Global Investments.
    o BS in Applied Mathematics from
      University of Massachusetts,
      Amherst.

               Please Retain This Supplement for Future Reference

June 20, 2008
DMF-3668

                                                              [DWS SCUDDER LOGO]
                                                             Deutsche Bank Group

                    MARCH 1, 2008, AS REVISED APRIL 1, 2008

                                   PROSPECTUS
                              ------------------
                              INSTITUTIONAL CLASS

                               DWS BALANCED FUND

As with all mutual funds, 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.

                            ONE GLOBAL FORCE. ONE FOCUS. YOU. [DWS SCUDDER Logo]
                                                             Deutsche Bank Group

CONTENTS

HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  5      The Main Risks of Investing in
         the Fund
 10      The Fund's Performance
         History
 13      How Much Investors Pay
 14      Other Policies and Risks
 15      Who Manages and Oversees
         the Fund
 20      Financial Highlights

HOW TO INVEST IN THE FUND
 22      Buying and Selling
         Institutional Class Shares
 28      Policies You Should Know
         About
 37      Understanding Distributions
         and Taxes
 41      Appendix

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-SCUDDER.COM (the Web
site does not form a part of this prospectus).

                           Institutional Class
  ticker symbol            KTRIX
    fund number            1402

    DWS BALANCED FUND

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks the highest total return, a combination of income
            and capital appreciation, consistent with reasonable risk.

            The fund can buy many types of securities, among them common
            stocks, convertible securities, corporate bonds, US government
            bonds, mortgage- and asset-backed securities and certain
            derivatives. The fund normally invests approximately 60% of its net
            assets in common stocks and other equity securities and
            approximately 40% of its net assets in fixed-income securities,
            including lower-quality, high-yield debt securities. These
            percentages may fluctuate in response to changing market
            conditions, but the fund will at all times invest at least 25% of
            net assets in fixed-income senior securities. Generally, most
            securities are from US issuers, but the fund may invest up to 25%
            of total assets in foreign securities.

            The Advisor allocates the fund's assets among various asset
            categories including growth and value stocks of large
            capitalization companies, small capitalization companies and
            investment-grade and high-yield debt securities. The Advisor
            reviews the fund's allocation among the various asset categories
            periodically and may adjust the fund's allocation among various
            asset categories based on current or expected market conditions or
            to manage risk as is consistent with the fund's overall investment
            strategy.

            The Advisor uses one or more strategies within each asset category
            for selecting equity and debt securities for the fund's portfolio.
            Each strategy is managed by a team of portfolio managers that
            specialize in a respective asset category. The strategies that the
            Advisor may implement utilize a variety of quantitative and
            qualitative techniques.

4 | DWS Balanced Fund

            IGAP STRATEGY. In addition to the fund'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-term and medium-term mispricings within global
            bond, equity 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 bonds and equity
            indexes and over-the-counter forward currency contracts, and is
            expected to have a low correlation to the fund's other securities
            holdings. Because the iGAP strategy relies primarily on futures,
            forward currency contracts and other derivative instruments, the
            aggregate notional market exposure obtained from such investments
            within the iGAP strategy may range up to 100% of the net assets of
            the fund (assuming the maximum allocation to the iGAP strategy).

            SECURITIES LENDING. The fund 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.

            DERIVATIVES. In addition to derivatives utilized within the iGAP
            strategy, the portfolio managers may, but are not required to, also
            use various types of derivatives. Derivatives may be used for
            hedging and for risk management or non-hedging purposes to enhance
            potential gains. The fund may use derivatives in circumstances
            where the portfolio managers believe they offer a more efficient or
            economical means of gaining exposure to a particular asset class or
            market or to maintain a high level of liquidity to meet shareholder
            redemptions or other needs while maintaining exposure to the
            market. The portfolio managers may use futures, options, forward
            currency transactions and swaps.

            THE MAIN RISKS OF INVESTING IN THE FUND

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

                                                          DWS Balanced Fund  | 5

            ASSET ALLOCATION RISK. Although asset allocation among different
            asset categories generally reduces risk and exposure to any one
            category, the risk remains that the Advisor may favor an asset
            category that performs poorly relative to the other asset
            categories. Because the fund employs more than one team of
            portfolio managers to manage each strategy within the asset
            categories in which the fund's assets are allocated, it is possible
            that different portfolio management teams could be purchasing or
            selling the same security at the same time which could affect the
            price at which the fund pays, or receives, for a particular
            security. In addition, it is possible that as one team of portfolio
            managers is purchasing a security another team of portfolio
            managers could be selling the same security resulting in no
            significant change in the overall assets of the fund but incurring
            additional costs for the fund. Further, because the Advisor may
            periodically adjust the fund's allocation among various asset
            categories, the fund may incur additional costs associated with
            portfolio turnover.

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund'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 fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

                       INDUSTRY RISK. While the fund does not concentrate in
                       any industry or sector, to the extent that the fund has
                       exposure to a given industry or sector, any factors
                       affecting that industry or sector could affect the value
                       of portfolio securities. For example, manufacturers of
                       consumer goods could be hurt by a rise in unemployment
                       or technology companies could be hurt by such factors as
                       market saturation, price competition and rapid
                       obsolescence.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

This fund is designed for investors interested in asset class diversification in
a single fund that invests in a mix of stocks and bonds.

6 | DWS Balanced Fund

            CREDIT RISK. A fund purchasing bonds faces the risk that the
            creditworthiness of an issuer may decline, causing the value of the
            bonds to decline. In addition, an issuer may not be able to make
            timely payments on the interest and/or principal on the bonds it
            has issued. Because the issuers of high-yield bonds or junk bonds
            (bonds rated below the fourth highest category) may be in uncertain
            financial health, the prices of these bonds may be more vulnerable
            to bad economic news or even the expectation of bad news, than
            investment-grade bonds. In some cases, bonds, particularly
            high-yield bonds, may decline in credit quality or go into default.
            Because the fund may invest in securities not paying current
            interest or in securities already in default, these risks may be
            more pronounced.

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the
            effective maturity of the fund's securities, the more sensitive the
            fund 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 decline, the issuers of securities
            held by the fund may prepay principal earlier than scheduled,
            forcing the fund to reinvest in lower-yielding securities.
            Prepayment may reduce the fund'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, increasing the fund's
            duration and reducing the value of such a security. Because the
            fund may invest in mortgage-related securities, it is more
            vulnerable to both of these risks.

            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 large companies. Small company stocks are typically
            less liquid than large company stocks. Accordingly, it may be
            harder to find buyers for small company shares.

            FOREIGN INVESTMENT RISK. To the extent the fund has exposure to
            companies based outside the US, it faces the risks inherent in
            foreign investing. Adverse political, economic or social
            developments could undermine the value of the

                                                          DWS Balanced Fund  | 7

            fund's investments or prevent the fund from realizing their full
            value. Financial reporting standards for companies based in foreign
            markets differ from those in the US. Additionally, foreign
            securities markets generally are smaller and less liquid than the
            US markets. These risks tend to be greater in emerging markets so,
            to the extent the fund invests in emerging markets, it takes on
            greater risks. The currency of a country in which the fund has
            invested could decline relative to the value of the US dollar,
            which decreases the value of the investment to US investors. The
            investments of the fund may be subject to foreign withholding
            taxes.

            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 fund may be
            significant and may exceed the intended level of market exposure
            for the iGAP strategy.

            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
            fund 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 fund to the effects of leverage, which
            could increase the fund'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 fund. The use of
            derivatives by the fund to hedge risk may reduce the opportunity
            for gain by offsetting the positive effect of favorable price
            movements.

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund'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 fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

8 | DWS Balanced Fund

            Other factors that could affect performance include:

            -  portfolio management could be wrong in the analysis of
               industries, companies, economic trends, the relative
               attractiveness of different securities or other matters.

            -  at times, market conditions might make it hard to value some
               investments or to get an attractive price for them.

            -  the Advisor measures credit quality at the time it buys
               securities, using independent rating agencies or, for unrated
               securities, the Advisor's own credit quality standards. If a
               security's credit quality declines, the Advisor will decide what
               to do with the security, based on the circumstances and its
               assessment of what would benefit shareholders most.

                                                          DWS Balanced Fund  | 9

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Institutional Class
shares has varied from year to year, which may give some idea of risk. The
table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The performance of both the fund and the index varies over time. All
figures assume reinvestment of dividends and distributions (in the case of
after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Institutional Class shares on a before-tax and
after-tax basis. After-tax returns are estimates calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

DWS Balanced Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Institutional Class

[GRAPHIC APPEARS HERE]

16.79      15.08       -2.63      -6.30      -15.44     17.61       6.57      4.21     10.19      4.76
1998       1999       2000       2001        2002       2003       2004      2005      2006       2007

FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 12.47%, Q4 1998              WORST QUARTER: -9.92%, Q2 2002

10 | DWS Balanced Fund

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007

                                              1 YEAR      5 YEARS      10 YEARS
 INSTITUTIONAL CLASS
   Return before Taxes                          4.76         8.56        4.57
   Return after Taxes on Distributions          3.73         7.77        3.22
   Return after Taxes on Distributions
   and Sale of Fund Shares                      3.42         7.04        3.25*
 S&P 500 (reflects no deductions for
 fees, expenses or taxes)                       5.49        12.83        5.91
 RUSSELL 1000 INDEX (reflects no
 deductions for fees, expenses or
 taxes)                                         5.77        13.43        6.20
 RUSSELL 2000 INDEX (reflects no
 deductions for fees, expenses or
 taxes)                                        -1.57        16.25        7.08
 LEHMAN BROTHERS U.S AGGREGATE
 INDEX (reflects no deductions for fees,
 expenses or taxes)                            6.97          4.42        5.97
 MSCI EAFE INDEX (reflects no
 deductions for fees, expenses or
 taxes)                                       11.17         21.59        8.66
 CREDIT SUISSE HIGH YIELD INDEX
 (reflects no deductions for fees,
 expenses or taxes)                            2.65         10.97        6.10
 MERRILL LYNCH 3-MONTH US TREASURY
 BILL INDEX (reflects no deductions for
 fees, expenses or taxes)                      5.03          3.07        3.77

     Total returns would have been lower had certain expenses not been reduced.

 *Return after Taxes on Distributions and Sale of Fund Shares is higher than
 other return figures for the same period due to a capital loss occurring upon
 redemption resulting in an assumed tax deduction for the shareholder.

 The Russell 1000 Index replaces the S&P 500 as the fund's benchmark index for
 equity investments because the Advisor believes that it more accurately
 reflects the fund's investment strategy.

 STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged, capitalization-weighted
 index of 500 stocks. The index is designed to measure performance of the broad
 domestic economy through changes in the aggregate market value of 500 stocks
 representing all major industries.

 RUSSELL 1000 (Reg. TM) INDEX is an unmanaged price-only index of the 1,000
 largest capitalized companies that are domiciled in the US and whose common
 stocks are traded.

 RUSSELL 2000 (Reg. TM) INDEX is an unmanaged capitalization-weighted measure
 of approximately 2,000 small US stocks.

 LEHMAN BROTHERS U.S. AGGREGATE INDEX is an unmanaged market value-weighted
 measure of Treasury issues, agency issues, corporate bond issues and mortgage
 securities.

                                                         DWS Balanced Fund  | 11

 MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, AUSTRALASIA AND THE FAR
 EAST (EAFE) INDEX is an unmanaged index that tracks international stock
 performance in the 21 developed markets of Europe, Australasia and the Far
 East.

 CREDIT SUISSE HIGH YIELD INDEX is an unmanaged trader-priced portfolio,
 constructed to mirror the global high-yield debt market.

 MERRILL LYNCH 3-MONTH US TREASURY BILL INDEX is an unmanaged index capturing
 the performance of a single issue maturing closest to, but not exceeding,
 three months from the re-balancing date.

--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-scudder.com.

--------------------------------------------------------------------------------
RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.

RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.

12 | DWS Balanced Fund

HOW MUCH INVESTORS PAY

The table below describes the fees and expenses that you may pay if you buy and
hold fund shares. This information doesn't include any fees that may be charged
by your financial advisor.

FEE TABLE
 SHAREHOLDER FEES, paid directly from your          None
 investment

 ANNUAL OPERATING EXPENSES, deducted from
 fund assets
 Management Fees                                     0.47%
 Distribution and/or Service (12b-1) Fees           None
 Other Expenses                                      0.21
 Underlying Fund Expenses1                           0.02
 TOTAL ANNUAL OPERATING EXPENSES2                    0.70

1   The amount indicated is based on the indirect net expenses associated with
   the fund's investment in underlying funds for the fiscal year ended October
   31, 2007.

2   Through March 13, 2008, the Advisor has contractually agreed to waive all
   or a portion of its management fee and reimburse or pay operating expenses
   of the fund to the extent necessary to maintain the fund's total operating
   expenses at 0.61% for Institutional Class shares, excluding certain
   expenses such as extraordinary expenses, taxes, brokerage, interest and
   indirect expenses of underlying funds.

Based on the costs above, this example helps you compare the expenses of the
fund 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 and reinvested all dividends and distributions. This is only an
example; actual expenses will be different.

EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
 Institutional Class         $72         $224         $390         $871

                                                         DWS Balanced Fund  | 13

OTHER POLICIES AND RISKS

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

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

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities or
              other short-term securities that offer comparable levels of risk.
              This could prevent losses, but, while engaged in a temporary
              defensive position, the fund will not be pursuing its investment
              objective. However, portfolio management may choose not to use
              these strategies for various reasons, even in volatile market
              conditions.

           -  The fund may trade actively. This could raise transaction costs
              (thus lowering return) and could mean distributions at higher tax
              rates.

           For more information

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

           If you want more information on the fund'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 fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings is posted as of the
           month-end on www.dws-scudder.com (the Web site does not form a part
           of this prospectus) on or after the last day of the following month.
           This posted information generally remains accessible at least until
           the date on which the fund 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. In addition, the
           fund's top ten equity

14 | Other Policies and Risks

           holdings and other fund information is posted on www.dws-scudder.com
           as of the calendar quarter-end on or after the 15th day following
           quarter-end. The fund's Statement of Additional Information includes
           a description of the fund's policies and procedures with respect to
           the disclosure of the fund's portfolio holdings.

WHO MANAGES AND OVERSEES THE FUND

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund 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.

                                         Who Manages and Oversees the Fund  | 15

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.

FUND NAME                          FEE PAID
  DWS Balanced Fund                  0.47%

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the most
           recent shareholder reports for the annual period ended October 31
           (see "Shareholder reports" on the back cover).

           The Subadvisor

           The subadvisor for the fund is Deutsche Asset Management
           International GmbH ("DeAMi"), Mainzer Landstrasse 178-190, Frankfurt
           am Main, Germany. DeAMi renders investment advisory and management
           services to a portion of the fund's large cap value allocation.
           DeAMi is an investment advisor registered with the SEC and currently
           manages over $60 billion in assets, which is primarily comprised of
           institutional accounts and investment companies. DeAMi is a
           subsidiary of Deutsche Bank AG. DIMA compensates DeAMi out of the
           management fee it receives from the fund.

           A discussion regarding the basis for the Board's approval of the
           subadvisory agreement will be contained in the semiannual report for
           the period ended April 30, 2008.

16 | Who Manages and Oversees the Fund

Portfolio management

DWS Balanced Fund is managed by separate teams of investment professionals who
develop and implement each strategy within a particular asset category which
together make up the fund's overall investment strategy. Each portfolio
management team has authority over all aspects of the portfolio of the fund's
investment portfolio allocated to it, including, but not limited to, purchases
and sales of individual securities, portfolio construction techniques,
portfolio risk assessment and the management of daily cash flows in accordance
with portfolio holdings.

DWS BALANCED FUND

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

William Chepolis, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1998 after 13 years of experience as
   vice president and portfolio manager for Norwest Bank, where he managed the
   bank's fixed income and foreign exchange portfolios.
-  Portfolio Manager for Retail Mortgage Backed Securities: New York.
-  Joined the fund in 2005.
-  BIS, University of Minnesota.

Matthew F. MacDonald
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Joined Deutsche Asset Management and the fund in 2006 after 14 years of
   fixed income experience at Bank of America Global Structured Products and
   PPM America, Inc., where he was portfolio manager for public fixed income,
   including MBS, ABS, CDOs and corporate bonds; earlier, as an analyst for
   MBS, ABS and money markets; and originally, at Duff & Phelps Credit Rating
   Company.
-  Portfolio Manager for Retail Mortgage Backed Securities: New York.
-  BA, Harvard University; MBA, University of Chicago Graduate School of
   Business.

Inna Okounkova
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Global Asset Allocation Portfolio Manager: New York.
-  Joined Deutsche Asset Management in 1999 as a quantitative analyst, becoming
   an associate Portfolio Manager in 2001.
-  Joined the fund in 2005.
-  BS, MS, Moscow State University; MBA, University of Chicago.

Gary Sullivan, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management in 1996 and the fund in 2006. Served as the
   head of the High Yield group in Europe and as an Emerging Markets portfolio
   manager.
-  Prior to that, four years at Citicorp as a research analyst and structurer
   of collateralized mortgage obligations. Prior to Citicorp, served as an
   officer in the US Army from 1988 to 1991.
-  BS, United States Military Academy (West Point); MBA, New York University,
   Stern School of Business.

                                         Who Manages and Oversees the Fund  | 17

Julie M. Van Cleave, CFA
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Joined Deutsche Asset Management and the fund in 2002.
-  Head of Large Cap Growth Portfolio Selection Team.
-  Previous experience includes 18 years of investment industry experience at
   Mason Street Advisors, as Managing Director and team leader for the large
   cap investment team.
-  BBA, MBA, University of Wisconsin - Madison.

Robert Wang
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
-  Global Asset Allocation Senior Portfolio Manager: New York.
-  Joined Deutsche Asset Management in 1995 as a senior fixed income portfolio
   manager after 13 years of experience at J.P. Morgan & Co. trading fixed
   income, derivatives and foreign exchange products.
-  Joined the fund in 2005.
-  BS, The Wharton School, University of Pennsylvania.

Thomas Picciochi
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Senior portfolio manager for Quantitative strategies: New York.
-  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.
-  Joined the fund in 2007.
-  BA and MBA, University of Miami.

     Jin Chen
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Senior portfolio manager for Global strategies: New York.
-  Joined Deutsche Asset Management in 1999; prior to that, served as portfolio
   manager for Absolute Return Strategies and as a fundamental equity analyst
   and portfolio manager for Thomas White Asset Management.
-  Joined the fund in 2007.
-  BS, Nanjing University; MS, Michigan State University.

Julie Abbett
Director of Deutsche Asset Management and Portfolio Manager of the fund.
-  Senior portfolio manager for Global Quantitative Equity: New York.
-  Joined Deutsche Asset Management in 2000 after four years of combined
   experience as a consultant with equity trading services for BARRA, Inc. and
   a product developer for FactSet Research.
-  Joined the fund in 2007.
-  BA, University of Connecticut.

Matthias Knerr, CFA
Managing Director, Deutsche Asset Management and Portfolio Manager of the fund.

-  Joined Deutsche Asset Management in 1995 as a member of the International
   Equity team, serving as portfolio manager and investment analyst, and;
   joined the fund in 2007.
-  Senior portfolio manager for International Select Equity and International
   Equity Strategies: New York.
-  Previously served as portfolio manager for the Deutsche European Equity Fund
   and the Deutsche Global Select Equity Fund, and as head of global equity
   research team for Capital Goods sector: London.
-  BS, Pennsylvania State University.

18 | Who Manages and Oversees the Fund

Thomas Schuessler, PhD
Managing Director of Deutsche Asset Management and Portfolio Manager of the
fund.
- Joined Deutsche Asset Management in 2001 after five years at Deutsche Bank
   where he managed various projects and worked in the office of the Chairman
   of the Management Board.
- US and Global Fund Management: Frankfurt.
- Joined the fund in 2008
- PhD, University of Heidelberg, studies in physics and economics at University
   of Heidelberg and University of Utah.

John Brennan
Director of Deutsche Asset Management and Portfolio Manager of the fund.
- Portfolio and Sector Manager for Institutional Fixed Income: Louisville.
- Joined Deutsche Asset Management and the fund in 2007 after 14 years of
   experience at INVESCO and Freddie Mac. Previously, was head of Structured
   Securities sector team at INVESCO and before that was senior fixed income
   portfolio manager at Freddie Mac specializing in MBS, CMBS, collateralized
   mortgage obligations, ARMS, mortgage derivatives, US Treasuries and agency
   debt.
- BS, University of Maryland; MBA William & Mary.

J. Richard Robben, CFA
Vice President of Deutsche Asset Management and Portfolio Manager of the fund.
- Joined Deutsche Asset Management and the fund in 2007 after 11 years of
   experience at INVESCO Institutional, most recently as senior portfolio
   manager for LIBOR-related strategies and head of portfolio construction
   group for North American Fixed Income.
- BA, Bellarmine University.

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

                                         Who Manages and Oversees the Fund  | 19

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by Ernst & Young LLP, independent
registered public accounting firm, whose report, along with the fund's
financial statements, is included in the fund's annual report (see "Shareholder
reports" on the back cover).

DWS Balanced Fund - Institutional Class

YEARS ENDED OCTOBER 31,                         2007             2006             2005           2004          2003
SELECTED PER SHARE DATA
--------------------------------------------------------------------------------------------------------           -
NET ASSET VALUE, BEGINNING OF PERIOD          $  9.72         $    9.01         $  8.70        $  8.45       $  7.63
----------------------------------------      -------         ---------         -------        -------       -------
Income (loss) from investment
operations:
  Net investment income a                         .29            .26c               .24            .16           .16
________________________________________      _______         _________         _______        _______       _______
  Net realized and unrealized gain
  (loss)                                          .60               .69             .31            .26           .83
----------------------------------------      -------         ---------         -------        -------       -------
  TOTAL FROM INVESTMENT OPERATIONS                .89               .95             .55            .42           .99
________________________________________      _______         _________         _______        _______       _______
Less distributions from:
  Net investment income                        (  .35)            ( .24)          ( .24)         ( .17)        ( .17)
________________________________________      _______         _________         _______        _______       _______
Redemption fees                                   .00*              .00*            .00*             -             -
----------------------------------------      -------         ---------         -------        -------       -------
NET ASSET VALUE, END OF PERIOD                $ 10.26         $    9.72         $  9.01        $  8.70       $  8.45
----------------------------------------      -------         ---------         -------        -------       -------
Total Return (%)                               9.32b           10.76b,c          6.32b          5.01b          13.09
----------------------------------------      -------         ---------         -------        -------       -------
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------     -------
Net assets, end of period ($ millions)            .42               .42             .39            .35           .41
________________________________________      _______         _________         _______        _______       _______
Ratio of expenses before expense
reductions (%)                                    .68               .74             .69            .73           .67
________________________________________      _______         _________         _______        _______       _______
Ratio of expenses after expense
reductions (%)                                    .61               .60             .62            .69           .67
________________________________________      _______         _________         _______        _______       _______
Ratio of net investment income (%)               2.89           2.88c              2.74           1.89          2.03
________________________________________      _______         _________         _______        _______       _______
Portfolio turnover rate (%)                     188d             98d             158d            81d             108
----------------------------------------      -------         ---------         -------        -------       -------

a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.

c   Includes non-recurring income from the Advisor recorded as a result of an
   administrative proceeding regarding disclosure of brokerage allocation
   practices in connection with sales of DWS Scudder Funds. The non-recurring
   income resulted in an increase in net investment income of $0.007 per share
   and an increase in the ratio of net investment income of 0.07%. Excluding
   this non-recurring income, total return would have been 0.07% lower.

d   The portfolio turnover rates excluding mortgage dollar roll transactions
   were 178%, 96%, 156% and 74% for the years ended October 31, 2007, 2006,
   2005 and 2004, respectively.

*   Amount is less than $.005.

20 | Financial Highlights

HOW TO INVEST IN THE FUND

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Scudder, all of this information applies
to you. If you're investing through a "third party provider" - for example, a
workplace retirement plan, financial supermarket or financial advisor - your
provider may have its own policies or instructions and you should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

Buying and Selling INSTITUTIONAL CLASS Shares

           You may buy Institutional Class shares through your securities
           dealer or through any financial institution that is authorized to
           act as a shareholder servicing agent ("financial advisor"). Contact
           them for details on how to place and pay for your order. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates. For more information, please see "Financial
           intermediary support payments."

           You may also buy Institutional Class shares by sending your check
           (along with a completed account application) directly to DWS Scudder
           Investments Service Company (the "transfer agent"). Your purchase
           order may not be accepted if the fund withdraws the offering of fund
           shares, the sale of fund shares has been suspended or if it is
           determined that your purchase would be detrimental to the interests
           of the fund's shareholders.

           Eligibility requirements

           You may buy Institutional Class shares if you are any of the
           following:

           -  An eligible institution (e.g., a financial institution,
              corporation, trust, estate or educational, religious or
              charitable institution).

           -  An employee benefit plan with assets of at least $50 million.

           -  A registered investment advisor or financial planner purchasing
              on behalf of clients and charging an asset-based or
              hourly fee.

           -  A client of the private banking division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares in the funds.

           Investment minimum

           Your initial investment must be for at least $1,000,000. There are
           no minimum subsequent investment requirements.

22 | Buying and Selling Institutional Class Shares

           The minimum initial investment is waived for:

           -  Shareholders with existing accounts prior to August 13, 2004 who
              met the previous minimum investment eligibility requirement.

           -  Investment advisory affiliates of Deutsche Bank Securities, Inc.,
              DWS funds or Deutsche funds purchasing shares for the accounts of
              their investment advisory clients.

           -  Employee benefit plans with assets of at least $50 million.

           -  Clients of the private banking division of Deutsche Bank AG.

           -  Institutional clients and qualified purchasers that are clients
              of a division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares of the funds.

           -  Registered investment advisors who trade through platforms
              approved by the Advisor and whose client assets in the fund in
              the aggregate meet (or, in the Advisor's judgment, will meet
              within a reasonable period of time) the $1,000,000 minimum
              investment.

           The fund reserves the right to modify the above eligibility
           requirements and investment minimum at any time.

           How to contact the transfer agent

  BY PHONE:                (800) 730-1313
  FIRST INVESTMENTS        DWS Scudder Investments Service Company
  BY MAIL:                P.O. Box 219210
                          Kansas City, MO 64121-9210
  ADDITIONAL               DWS Scudder Investments Service Company
  INVESTMENTS BY          P.O. Box 219210
  MAIL:                   Kansas City, MO 64121-9210
  BY OVERNIGHT MAIL:       DWS Scudder Investments Service Company
                          210 West 10th Street
                          Kansas City, MO 64105-1614

           You can reach the automated information line, 24 hours a day,
           7 days a week by calling (800) 621-1048.

                             Buying and Selling Institutional Class Shares  | 23

           How to open your fund account

  MAIL:               Complete and sign the account application that
                     accompanies this prospectus. (You may obtain
                     additional applications by calling the transfer agent.)
                     Mail the completed application along with a check
                     payable to the fund you have selected to the transfer
                     agent. Be sure to include the fund number. The
                     applicable addresses are shown under "How to
                     contact the transfer agent."
  WIRE:               Call the transfer agent to set up a wire account.
  FUND NAME AND       Please use the complete fund name. Refer to "The
  FUND NUMBER:       Fund's Main Investment Strategy" above for the fund
                     number.

           Please note that your account cannot become activated until we
           receive a completed account application.

           How to BUY and SELL shares

           MAIL:

           BUYING: Send your check, payable to the fund you have selected, to
           the transfer agent. Be sure to include the fund number and your
           account number on your check. If you are investing in more than one
           fund, make your check payable to "DWS Scudder" and include your
           account number, the names and numbers of the funds you have
           selected, and the dollar amount or percentage you would like
           invested in each fund. Mailing addresses are shown under "How to
           contact the transfer agent."

           SELLING: Send a signed letter to the transfer agent with your name,
           your fund number and account number, the fund's name, and either the
           number of shares you wish to sell or the dollar amount you wish to
           receive. See "Signature Guarantee" for any applicable additional
           requirements. Unless exchanging into another DWS fund, you must
           submit a written authorization to sell shares in a retirement
           account.

24 | Buying and Selling Institutional Class Shares

           WIRE:

           BUYING: You may buy shares by wire only if your account is
           authorized to do so. Please note that you or your financial advisor
           must call Institutional Investment Services at (800) 730-1313 to
           notify us in advance of a wire transfer purchase. After you inform
           Institutional Investment Services of the amount of your purchase,
           you will receive a trade confirmation number. Instruct your bank to
           send payment by wire using the wire instructions noted below. All
           wires must be received by 4:00 p.m. Eastern time the next business
           day following your purchase. If your wire is not received by 4:00
           p.m. Eastern time on the next business day after the fund receives
           your request to purchase shares, your transaction will be canceled
           at your expense and risk.

  BANK NAME:        State Street Bank Boston
  ROUTING NO:       011000028
  ATTN:             DWS Scudder
  DDA NO:           9903-5552
  FBO:              (Account name) (Account number)
  CREDIT:           (Fund name, Fund number and, if applicable, class
                   name) (see "How to open your fund account")

           Refer to your account statement for the account name and number.
           Wire transfers normally take two or more hours to complete. Wire
           transfers may be restricted on holidays and at certain other times.

           SELLING: You may sell shares by wire only if your account is
           authorized to do so. You will be paid for redeemed shares by wire
           transfer of funds to your financial advisor or bank upon receipt of
           a duly authorized redemption request as promptly as feasible. For
           your protection, you may not change the destination bank account
           over the phone. To sell by wire, contact your financial advisor or
           Institutional Investment Services at (800) 730-1313. After you
           inform Institutional Investment Services of the amount of your
           redemption, you will receive a trade confirmation number. The
           minimum redemption by wire is $1,000. We must receive your order by
           4:00 p.m. Eastern time to wire your account the next business day.

                             Buying and Selling Institutional Class Shares  | 25

           TELEPHONE TRANSACTIONS:

           You may place orders to buy and sell over the phone by calling your
           financial advisor or Institutional Investment Services at (800)
           730-1313. If your shares are in an account with the transfer agent,
           you may (1) redeem by check in an amount up to $100,000, or by wire
           (minimum $1,000), or (2) exchange the shares for Institutional
           shares of another DWS fund by calling the transfer agent.

           You may make regular investments from a bank checking account. For
           more information on setting up an automatic investment plan or
           payroll investment plan, call Institutional Investment Services at
           (800) 730-1313.

           Financial intermediary support payments

           The Advisor, DWS Scudder 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 fund, 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 fund
           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 fund, any record keeping/sub-transfer
           agency/networking fees payable by the fund (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 fund with "shelf space" or
           access to a third party platform or fund offering list or other
           marketing programs, including, without limitation, inclusion of the
           fund 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

26 | Buying and Selling Institutional Class Shares

           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 fund
           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 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 fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund attributable to the financial
           advisor, a flat fee of $12,500 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 fund or of
           any particular share class of the fund. 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 fund. Additional information regarding these
           revenue sharing payments is included in the fund'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

                             Buying and Selling Institutional Class Shares  | 27

           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.

           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.

POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

28 | Policies You Should Know About

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           730-1313.

           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

           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 person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

                                            Policies You Should Know About  | 29

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           SUB-MINIMUM BALANCES. The fund may redeem your shares and close your
           account on 60 days' notice if it fails to meet the minimum account
           balance requirement of $1,000,000 for any reason.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's 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 fund 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 fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

           The fund also reserves the right to reject or cancel a purchase or
           exchange order for any reason without prior notice. For example, the
           fund 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 fund. The fund,
           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

30 | Policies You Should Know About

           rolling 12-month period. A "roundtrip" transaction is defined as any
           combination of purchase and redemption activity (including
           exchanges) of the same fund's shares. The fund may take other
           trading activity into account if the fund 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
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation, but a redemption from a DWS Fund may be
           subject to that DWS Fund's redemption fee policy, to the extent
           applicable.

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

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading
           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

           The Advisor may also accept undertakings from a financial
           intermediary to enforce short-term or excessive trading policies on
           behalf of the fund that provide a substantially similar level of
           protection for the fund against such transactions. For example,
           certain financial intermediaries may have contractual, legal or

                                            Policies You Should Know About  | 31

           operational restrictions that prevent them from blocking an account.
           In such instances, the financial intermediary may use alternate
           techniques that the Advisor considers to be a reasonable substitute
           for such a block.

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund 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 fund. (See "How the fund
           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 omnibus accounts maintained by
            broker-dealers or other financial intermediaries. The Advisor
            reviews trading activity at the omnibus 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 omnibus level,
            the Advisor will contact the financial intermediary to request
            underlying shareholder level activity. Depending on the amount of
            fund shares held in such omnibus accounts (which may represent most
            of the fund's shares) short-term and/or excessive trading of fund
            shares could adversely affect long- term shareholders in the fund.
            If short-term or excessive trading is identified, the Advisor will
            take appropriate action.

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

                        THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A
                        DAY BY CALLING (800) 621-1048. You can use our
                        automated phone services to get information on DWS
                        funds generally and on accounts held directly at DWS
                        Scudder.

                        QUICKBUY AND QUICKSELL let you set up a link between a
                        DWS fund account and a bank account. Once this link is
                        in place, you can move money between the two with a
                        phone call. You'll need to make sure your bank has
                        Automated Clearing House (ACH) services. Transactions
                        take two to

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-SCUDDER.COM to get up-to-date information, review
balances or even place orders for exchanges.

32 | Policies You Should Know About

           three days to be completed and there is a $50 minimum and a $250,000
           maximum. To set up QuickBuy or QuickSell on a new account, see the
           account application; to add it to an existing account, call (800)
           730-1313.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Institutional Investment Services at (800)
           730-1313 at a later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check,
           bank or Federal Funds wire transfer or by electronic bank transfer.
           Please note that the fund does not accept cash, money orders,
           traveler's checks, starter checks, third party checks (except checks
           for retirement plan asset transfers and rollovers or for Uniform
           Gifts to Minors Act/Uniform Transfers to Minors Act accounts),
           checks drawn on foreign banks or checks issued by credit card
           companies or Internet-based companies. Thus, subject to the
           foregoing exceptions for certain third party checks, checks that are
           otherwise permissible must be drawn by the account holder on a
           domestic bank and must be payable to the fund.

                                            Policies You Should Know About  | 33

           IF YOU PAY FOR SHARES BY CHECK and the check fails to clear, or if
           you order shares by phone and fail to pay for them by 4:00 p.m.
           Eastern time the next business day, we have the right to cancel your
           order, hold you liable or charge you or your account for any losses
           or fees the fund or its agents have incurred. To sell shares, you
           must state whether you would like to receive the proceeds by wire or
           check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           730-1313 or contact your financial advisor for more information.

            MONEY FROM SHARES YOU SELL is normally sent out within one business
            day of when your order is processed (not when it is received),
            although it could be delayed for up to seven days. There are other
            circumstances when it could be longer, including, but not limited
            to, when you are selling shares you bought recently by check or ACH
            (the funds will be placed under a 10 calendar day hold to ensure
            good funds) or when unusual circumstances prompt the SEC to allow
            further delays. Certain expedited redemption processes may also be
            delayed when you are selling recently purchased shares or in the
            event of closing of the Federal Reserve Bank's wire payment system.
            In addition, the fund reserves the right to suspend or postpone
            redemptions as permitted

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

34 | Policies You Should Know About

           pursuant to Section 22(e) of the Investment Company Act of 1940.
           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 the
           fund or the fair determination of the value of the fund'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. For additional rights reserved
           by the fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.

           ACCOUNT STATEMENTS. We or your financial advisor will generally
           furnish you with a written confirmation of every transaction that
           affects your account balance. You will also receive periodic
           statements reflecting the balances in your account.

           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:

            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING

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

           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 fund's 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

                                            Policies You Should Know About  | 35

           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. It is expected that the
           greater the percentage of fund assets that is invested in non-US
           securities, the more extensive will be the fund's use of fair value
           pricing. This is intended to reduce the fund's exposure to "time
           zone arbitrage" and other harmful trading practices. (See "Market
           timing policies and procedures.")

           TO THE EXTENT THAT THE 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
           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 fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)

           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              for federal income tax purposes if we have been notified by the
              IRS that you are subject to backup withholding or if you fail to
              provide us with a correct taxpayer ID number and certain
              certifications including certification that you are not subject
              to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

36 | Policies You Should Know About

           -  refuse, cancel, limit or rescind any purchase or exchange order,
           without prior notice; freeze any account (meaning you will not be
           able to purchase fund shares in your account); suspend account
           services; and/or involuntarily redeem your account if we think that
           the account is being used for fraudulent or illegal purposes; one or
           more of these actions will be taken when, at our sole discretion,
           they are deemed to be in the fund's best interests or when the fund
           is requested or compelled to do so by governmental authority or by
           applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less any applicable redemption fee, if any); you may
              recognize a gain or loss on the redemption of your fund shares
              and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you 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 fund
              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 fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)

                        UNDERSTANDING DISTRIBUTIONS AND TAXES

                        The fund intends to distribute to its shareholders
                        virtually all of its net earnings. The fund can earn
                        money in two ways: by receiving interest, dividends or
                        other income from securities it holds and by selling
                        securities for more than it paid for them. (The fund's
                        earnings are separate from any gains or losses stemming
                        from your own purchase and sale of shares.) The fund
                        may not always pay a dividend or distribution for a
                        given period.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

                                     Understanding Distributions and Taxes  | 37

           THE FUND INTENDS TO PAY DIVIDENDS to its shareholders in March,
           June, September and December. Long-term and short-term capital gains
           are paid in December. If necessary the fund may distribute at other
           times as well.

           Dividends or distributions declared to shareholders of record in the
           last quarter of a given calendar year are treated for federal income
           tax purposes as if they were received on December 31 of that year,
           provided such dividends or distributions are paid by the end of the
           following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be reinvested in shares of the
           fund without a sales charge (if applicable). Distributions are
           treated the same for federal income tax purposes whether you receive
           them in cash or reinvest them in additional shares. For
           employer-sponsored qualified plans, and retirement plans,
           reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

38 | Understanding Distributions and Taxes

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:

GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less

           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's recognition of ordinary income and may
           affect the timing or amount of the fund's distributions. If you
           invest in the fund through a taxable account, your after-tax return
           could be negatively impacted.

           To the extent that the fund invests in certain debt obligations or
           certain other securities, investments in these obligations or
           securities may cause the fund to recognize taxable income in excess
           of the cash generated by such obligations. Thus, the fund could be
           required at times to liquidate other investments in order to satisfy
           its distribution requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities or, generally, from REITs. In addition, the fund must
           meet certain

                                     Understanding Distributions and Taxes  | 39

           holding period and other requirements with respect to the
           dividend-paying stocks in its portfolio and the shareholder must
           meet certain holding period and other requirements with respect to
           the fund's shares for the lower tax rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been reduced to 15%. For taxable years beginning on or after January
           1, 2011, the long-term capital gain rate is scheduled to return to
           20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund declares a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.

40 | Understanding Distributions and Taxes

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary

           Using the annual fund operating expense ratios presented in the fee
           tables in the fund 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 fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables do not
           reflect redemption fees, if any, which may be payable upon
           redemption. 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 fund 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 fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.

                                                                  Appendix  | 41

DWS Balanced Fund - Institutional Class

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        0.70%              4.30%       $ 10,430.00         $  71.51
   2           10.25%        0.70%              8.78%       $ 10,878.49         $  74.58
   3           15.76%        0.70%             13.46%       $ 11,346.27         $  77.79
   4           21.55%        0.70%             18.34%       $ 11,834.15         $  81.13
   5           27.63%        0.70%             23.43%       $ 12,343.02         $  84.62
   6           34.01%        0.70%             28.74%       $ 12,873.77         $  88.26
   7           40.71%        0.70%             34.27%       $ 13,427.35         $  92.05
   8           47.75%        0.70%             40.05%       $ 14,004.72         $  96.01
   9           55.13%        0.70%             46.07%       $ 14,606.92         $ 100.14
  10           62.89%        0.70%             52.35%       $ 15,235.02         $ 104.45
  TOTAL                                                                         $ 870.54

42 | Appendix

TO GET MORE INFORMATION

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

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund'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 fund, call (800) 730-1313, or contact DWS Scudder at the address listed
below. The fund's SAI and shareholder reports are also available through the
DWS Scudder Web site at www.dws-scudder.com. These documents and other
information about the fund 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 fund,
including the fund'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.

DWS SCUDDER              SEC                     DISTRIBUTOR
---------------------    --------------------    -------------------------------
PO Box 219210            100 F Street, N.E.      DWS Scudder Distributors, Inc.
Kansas City, MO          Washington, D.C.        222 South Riverside Plaza
64121-9210               20549-0102              Chicago, IL 60606-5808
WWW.DWS-SCUDDER.COM      WWW.SEC.GOV             (800) 621-1148
(800) 730-1313           (800) SEC-0330

SEC FILE NUMBER:
                        DWS Balanced Fund    811-01236

(04/01/08) DBF-1-IN
[RECYCLE GRAPHIC APPEARS HERE]

                                                                       [Logo]DWS
                                                                         SCUDDER
                                                             Deutsche Bank Group

 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS:

                            ------------------------

DWS Alternative Asset Allocation          DWS Global Opportunities Fund         DWS Micro Cap Fund
  Plus Fund                               DWS Global Thematic Fund              DWS Mid Cap Growth Fund
DWS Balanced Fund                         DWS GNMA Fund                         DWS New York Tax-Free Income Fund
DWS Blue Chip Fund                        DWS Gold & Precious Metals Fund       DWS RREEF Global Infrastructure Fund
DWS California Tax-Free Income Fund       DWS Growth & Income Fund              DWS RREEF Global Real Estate
DWS Capital Growth Fund                   DWS Health Care Fund                    Securities Fund
DWS Climate Change Fund                   DWS High Income Fund                  DWS RREEF Real Estate Securities Fund
DWS Commodity Securities Fund             DWS High Income Plus Fund             DWS S&P 500 Index Fund
DWS Communications Fund                   DWS Inflation Protected Plus Fund     DWS Select Alternative Allocation Fund
DWS Core Fixed Income Fund                DWS Intermediate Tax/AMT Free Fund    DWS Short Duration Fund
DWS Core Plus Allocation Fund             DWS International Fund                DWS Short Duration Plus Fund
DWS Core Plus Income Fund                 DWS International Select Equity Fund  DWS Short-Term Municipal Bond Fund
DWS Disciplined Long/Short Growth Fund    DWS International Value               DWS Small Cap Core Fund
DWS Disciplined Long/Short Value Fund       Opportunities Fund                  DWS Small Cap Growth Fund
DWS Disciplined Market Neutral Fund       DWS Japan Equity Fund                 DWS Strategic Government Securities Fund
DWS Dreman Concentrated Value Fund        DWS Large Cap Value Fund              DWS Strategic High Yield Tax Free Fund
DWS Dreman High Return Equity Fund        DWS Large Company Growth Fund         DWS Strategic Income Fund
DWS Dreman Mid Cap Value Fund             DWS Latin America Equity Fund         DWS Target 2010 Fund
DWS Dreman Small Cap Value Fund           DWS LifeCompass 2015 Fund             DWS Target 2011 Fund
DWS EAFE(R) Equity Index Fund             DWS LifeCompass 2020 Fund             DWS Target 2012 Fund
DWS Emerging Markets Equity Fund          DWS LifeCompass 2030 Fund             DWS Target 2013 Fund
DWS Emerging Markets Fixed Income Fund    DWS LifeCompass 2040 Fund             DWS Target 2014 Fund
DWS Enhanced S&P 500 Index Fund           DWS LifeCompass Income Fund           DWS Technology Fund
DWS Equity 500 Index Fund                 DWS LifeCompass Protect Fund          DWS U.S. Bond Index Fund
DWS Equity Income Fund                    DWS LifeCompass Retirement Fund       DWS Value Builder Fund
DWS Equity Partners Fund                  DWS Lifecycle Long Range Fund
DWS Europe Equity Fund                    DWS Managed Municipal Bond Fund
DWS Floating Rate Plus Fund               DWS Massachusetts Tax-Free Fund
DWS Global Bond Fund

--------------------------------------------------------------------------------

The following information replaces similar disclosure regarding the schedule for
posting portfolio holdings in the "Other Policies and Risks -- For more
information" section of each fund's prospectus:

A complete list of the fund's portfolio holdings is posted as of the month end
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.

               Please Retain This Supplement for Future Reference

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group
October 27, 2008
DMF-3682

    SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED
                                FUNDS/PORTFOLIOS:

                             ----------------------

 Cash Account Trust:                          DWS Floating Rate Plus Fund                 DWS Mid Cap Growth Fund
   Government & Agency Securities Portfolio   DWS Global Bond Fund                        DWS Money Market Prime Series
   Money Market Portfolio                     DWS Global Opportunities Fund               DWS Money Market Series
   Tax-Exempt Portfolio                       DWS Global Thematic Fund                    DWS New York Tax-Free Income Fund
 DWS Alternative Asset Allocation Plus Fund   DWS GNMA Fund                               DWS RREEF Global Infrastructure Fund
 DWS Balanced Fund                            DWS Gold & Precious Metals Fund             DWS RREEF Global Real Estate Securities
 DWS Blue Chip Fund                           DWS Growth & Income Fund                      Fund
 DWS California Tax-Free Income Fund          DWS Health Care Fund                        DWS RREEF Real Estate Securities Fund
 DWS Capital Growth Fund                      DWS High Income Fund                        DWS S&P 500 Index Fund
 DWS Climate Change Fund                      DWS High Income Plus Fund                   DWS Short Duration Fund
 DWS Commodity Securities Fund                DWS Inflation Protected Plus Fund           DWS Short Duration Plus Fund
 DWS Communications Fund                      DWS Intermediate Tax/AMT Free Fund          DWS Short-Term Municipal Bond Fund
 DWS Core Fixed Income Fund                   DWS International Fund                      DWS Small Cap Core Fund
 DWS Core Plus Allocation Fund                DWS International Select Equity Fund        DWS Small Cap Growth Fund
 DWS Core Plus Income Fund                    DWS International Value Opportunities       DWS Strategic Government Securities Fund
 DWS Disciplined Long/Short Growth Fund         Fund                                      DWS Strategic High Yield Tax Free Fund
 DWS Disciplined Long/Short Value Fund        DWS Japan Equity Fund                       DWS Strategic Income Fund
 DWS Disciplined Market Neutral Fund          DWS Large Cap Value Fund                    DWS Target 2010 Fund
 DWS Dreman Concentrated Value Fund           DWS Large Company Growth Fund               DWS Target 2011 Fund
 DWS Dreman High Return Equity Fund           DWS Latin America Equity Fund               DWS Target 2012 Fund
 DWS Dreman Mid Cap Value Fund                DWS LifeCompass 2015 Fund                   DWS Target 2013 Fund
 DWS Dreman Small Cap Value Fund              DWS LifeCompass 2020 Fund                   DWS Target 2014 Fund
 DWS EAFE(R) Equity Index Fund                  DWS LifeCompass 2030 Fund                   DWS Technology Fund
 DWS Emerging Markets Equity Fund             DWS LifeCompass 2040 Fund                   DWS U.S. Bond Index Fund
 DWS Emerging Markets Fixed Income Fund       DWS LifeCompass Income Fund                 DWS Value Builder Fund
 DWS Enhanced S&P 500 Index Fund              DWS LifeCompass Protect Fund                Investors Cash Trust:
 DWS Equity 500 Index Fund                    DWS LifeCompass Retirement Fund               Treasury Portfolio
 DWS Equity Income Fund                       DWS Lifecycle Long Range Fund               Tax-Exempt California Money Market Fund
 DWS Equity Partners Fund                     DWS Managed Municipal Bond Fund
 DWS Europe Equity Fund                       DWS Massachusetts Tax-Free Fund
                                              DWS Micro Cap Fund
------------------------------------------------------------------------------------------------------------------------------------

On or about  September 25, 2008,  the  following  information  replaces  similar
disclosure under "Policies about  transactions" in the "Policies You Should Know
About" section of each fund's/portfolio's prospectuses:

Each  fund/portfolio  accepts  payment  for shares only in US dollars by a check
drawn on a US bank, a bank or Federal Funds wire transfer or an electronic  bank
transfer.  A  fund/portfolio  does not accept third party checks.  A third party
check is a check made  payable to one or more  parties and offered as payment to
one or more other parties  (e.g.,  a check made payable to you that you offer as
payment to someone else).  Checks should  normally be payable to DWS Investments
and drawn by you or a  financial  institution  on your  behalf with your name or
account number included with the check.

               Please Retain This Supplement for Future Reference

                                                          [DWS INVESTMENTS LOGO]
                                                             Deutsche Bank Group

September 25, 2008
DMF-3671R

                      SUPPLEMENT TO THE CURRENTLY EFFECTIVE
                                  PROSPECTUSES

                                -----------------

                             DWS Value Builder Fund

The Board of each fund noted below has given preliminary approval to a proposal
by Deutsche Investment Management Americas Inc. ("DIMA"), the advisor of each
such fund, to effect the following fund merger:

-------------------------------------------------------------------------------
Acquired Fund                             Acquiring Fund
-------------------------------------------------------------------------------
DWS Value Builder Fund                    DWS Balanced Fund
-------------------------------------------------------------------------------

Completion of this merger is subject to, among other things: (i) final approval
by the Board of each fund, and (ii) approval by shareholders of the Acquired
Fund. Prior to the shareholder meeting, shareholders of record on the record
date of the Acquired Fund will receive (i) a Proxy Statement/Prospectus
describing in detail the proposed merger and the Board's considerations in
recommending that shareholders approve the merger, (ii) a proxy card and
instructions on how to submit a vote, and (iii) a Prospectus for the Acquiring
Fund.

If the proposed merger is approved by shareholders, the Acquired Fund will be
closed to new investors except as described below. Unless you fit into one of
the investor eligibility categories described below, you may not invest in the
fund following shareholder approval of the merger.

You may continue to purchase fund shares following shareholder approval through
your existing fund account and reinvest dividends and capital gains if, as of
4:00 p.m. Eastern time on the shareholder meeting date, or such later date as
shareholder approval may occur, you are:

o  a current fund shareholder; or

o  a participant in any group retirement, employee stock bonus, pension or
   profit sharing plan that offers the fund as an investment option.

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group
September 23, 2008
DVBF-3603

New accounts may be opened for:

o  transfers of shares from existing accounts in this fund (including IRA
   rollovers);

o  officers, Trustees and Directors of the DWS Funds, and full-time employees
   and their family members of DIMA and its affiliates;

o  any group retirement, employee stock bonus, pension or profit sharing plan
   using the Flex subaccount recordkeeping system made available through ADP
   Inc. under an alliance with DWS Investments Distributors, Inc. ("DIDI")
   ("Flex Plans");

o  any group retirement, employee stock bonus, pension or profit sharing plan,
   other than a Flex Plan, that includes the fund as an investment option as of
   the shareholder meeting date;

o  purchases through any comprehensive or "wrap" fee program or other fee based
   program; or

o  accounts managed by DIMA, any advisory products offered by DIMA or DIDI and
   for the Portfolios of DWS Allocation Series or other fund of funds managed by
   DIMA or its affiliates.

Except as otherwise noted, these restrictions apply to investments made directly
with DIDI, the fund's principal underwriter, or through an intermediary
relationship with a financial services firm established with respect to the DWS
Funds as of the shareholder meeting date. Institutions that maintain omnibus
account arrangements are not allowed to open new sub-accounts for new investors,
unless the investor is one of the types listed above. Once an account is closed,
new investments will not be accepted unless you satisfy one of the investor
eligibility categories listed above.

Exchanges into the Acquired Fund will not be permitted unless the exchange is
being made into an existing fund account.

DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Acquired Fund shares.

               Please Retain This Supplement for Future Reference

September 23, 2008
DVBF-3603

                                       2

                                 AUGUST 1, 2008

                                   PROSPECTUS
                              ------------------
                               CLASSES A, B AND C

                             DWS VALUE BUILDER FUND

As with all mutual funds, 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

                                                        

CONTENTS

HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  7      The Main Risks of Investing in
         the Fund
 11      The Fund's Performance
         History
 14      How Much Investors Pay
 16      Other Policies and Risks
 17      Who Manages and Oversees
         the Fund
 20      Financial Highlights

HOW TO INVEST IN THE FUND
 24      Choosing a Share Class
 30      How to Buy Class A, B and C
         Shares
 31      How to Exchange or Sell
         Class A, B and C Shares
 34      Policies You Should Know
         About
 45      Understanding Distributions
         and Taxes
 49      Appendix

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

CLASSES A, B AND C shares are generally intended for investors seeking the
advice and assistance of a financial advisor.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).

                             Class A    Class B    Class C
  ticker symbol              FLVBX      FVBBX      FVBCX
    fund number              415        615        715
    DWS VALUE BUILDER FUND

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to maximize total return through a combination
            of long-term growth of capital and current income.

            The fund seeks to achieve its objective by investing primarily in a
            portfolio of common stocks and fixed-income securities. Under
            normal market conditions, between 40% and 75% of the fund's assets
            will be invested in common stocks and at least 25% of the fund's
            assets will be invested in fixed-income securities, as more fully
            described below. In selecting investments for the fund, the fund's
            Advisor determines the relative percentages of assets to be
            invested in common stocks and fixed-income securities based on its
            judgment as to general market and economic conditions, trends in
            yields and interest rates, and changes in fiscal and monetary
            policy. Although the fund invests primarily in US issuers, it may
            invest up to 25% of its assets in foreign securities.

            INVESTMENT PROCESS. Portfolio management seeks to find common
            stocks it believes are undervalued in the marketplace based on such
            characteristics as earnings, cash flow, or asset values. In
            evaluating a stock's potential, portfolio management also considers
            other factors such as historical earnings growth, industry
            position, the strength of management and management's commitment to
            the interests of their shareholders. While the fund does not limit
            its investments to issuers in a particular capitalization range,
            portfolio management generally focuses on securities of larger
            companies. Portfolio management looks for attractive price-to-value
            relationships in undervalued stocks of strong companies with good
            management. Portfolio management emphasizes individual stock
            selection, fundamental research, and valuation flexibility, without
            rigid constraints.

4 | DWS Value Builder Fund

            Portfolio management begins by screening for stocks whose
            price-to-earnings ratios are below the average for the S&P 500
            Index. Portfolio management then compares a company's stock price
            to its book value, cash flow and yield, and analyzes individual
            companies to identify those that appear to be financially sound and
            have strong potential for long-term growth.

            Portfolio management assembles the fund's common stock portfolio
            from among what it believes to be the most attractive stocks,
            drawing on analysis of economic outlooks for various sectors and
            industries. Portfolio management may favor securities from
            different sectors and industries at different times while still
            maintaining variety in terms of industries and companies
            represented.

            Portfolio management will normally sell a security when it believes
            the income or growth potential of the security has changed, a
            predetermined price target has been achieved, other investments
            offer better opportunities, or in the course of adjusting the
            emphasis on or within a given industry.

            Portfolio management expects that substantially all of the fund's
            fixed-income securities investments will be made indirectly by
            investing in DWS Short Duration Plus Fund, an affiliated mutual
            fund.

            DWS Short Duration Plus Fund's investment objective is to provide
            high income while also seeking to maintain a high degree of
            stability of shareholders' capital. DWS Short Duration Plus Fund
            invests in securities of varying maturities and normally seeks to
            maintain an average portfolio duration of no longer than three
            years. DWS Short Duration Plus Fund invests, under normal market
            conditions, at least 65% of its total assets in fixed income
            securities rated, at the time of purchase, within the top four
            long-term rating categories by a nationally recognized statistical
            rating organization (a "NRSRO") (or, if unrated, determined by the
            Advisor to be of similar quality).

            DWS Short Duration Plus Fund may invest up to 10% of its assets in
            US dollar-denominated, domestic and foreign below investment-grade
            fixed income securities (junk bonds) rated in the fifth and sixth
            long-term rating categories by a NRSRO (or, if unrated, determined
            by that fund's investment advisor to be of similar quality),
            including those whose issuers are located in countries with new or
            emerging securities markets.

                                                     DWS Value Builder Fund  | 5

            In addition to DWS Short Duration Plus Fund's main investment
            strategy, DWS Short Duration Plus Fund seeks to enhance returns by
            employing a global asset allocation overlay strategy. This
            strategy, which the Advisor calls iGAP (integrated Global Alpha
            Platform), attempts to take advantage of short-term and medium-term
            mispricings within global 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 bonds
            and over-the-counter forward currency contracts, and is expected to
            have a low correlation to the fund's other securities holdings.

            By investing in an affiliated mutual fund, portfolio management
            believes the fund will achieve greater diversification of its fixed
            income investments (by indirectly holding more securities of
            varying sizes and risks) than it could gain buying fixed income
            securities directly.

            In addition to investments in DWS Short Duration Plus Fund, debt
            securities in which the fund may invest include those rated
            investment grade (i.e., BBB/Baa or above) and below investment
            grade high yield/high risk bonds. The fund may invest up to 15% of
            net assets in high yield/high risk bonds (i.e., rated BB/Ba and
            below). Portfolio management selects bonds with a range of
            maturities based on its assessment of the relative yields available
            on securities of different maturities.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indexes, currencies or securities). In particular, the
            fund may use futures, options and covered call options. The fund
            may use derivatives in circumstances where the portfolio management
            believes they offer an economical means of gaining exposure to a
            particular asset class or to keep cash on hand to meet shareholder
            redemptions or other needs while maintaining exposure to the
            market.

            SECURITIES LENDING. The fund 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.

6 | DWS Value Builder Fund

            THE MAIN RISKS OF INVESTING IN THE FUND

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

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund'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 fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            VALUE INVESTING RISK. At times, "value" investing may perform
            better than or worse than other investment styles and the overall
            market. If portfolio management overestimates the value or return
            potential of one or more common stocks, the fund may underperform
            the general equity market. Value stocks may also be out of favor
            for certain periods in relation to growth stocks.

            ASSET ALLOCATION RISK. Although asset allocation among different
            asset categories generally reduces risk and exposure to any one
            category, the risk remains that the Advisor may favor an asset
            category that performs poorly relative to other asset categories.

            INDUSTRY RISK. While the fund does not concentrate in any industry,
            to the extent that the fund has exposure to a given industry or
            sector, any factors affecting that industry or sector could affect
            the value of portfolio securities. For example, manufacturers of
            consumer goods could be hurt by a rise in unemployment or
            technology companies could be hurt by such factors as market
            saturation, price competition and rapid obsolescence.

                                                     DWS Value Builder Fund  | 7

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

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt secumrities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the
            effective maturity of the fund's securities, the more sensitive the
            fund 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 decline, the issuers of securities
            held by the fund may prepay principal earlier than scheduled,
            forcing the fund to reinvest in lower-yielding securities and may
            reduce the fund'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, reducing the value of such a security.

            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
            fund 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 fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended

8 | DWS Value Builder Fund

            effect, and their use could cause lower returns or even losses to
            the fund. The use of derivatives by the fund to hedge risk may
            reduce the opportunity for gain by offsetting the positive effect
            of favorable price movements.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund 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 fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

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

            -  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.

            -  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.

            -  LIQUIDITY RISK. Investments that trade less 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

                                                     DWS Value Builder Fund  | 9

               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 fund's foreign
               investments.

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

            -  CURRENCY RISK. The fund 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.

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

            -  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.

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

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund'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 fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

10 | DWS Value Builder Fund

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Class A shares has varied
from year to year, which may give some idea of risk. The bar chart does not
reflect sales loads; if it did, total returns would be lower than those shown.
The table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The table includes the effects of maximum sales loads on fund
performance. The performance of both the fund and the index varies over time.
All figures assume reinvestment of dividends and distributions (in the case of
after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Class A shares on a before-tax and after-tax basis.
After-tax returns are shown for Class A only and will vary for Classes B and C.
After-tax returns are estimates calculated using the historical highest
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown in the table. After-tax returns shown
are not relevant for investors who hold their shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts.

The inception date for Class C shares is April 8, 1998. In the table,
performance figures before this date are based on the historical performance of
the fund's original share class (Class A), adjusted to reflect the higher gross
total annual operating expenses and the current applicable sales charges for
Class C.

DWS Value Builder Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - CLASS A (Results do not reflect
sales loads; if they did, total returns would be lower than those shown.)

[GRAPHIC APPEARS HERE]

18.53      13.81       -0.49      3.20      -18.92     30.81       8.74      0.65     10.20      -8.91
1998       1999       2000       2001       2002       2003       2004      2005      2006       2007

2008 TOTAL RETURN AS OF JUNE 30: -15.41%
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 21.03%, Q2 2003              WORST QUARTER: -15.08%, Q3 2001

                                                    DWS Value Builder Fund  | 11

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007 (Fund returns include the
effects of maximum sales load.)

                                                     1 YEAR          5 YEARS            10 YEARS
 CLASS A
   Return before Taxes                               -14.15             6.26              4.28
   Return after Taxes on Distributions               -18.51             4.42              2.64
   Return after Taxes on Distributions
   and Sale of Fund Shares                            -2.60*           5.68*,**           3.42*,**
 CLASS B (Return before Taxes)                       -11.61            6.54               4.10
 CLASS C (Return before Taxes)                        -9.59            6.71               4.14
 STANDARD & POOR'S (S&P) 500 INDEX
 (reflects no deductions for fees,
 expenses or taxes)                                   5.49            12.83               5.91
 BLENDED INDEX 60/35/5 (reflects no
 deductions for fees, expenses or
 taxes)                                               6.27             9.30               6.06
 RUSSELL 1000 (Reg. TM) VALUE INDEX (reflects
 no deductions for fees, expenses or
 taxes)                                               -0.17           14.63               7.68
 BLENDED INDEX 60/40 (reflects no
 deductions for fees, expenses or
 taxes)                                               2.72            10.11               6.87

 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     Return after Taxes on Distributions for the same period due to capital
     losses occurring upon redemption resulting in an assumed tax deduction for
     shareholders.

 **   The fund produced a positive total return due to income dividends and net
     realized gains distributed to the shareholders. Reinvestment of all
     dividends and distributions is assumed. Had you sold your shares at the
     period end net asset value you would have recognized a net loss. It is
     assumed that this loss will be applied against other gains producing a
     positive impact to the total Return after Taxes on Distributions and Sale
     of Fund Shares.

 STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged, capitalization-weighted
 index of 500 stocks. The index is designed to measure performance of the broad
 domestic economy through changes in the aggregate market value of 500 stocks
 representing all major industries.

 BLENDED INDEX 60/35/5 is composed of 60% S&P 500 Index, 35% Lehman Brothers
 Intermediate US Government/ Credit Index and 5% Merrill Lynch 3-Month Treasury
 Bill Index. The Lehman Brothers Intermediate US Government/ Credit Index is an
 unmanaged index comprising intermediate- and long-term government and
 investment-grade corporate debt securities. The Merrill Lynch 3-Month Treasury
 Bill Index is representative of the 3-month Treasury market.

 RUSSELL 1000 (Reg. TM) VALUE INDEX is an unmanaged index that consists of
 those stocks in the Russell 1000 Index with less-than-average growth
 orientation. Russell 1000 (Reg. TM) Index is an unmanaged price-only index of
 the 1,000 largest capitalized companies that are domiciled in the US and whose
 common stocks are traded.

12 | DWS Value Builder Fund

 BLENDED INDEX 60/40 is composed of 60% Russell 1000 Value Index and 40% Lehman
 Brothers 1-3 Year Government/Credit Index. The Lehman Brothers 1-3 Year
 Government/ Credit Index is an unmanaged index consisting of all US government
 agency and Treasury securities, as well as all investment-grade corporate debt
 securities with maturities of one to three years.

--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 621-1048 or visit our Web site at www.dws-investments.com.

--------------------------------------------------------------------------------
RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.

RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.

                                                    DWS Value Builder Fund  | 13

HOW MUCH INVESTORS PAY

This table describes the fees and expenses that you may pay if you buy and hold
fund shares. This information doesn't include any fees that may be charged by
your financial advisor.

FEE TABLE                                        CLASS A         CLASS B       CLASS C
 SHAREHOLDER FEES, paid directly from your investment
___________________________________________________________________________________________
 Maximum Sales Charge (Load) Imposed
 on Purchases (as % of offering price)             5.75%1         None          None
 Maximum Contingent Deferred Sales
 Charge (Load) (as % of redemption
 proceeds)                                       None2             4.00%         1.00%

 ANNUAL OPERATING EXPENSES, deducted from fund assets
___________________________________________________________________________________________
 Management Fee3                                  0.72  %          0.72%         0.72%
 Distribution/Service (12b-1) Fee                 0.24             1.00          1.00
 Other Expenses4                                  0.34             0.49          0.34
 Acquired Fund (Underlying Fund) Fees
 and Expenses5                                    0.20             0.20          0.20
 TOTAL ANNUAL OPERATING EXPENSES                  1.50             2.41          2.26
 Expense Reimbursements                           0.11             0.15          0.11
 NET ANNUAL OPERATING EXPENSES6,7,8               1.39             2.26          2.15

1   Because of rounding in the calculation of the offering price, the actual
   maximum front-end sales charge paid by an investor may be higher than the
   percentage noted (see "Choosing a Share Class - Class A shares").

2   The redemption of shares purchased at net asset value under the Large Order
   NAV Purchase Privilege (see "Choosing a Share Class - Class A shares") may
   be subject to a contingent deferred sales charge of 1.00% if redeemed
   within 12 months of purchase and 0.50% if redeemed within the following six
   months.

3   To the extent the fund invests in other mutual funds advised by the Advisor
   and its affiliates ("Underlying Funds"), the Advisor has agreed not to
   impose its advisory fees on assets invested in such Underlying Funds.

4   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

5   "Acquired Fund (Underlying Fund) Fees and Expenses" are based on estimated
   amounts for the current fiscal year. Actual expenses may be different.

6   Through September 30, 2008, the Advisor has contractually agreed to waive
   all or a portion of its management fee and reimburse or pay certain
   operating expenses so that the total annual operating expenses will be
   capped at a ratio no higher than 2.06% for Class B shares, excluding
   certain expenses such as extraordinary expenses, taxes, brokerage, interest
   and acquired funds (underlying funds) fees and expenses (estimated at
   0.20%).

14 | DWS Value Builder Fund

7   Through July 31, 2009, the Advisor has contractually agreed to waive its
management fee by an amount equal to the amount of management fee borne by the
fund as a shareholder of such other affiliated mutual funds. Accordingly, Net
Annual Operating Expenses will vary based in part on the amount of the fund's
investment in such other affiliated mutual funds (estimated at 0.11%).

8   Effective October 1, 2008 through September 30, 2009, the Advisor has
   contractually agreed to waive all or a portion of its management fee and
   reimburse or pay certain operating expenses so that the total annual
   operating expenses will be capped at a ratio no higher than 1.27%, 2.02%
   and 2.02% for Class A, Class B and Class C shares, respectively, excluding
   certain expenses such as extraordinary expenses, taxes, brokerage, interest
   and acquired funds (underlying funds) fees and expenses (estimated at
   0.20%).

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

EXAMPLE                1 YEAR      3 YEARS      5 YEARS      10 YEARS
 EXPENSES, assuming you sold your shares at the end of each period
_________________________________________________________________________
 Class A shares         $708       $1,012       $1,337       $2,254
 Class B shares*         629        1,037        1,472        2,301
 Class C shares          318          696        1,200        2,587

 EXPENSES, assuming you kept your shares
_________________________________________________________________________
 Class A shares         $708       $1,012       $1,337       $2,254
 Class B shares*         229          737        1,272        2,301
 Class C shares          218          696        1,200        2,587

*   Reflects conversion of Class B to Class A shares, which pay lower fees.
   Conversion occurs six years after purchase.

                                                    DWS Value Builder Fund  | 15

OTHER POLICIES AND RISKS

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

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

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities, notes
              or bonds issued by the US Treasury or by agencies of the US
              government. This could prevent losses, but, while engaged in a
              temporary defensive position, the fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions.

           For more information

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

           If you want more information on the fund'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 fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings as of the month-end
           is posted on www.dws-investments.com on or after the last day of the
           following month. This posted information generally remains
           accessible at least until the date on which the fund 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. In addition, the fund's top ten equity holdings and other
           fund information is posted on www.dws-investments.com as of the
           calendar quarter-end on or after the 15th day following quarter-end.
           The fund's Statement of Additional Information includes a
           description of the fund's policies and procedures with respect to
           the disclosure of the fund's portfolio holdings.

16 | Other Policies and Risks

WHO MANAGES AND OVERSEES THE FUND

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund 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 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, DIMA 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.

                                         Who Manages and Oversees the Fund  | 17

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.

FUND NAME                               FEE PAID
  DWS Value Builder Fund                  0.72%

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the
           shareholder report for the semi-annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor for providing most of the
           fund's administrative services.

18 | Who Manages and Oversees the Fund

Portfolio management

The following person handles the day-to-day management of the fund.

David Hone, CFA
Director of Deutsche Asset Management and Lead Portfolio Manager of the fund.
- Joined the fund in 2008.
- Joined Deutsche Asset Management in 1996 as an equity analyst for consumer
   cyclicals, consumer staples and financials.
- Prior to that, eight years of experience as an analyst for Chubb & Son.
- Portfolio manager for Large Cap Value; Lead portfolio manager for US Equity
   Income Fund Strategy: New York.
- BA, Villanova University.

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

                                         Who Manages and Oversees the Fund  | 19

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of each table are for a single
share. The total return figures represent the percentage that an investor in
the fund would have earned (or lost), assuming all dividends and distributions
were reinvested. This information has been audited by PricewaterhouseCoopers
LLP, independent registered public accounting firm, whose report, along with
the fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).

DWS Value Builder Fund - Class A

YEARS ENDED MARCH 31,                    2008             2007            2006           2005           2004
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                             $  23.34         $  23.79        $  23.49       $  23.51       $  16.75
--------------------------------      --------         --------        --------       --------       --------
Income (loss) from
investment operations:
  Net investment income a                  .27              .37             .38            .39            .37
________________________________      ________         ________        ________       ________       ________
  Net realized and unrealized
  gain (loss)                           ( 3.97)            1.65             .93         (  .02)          6.80
--------------------------------      --------         --------        --------       --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                            ( 3.70)            2.02            1.31            .37           7.17
________________________________      ________         ________        ________       ________       ________
Less distributions from:
  Net investment income                 (  .34)          (  .35)         (  .41)        (  .39)        (  .41)
________________________________      ________         ________        ________       ________       ________
  Net realized gains                    ( 6.11)          ( 2.12)         (  .60)             -              -
--------------------------------      --------         --------        --------       --------       --------
  TOTAL DISTRIBUTIONS                   ( 6.45)          ( 2.47)         ( 1.01)        (  .39)        (  .41)
________________________________      ________         ________        ________       ________       ________
Redemption fees                            .00*             .00*            .00*           .00*             -
--------------------------------      --------         --------        --------       --------       --------
NET ASSET VALUE, END OF
PERIOD                                $  13.19         $  23.34        $  23.79       $  23.49       $  23.51
--------------------------------      --------         --------        --------       --------       --------
Total Return (%)b                       (20.81)c         8.71c             5.66           1.57          43.22
--------------------------------      --------         --------        --------       --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                               143              336             412            466            451
________________________________      ________         ________        ________       ________       ________
Ratio of expenses before
expense reductions (%)                    1.30             1.25            1.17           1.14           1.15
________________________________      ________         ________        ________       ________       ________
Ratio of expenses after
expense reductions (%)                    1.29             1.23            1.17           1.14           1.15
________________________________      ________         ________        ________       ________       ________
Ratio of net investment
income (%)                                1.37             1.55            1.60           1.70           1.77
________________________________      ________         ________        ________       ________       ________
Portfolio turnover rate (%)                 73               11              19             17             13
--------------------------------      --------         --------        --------       --------       --------

a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

*   Amount is less than $.005.

20 | Financial Highlights

DWS Value Builder Fund - Class B

YEARS ENDED MARCH 31,                    2008             2007            2006           2005           2004
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                             $  23.34         $  23.80        $  23.50       $  23.52       $  16.75
--------------------------------      --------         --------        --------       --------       --------
Income (loss) from investment operations:
  Net investment income a                  .09              .18             .20            .22            .22
________________________________      ________         ________        ________       ________       ________
  Net realized and unrealized
  gain (loss)                           ( 3.96)            1.65             .93         (  .03)          6.79
--------------------------------      --------         --------        --------       --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                            ( 3.87)            1.83            1.13            .19           7.01
________________________________      ________         ________        ________       ________       ________
Less distributions from:
  Net investment income                 (  .18)          (  .17)         (  .23)        (  .21)        (  .24)
________________________________      ________         ________        ________       ________       ________
  Net realized gains                    ( 6.11)          ( 2.12)         (  .60)             -              -
--------------------------------      --------         --------        --------       --------       --------
  TOTAL DISTRIBUTIONS                   ( 6.29)          ( 2.29)         (  .83)        (  .21)        (  .24)
________________________________      ________         ________        ________       ________       ________
Redemption fees                            .00*             .00*            .00*           .00*             -
--------------------------------      --------         --------        --------       --------       --------
NET ASSET VALUE, END OF
PERIOD                                $  13.18         $  23.34        $  23.80       $  23.50       $  23.52
--------------------------------      --------         --------        --------       --------       --------
Total Return (%)b                       (21.47)c         7.83c             4.86            .83          42.20
--------------------------------      --------         --------        --------       --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                 3               10              16             35             60
________________________________      ________         ________        ________       ________       ________
Ratio of expenses before
expense reductions (%)                    2.21             2.09            1.92           1.91           1.90
________________________________      ________         ________        ________       ________       ________
Ratio of expenses after
expense reductions (%)                    2.14             2.04            1.92           1.91           1.90
________________________________      ________         ________        ________       ________       ________
Ratio of net investment
income (%)                                 .52              .74             .85            .93           1.02
________________________________      ________         ________        ________       ________       ________
Portfolio turnover rate (%)                 73               11              19             17             13
--------------------------------      --------         --------        --------       --------       --------

a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

*   Amount is less than $.005.

                                                      Financial Highlights  | 21

DWS Value Builder Fund - Class C

YEARS ENDED MARCH 31,                  2008             2007            2006           2005           2004
SELECTED PER SHARE DATA
-----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                           $  23.37         $  23.81        $  23.52       $  23.53       $  16.76
------------------------------      --------         --------        --------       --------       --------
Income (loss) from investment operations:
  Net investment income a                .11              .19             .20            .22            .21
______________________________      ________         ________        ________       ________       ________
  Net realized and unrealized
  gain (loss)                         ( 3.96)            1.66             .92         (  .02)          6.80
------------------------------      --------         --------        --------       --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                          ( 3.85)            1.85            1.12            .20           7.01
______________________________      ________         ________        ________       ________       ________
Less distributions from:
  Net investment income               (  .20)          (  .17)         (  .23)        (  .21)        (  .24)
______________________________      ________         ________        ________       ________       ________
  Net realized gains                  ( 6.11)          ( 2.12)         (  .60)             -              -
------------------------------      --------         --------        --------       --------       --------
  TOTAL DISTRIBUTIONS                 ( 6.31)          ( 2.29)         (  .83)        (  .21)        (  .24)
______________________________      ________         ________        ________       ________       ________
Redemption fees                          .00*             .00*            .00*           .00*             -
------------------------------      --------         --------        --------       --------       --------
NET ASSET VALUE, END OF
PERIOD                              $  13.21         $  23.37        $  23.81       $  23.52       $  23.53
------------------------------      --------         --------        --------       --------       --------
Total Return (%)b                     (21.38)c         7.92c             4.81            .88          42.18
------------------------------      --------         --------        --------       --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period ($
millions)                                  6               16              24             29             33
______________________________      ________         ________        ________       ________       ________
Ratio of expenses before
expense reductions (%)                  2.06             2.00            1.92           1.89           1.90
______________________________      ________         ________        ________       ________       ________
Ratio of expenses after
expense reductions (%)                  2.06             1.98            1.92           1.89           1.90
______________________________      ________         ________        ________       ________       ________
Ratio of net investment
income (%)                               .60              .80             .85            .95           1.02
______________________________      ________         ________        ________       ________       ________
Portfolio turnover rate (%)               73               11              19             17             13
------------------------------      --------         --------        --------       --------       --------

a   Based on average shares outstanding during the period.

b   Total return does not reflect the effect of any sales charges.

c   Total return would have been lower had certain expenses not been reduced.

*   Amount is less than $.005.

22 | Financial Highlights

HOW TO INVEST IN THE FUND

Offered in this prospectus are share classes noted on the cover of the
prospectus. Each class has its own fees and expenses, offering you a choice of
cost structures. The fund may offer other classes of shares in a separate
prospectus. These shares are intended for investors seeking the advice and
assistance of a financial advisor, who will typically receive compensation for
those services.

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

Before you invest, take a moment to look over the characteristics of each share
class, so that you can be sure to choose the class that's right for you. YOU
MAY WANT TO ASK YOUR FINANCIAL ADVISOR TO HELP YOU WITH THIS DECISION.

CHOOSING A SHARE CLASS

We describe each share class in detail on the following pages. But first, you
may want to look at the table below, which gives you a brief description and
comparison of the main features of each class.

 CLASS A
 -  Sales charge of up to 5.75% charged       -  Some investors may be able to reduce
  when you buy shares                        or eliminate their sales charge; see
                                             "Class A shares"
 -  In most cases, no charge when you
  sell shares                                -  Total annual expenses are lower than
                                             those for Class B or Class C
 -  Up to 0.25% annual shareholder
  servicing fee
 CLASS B
 -  No sales charge when you buy shares       -  The deferred sales charge rate falls to
                                             zero after six years
 -  Deferred sales charge declining from
  4.00%, charged when you sell shares        -  Shares automatically convert to
  you bought within the last six years       Class A after six years, which means
                                             lower annual expenses going forward
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing
  fee
 CLASS C
 -  No sales charge when you buy shares       -  The deferred sales charge rate for one
                                             year is lower for Class C shares than
 -  Deferred sales charge of 1.00%,
                                             Class B shares, but your shares never
  charged when you sell shares you
                                             convert to Class A, so annual expenses
  bought within the last year
                                             remain higher
 -  0.75% annual distribution fee and up
  to 0.25% annual shareholder servicing
  fee

    Your financial advisor will typically be paid a fee when you buy shares and may
receive different levels of compensation depending upon which class of shares
you buy. The fund may pay financial advisors or other intermediaries
compensation for the services they provide to their clients. This compensation
may vary depending on the share class and fund you buy. Your financial advisor
may also receive compensation from the Advisor and/or its affiliates. Please
see "Financial intermediary support payments" for more information.

24 | Choosing a Share Class

           Class A shares

           Class A shares may make sense for long-term investors, especially
           those who are eligible for a reduced or eliminated sales charge.

           Class A shares have a 12b-1 plan, under which a shareholder
           servicing fee of up to 0.25% is deducted from class assets each
           year. Because the shareholder servicing fee is continuous in nature,
           it may, over time, increase the cost of your investment and may cost
           you more than paying other types of sales charges.

           Class A shares have an up-front sales charge that varies with the
           amount you invest:

                              FRONT-END SALES          FRONT-END SALES
                                CHARGE AS %          CHARGE AS % OF YOUR
YOUR INVESTMENT            OF OFFERING PRICE1,2        NET INVESTMENT2
  Up to $50,000                  5.75%                     6.10%
$    50,000-$99,999              4.50                      4.71
$  100,000-$249,999              3.50                      3.63
$  250,000-$499,999              2.60                      2.67
$  500,000-$999,999              2.00                      2.04
  $1 million or more            see below                see below

           1   The offering price includes the sales charge.

           2   Because of rounding in the calculation of the offering price,
               the actual front-end sales charge paid by an investor may be
               higher or lower than the percentages noted.

           YOU MAY BE ABLE TO LOWER YOUR CLASS A SALES CHARGE IF:

           -  you plan to invest at least $50,000 in Class A shares (including
              Class A shares in other retail DWS funds) over the next 24 months
              ("Letter of Intent")

           -  the amount of Class A shares you already own (including Class A
              shares in other retail DWS funds) plus the amount you're
              investing now in Class A shares is at least $50,000 ("Cumulative
              Discount")

           -  you are investing a total of $50,000 or more in Class A shares of
              several retail DWS funds on the same day ("Combined Purchases")

                                                    Choosing a Share Class  | 25

           The point of these three features is to let you count investments
           made at other times or in certain other funds for purposes of
           calculating your present sales charge. Any time you can use the
           privileges to "move" your investment into a lower sales charge
           category, it's generally beneficial for you to do so.

           For purposes of determining whether you are eligible for a reduced
           Class A sales charge, you and your immediate family (your spouse or
           life partner and your children or stepchildren age 21 or younger)
           may aggregate your investments in the DWS family of funds. This
           includes, for example, investments held in a retirement account, an
           employee benefit plan or at a financial advisor other than the one
           handling your current purchase. These combined investments will be
           valued at their current offering price to determine whether your
           current investment qualifies for a reduced sales charge.

           To receive a reduction in your Class A initial sales charge, you
           must let your financial advisor or Shareholder Services know at the
           time you purchase shares that you qualify for such a reduction. You
           may be asked by your financial advisor or Shareholder Services to
           provide account statements or other information regarding related
           accounts of you or your immediate family in order to verify your
           eligibility for a reduced sales charge.

           For more information about sales charge discounts, please visit
           www.dws-investments.com (click on the link entitled "Fund Sales
           Charge and Breakpoint Schedule"), consult with your financial
           advisor or refer to the section entitled "Purchase or Redemption of
           Shares" in the fund's Statement of Additional Information.

           IN CERTAIN CIRCUMSTANCES, YOU MAY BE ABLE TO BUY CLASS A SHARES
           WITHOUT A SALES CHARGE. For example, the sales charge will be waived
           if you are reinvesting dividends or distributions or if you are
           exchanging an investment in Class A shares of another fund in the
           DWS family of funds for an investment in Class A shares of the fund.
           In addition, a sales charge waiver may apply to transactions by
           certain retirement plans and certain other entities or persons
           (e.g., affiliated persons of Deutsche Asset Management or the DWS
           funds) and with respect to certain types of investments (e.g., an
           investment advisory or agency commission program under which you pay
           a fee to an investment advisor or other firm for portfolio
           management or brokerage services).

26 | Choosing a Share Class

           Details regarding the types of investment programs and categories of
           investors eligible for a sales charge waiver are provided in the
           fund's Statement of Additional Information.

           There are a number of additional provisions that apply in order to
           be eligible for a sales charge waiver. The fund may waive the sales
           charge for investors in other situations as well. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

           IF YOU'RE INVESTING $1 MILLION OR MORE, either as a lump sum or
           through one of the sales charge reduction features described above,
           you may be eligible to buy Class A shares without a sales charge
           ("Large Order NAV Purchase Privilege"). However, you may be charged
           a contingent deferred sales charge (CDSC) of 1.00% on any shares you
           sell within 12 months of owning them and a similar charge of 0.50%
           on shares you sell within the following six months. This CDSC is
           waived under certain circumstances (see "Policies You Should Know
           About"). Your financial advisor or Shareholder Services can answer
           your questions and help you determine if you're eligible.

           Class B shares

           Class B shares may make sense for long-term investors who prefer to
           see all of their investment go to work right away and can accept
           somewhat higher annual expenses. Please note, however, that since
           not all DWS funds offer Class B shares, exchange options may be
           limited.

           With Class B shares, you pay no up-front sales charge to the fund.
           Class B shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. This means the annual expenses for
           Class B shares are somewhat higher (and their performance
           correspondingly lower) compared to Class A shares. However, unlike
           Class A shares, your entire investment goes to work immediately.
           After six years, Class B shares automatically convert on a tax-free
           basis to Class A shares, which has the net effect of lowering the
           annual expenses from the seventh year on.

                                                    Choosing a Share Class  | 27

           Class B shares have a CDSC. This charge declines over the years you
           own shares and disappears completely after six years of ownership.
           But for any shares you sell within those six years, you may be
           charged as follows:

    YEAR AFTER YOU BOUGHT SHARES               CDSC ON SHARES YOU SELL
  First year                                     4.00%
  Second or third year                           3.00
  Fourth or fifth year                           2.00
  Sixth year                                     1.00
  Seventh year and later               None (automatic conversion to Class A)

           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.
                     While Class B shares don't have any front-end sales charge, their
           higher annual expenses mean that over the years you could end up
           paying more than the equivalent of the maximum allowable front-end
           sales charge.

           If you are thinking of making a large purchase in Class B shares or
           if you already own a large amount of Class A shares of the fund or
           other DWS funds, it may be more cost efficient to purchase Class A
           shares instead. Orders to purchase Class B shares of $100,000 or
           more will be declined with the exception of orders received from
           financial representatives acting for clients whose shares are held
           in an omnibus account and certain employer-sponsored employee
           benefit plans.

           Class C shares

           Class C shares may appeal to investors who plan to sell some or all
           of their shares within six years of buying them or who aren't
           certain of their investment time horizon.

           With Class C shares, you pay no up-front sales charge to the fund.
           Class C shares have a 12b-1 plan, under which a distribution fee of
           0.75% and a shareholder servicing fee of up to 0.25% are deducted
           from class assets each year. Because of these fees, the annual
           expenses for Class C shares are similar to those of Class B shares,
           but higher than those for Class A shares (and the performance of
           Class C shares is correspondingly lower than that of Class A
           shares).

28 | Choosing a Share Class

           Unlike Class B shares, Class C shares do NOT automatically convert
           to Class A shares after six years, so they continue to have higher
           annual expenses.

           Class C shares have a CDSC, but only on shares you sell within one
           year of buying them:

   YEAR AFTER YOU BOUGHT SHARES        CDSC ON SHARES YOU SELL
  First year                          1.00%
  Second year and later                         None

           This CDSC is waived under certain circumstances (see "Policies You
           Should Know About"). Your financial advisor or Shareholder Services
           can answer your questions and help you determine if you're eligible.
                     While Class C shares do not have an up-front sales charge, their
           higher annual expenses mean that, over the years, you could end up
           paying more than the equivalent of the maximum allowable up-front
           sales charge.

           Orders to purchase Class C shares of $500,000 or more will be
           declined with the exception of orders received from financial
           representatives acting for clients whose shares are held in an
           omnibus account and certain employer-sponsored employee benefit
           plans.

                                                    Choosing a Share Class  | 29

How to BUY Class A, B and C Shares

 FIRST INVESTMENT                                ADDITIONAL INVESTMENTS
 $1,000 or more for most accounts                $50 or more for regular accounts and
 $500 or more for IRAs                          IRAs
 $500 or more for an account with an            $50 or more for an account with an
 Automatic Investment Plan                      Automatic Investment Plan
 THROUGH A FINANCIAL ADVISOR
 -  To obtain an application, contact your      -  Contact your advisor using the
  advisor                                       method that's most convenient for you
 BY MAIL OR EXPRESS MAIL (SEE BELOW)
 -  Fill out and sign an application            -  Send a check payable to "DWS
                                                Investments" and an investment slip
 -  Send it to us at the appropriate
  address, along with an investment             -  If you don't have an investment slip,
  check made payable to "DWS                    include a letter with your name,
  Investments"                                  account number, the full name of the
                                                fund and the share class and your
                                                investment instructions
 BY WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY PHONE
 Not available                                  -  Call (800) 621-1048 for instructions
 WITH AN AUTOMATIC INVESTMENT PLAN
 -  Fill in the information on our              -  To set up regular investments from a
  application including a check for the         bank checking account call (800) 621-
  initial investment and a voided check         1048 ($50 minimum)
 USING QuickBuy
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickBuy is set up on your account; if
                                                it is, you can request a transfer from
                                                your bank account of any amount
                                                between $50 and $250,000
 ON THE INTERNET
 Not available                                  -  Call (800) 621-1048 to ensure you have
                                                electronic services
                                                -  Register at www.dws-
                                                investments.com or log in if already
                                                registered
                                                -  Follow the instructions for buying
                                                shares with money from your bank
                                                account

    --------------------------------------------------------------------------------
REGULAR MAIL:

First Investment: DWS Investments, PO Box 219356, Kansas City, MO 64121-9356
Additional Investments: DWS Investments, PO Box 219154, Kansas City, MO
64121-9154

EXPRESS, REGISTERED OR CERTIFIED MAIL:
DWS Investments, 210 West 10th Street, Kansas City, MO 64105-1614

30 | How to Buy Class A, B and C Shares

How to EXCHANGE or SELL Class A, B and C Shares

 EXCHANGING INTO ANOTHER FUND                    SELLING SHARES
                                                 Some transactions, including most for
 -  Exchanges into existing accounts:
                                                over $100,000, can only be ordered in
  $50 minimum per fund
                                                writing with a signature guarantee;
 -  Exchanges into new accounts:
                                                please see "Signature Guarantee"
  $1,000 minimum per fund for most
  accounts
  $500 minimum for IRAs
 THROUGH A FINANCIAL ADVISOR
 -  Contact your advisor using the              -  Contact your advisor using the
  method that's most convenient for you         method that's most convenient for you
 BY PHONE                                        BY PHONE OR WIRE
 -  Call (800) 621-1048 for instructions        -  Call (800) 621-1048 for instructions
 BY MAIL OR EXPRESS MAIL
 (see previous page for address)
 Write a letter that includes:                  Write a letter that includes:
 -  the fund, class and account number          -  the fund, class and account number
  you're exchanging out of                      from which you want to sell shares
 -  the dollar amount or number of shares       -  the dollar amount or number of shares
  you want to exchange                          you want to sell
 -  the name and class of the fund you          -  your name(s), signature(s) and
  want to exchange into                         address, as they appear on your
                                                account
 -  your name(s), signature(s) and
  address, as they appear on your               -  a daytime telephone number
  account
 -  a daytime telephone number
 WITH AN AUTOMATIC EXCHANGE PLAN                 WITH AN AUTOMATIC WITHDRAWAL PLAN
 -  To set up regular exchanges from a          -  Call (800) 621-1048 (minimum $50)
  fund account, call (800) 621-1048
 USING QuickSell
 Not available                                  -  Call (800) 621-1048 to make sure
                                                QuickSell is set up on your account; if
                                                it is, you can request a transfer to your
                                                bank account of any amount between
                                                $50 and $250,000
 ON THE INTERNET
 -  Register at www.dws-                        -  Register at www.dws-
  investments.com or log in if already          investments.com or log in if already
  registered                                    registered
 -  Follow the instructions for making on-      -  Follow the instructions for making on-
  line exchanges                                line redemptions

    --------------------------------------------------------------------------------

TO REACH US:      WEB SITE: www.dws-investments.com
                  TELEPHONE REPRESENTATIVE: (800) 621-1048, M-F, 9 a.m. - 6 p.m. ET
                  TDD LINE: (800) 972-3006, M-F, 9 a.m. - 6 p.m. ET

                           How to Exchange or Sell Class A, B and C Shares  | 31

           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 fund, to
           selected financial advisors in connection with the sale and/or
           distribution of fund 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 fund, any record
           keeping/sub-transfer agency/networking fees payable by the fund
           (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 fund
           with "shelf space" or access to a third party platform or fund
           offering list or other marketing programs, including, without
           limitation, inclusion of the fund 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 fund
           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 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.

32 | How to Exchange or Sell Class A, B and C Shares

           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 fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund 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 fund or of
           any particular share class of the fund. 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 fund. Additional information regarding these
           revenue sharing payments is included in the fund'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
           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 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

                           How to Exchange or Sell Class A, B and C Shares  | 33

           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.

POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           621-1048.

           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

34 | Policies You Should Know About

           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 person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated, less any applicable sales charge.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           INITIAL PURCHASE. The minimum initial investment for Class A, B and
           C shares is $1,000, except for investments on behalf of participants
           in certain fee-based and wrap programs offered through certain
           financial intermediaries approved by the Advisor,

                                            Policies You Should Know About  | 35

           for which there is no minimum initial investment; and IRAs, for
           which the minimum initial investment is $500 per account. The
           minimum initial investment is $500 per account if you establish an
           automatic investment plan. Group retirement plans and certain other
           accounts have similar or lower minimum share balance requirements.

           SUB-MINIMUM BALANCES. The fund may close your account and send you
           the proceeds if your balance falls below $1,000 ($250 for retirement
           accounts and $500 for accounts with an Automatic Investment Plan
           funded with $50 or more per month in subsequent investments). We
           will give you 60 days' notice (90 days for retirement accounts) so
           you can either increase your balance or close your account (these
           policies don't apply to investors with $100,000 or more in DWS fund
           shares, investors in certain fee-based and wrap programs offered
           through certain financial intermediaries approved by the Advisor, or
           group retirement plans and certain other accounts having lower
           minimum share balance requirements).

           SUBSEQUENT INVESTMENTS. The minimum subsequent investment is $50.
           However, there is no minimum investment requirement for subsequent
           investments in Class A shares on behalf of participants in certain
           fee-based and wrap programs offered through certain financial
           intermediaries approved by the Advisor.

           MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
           trading of fund shares may present risks to long-term shareholders,
           including potential dilution in the value of fund shares,
           interference with the efficient management of the fund's 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 fund 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 fund (e.g.,
           "time zone arbitrage"). The fund discourages short-term and
           excessive trading and has adopted policies and procedures that are
           intended to detect and deter short-term and excessive trading.

36 | Policies You Should Know About

           The fund also reserves the right to reject or cancel a purchase or
           exchange order for any reason without prior notice. For example, the
           fund 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 fund. The fund,
           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 fund's
           shares. The fund may take other trading activity into account if the
           fund 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
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation.

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

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive trading

                                            Policies You Should Know About  | 37

           may be more or less restrictive than the DWS Funds' policy, may
           permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

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

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund 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 fund. (See "How the fund
           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 omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus 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 omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

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

38 | Policies You Should Know About

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments. You can also use this service to make exchanges
           and to purchase and sell shares.

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 621-1048.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Shareholder Services at (800) 621-1048 at a
           later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.

                                            Policies You Should Know About  | 39

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check
           drawn on a US bank, bank or Federal Funds wire transfer or by
           electronic bank transfer. Please note that the fund does not accept
           payment in the following forms: cash, money orders, traveler's
           checks, starter checks, checks drawn on foreign banks or checks
           issued by credit card companies or Internet-based companies. In
           addition, the fund generally does not accept third party checks. A
           third party check is any check not made payable directly to DWS
           Investments, except for any check payable to you from one of your
           other DWS accounts. Under certain circumstances, the fund may accept
           a third party check (i) for retirement plan contributions, asset
           transfers and rollovers, (ii) as contributions into Uniform Gift to
           Minors Act/Uniform Transfers to Minors Act accounts, (iii) payable
           from acceptable US and state government agencies, and (iv) from
           other DWS funds (such as a redemption or dividend check) for
           investment only in a similarly registered account. Subject to the
           foregoing, checks should normally be payable to DWS Investments and
           drawn by you or a financial institution on your behalf with your
           name or account number included with the check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           621-1048 or contact your financial advisor for more information.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

40 | Policies You Should Know About

           WHEN YOU SELL SHARES THAT HAVE A CDSC, we calculate the CDSC as a
           percentage of what you paid for the shares or what you are selling
           them for - whichever results in the lower charge to you. In
           processing orders to sell shares, the shares with the lowest CDSC
           are sold first. Exchanges from one fund into another don't affect
           CDSCs; for each investment you make, the date you first bought
           shares is the date we use to calculate a CDSC on that particular
           investment.

           There are certain cases in which you may be exempt from a CDSC.
           These include:

           -  the death or disability of an account owner (including a joint
              owner). This waiver applies only under certain conditions. Please
              contact your financial advisor or Shareholder Services to
              determine if the conditions exist

           -  withdrawals made through an automatic withdrawal plan up to a
              maximum of 12% per year of the net asset value of the account

           -  withdrawals related to certain retirement or benefit plans

           -  redemptions for certain loan advances, hardship provisions or
              returns of excess contributions from retirement plans

           -  for Class A shares purchased through the Large Order NAV Purchase
              Privilege, redemption of shares whose dealer of record at the
              time of the investment notifies the Distributor that the dealer
              waives the applicable commission

           -  for Class C shares, redemption of shares purchased through a
              dealer-sponsored asset allocation program maintained on an
              omnibus record-keeping system, provided the dealer of record has
              waived the advance of the first year distribution and service
              fees applicable to such shares and has agreed to receive such
              fees quarterly

           In each of these cases, there are a number of additional provisions
           that apply in order to be eligible for a CDSC waiver. Your financial
           advisor or Shareholder Services can answer your questions and help
           you determine if you are eligible.

                                            Policies You Should Know About  | 41

           IF YOU SELL SHARES IN A DWS FUND AND THEN DECIDE TO INVEST WITH DWS
           INVESTMENTS AGAIN WITHIN SIX MONTHS, you may be able to take
           advantage of the "reinstatement feature." With this feature, you can
           put your money back into the same class of a DWS fund at its current
           NAV and, for purposes of a sales charge, it will be treated as if it
           had never left DWS Investments.

           You'll be reimbursed (in the form of fund shares) for any CDSC you
           paid when you sold. Future CDSC calculations will be based on your
           original investment date, rather than your reinstatement date. There
           is also an option that lets investors who sold Class B shares buy
           Class A shares (if available) with no sales charge, although they
           won't be reimbursed for any CDSC they paid. You can only use the
           reinstatement feature once for any given group of shares. To take
           advantage of this feature, contact Shareholder Services or your
           financial advisor.

           MONEY FROM SHARES YOU SELL is normally sent out within one business
           day of when your order is processed (not when it is received),
           although it could be delayed for up to seven days. There are
           circumstances when it could be longer, including, but not limited
           to, when you are selling shares you bought recently by check or ACH
           (the funds will be placed under a 10 calendar day hold to ensure
           good funds) or when unusual circumstances prompt the SEC to allow
           further delays. Certain expedited redemption processes (e.g.,
           redemption proceeds by wire) may also be delayed or unavailable when
           you are selling shares recently purchased or in the event of the
           closing of the Federal Reserve wire payment system. The fund
           reserves the right to suspend or postpone redemptions as permitted
           pursuant to Section 22(e) of the Investment Company Act of 1940.
           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 the
           fund or the fair determination of the value of the fund'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. For additional rights reserved
           by the fund, please see "Other rights we reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.

42 | Policies You Should Know About

           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:

            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING

           The price at which you buy shares is based on the NAV per share
           calculated after the order is received by the transfer agent,
           although for Class A shares it will be adjusted to allow for any
           applicable sales charge (see "Choosing a Share Class"). The price at
           which you sell shares is also based on the NAV per share calculated
           after the order is received by the transfer agent, although a CDSC
           may be taken out of the proceeds (see "Choosing a Share Class").

           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 fund's 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. It is
           expected that the greater the percentage of fund assets that is
           invested in non-US securities, the more extensive will be the fund's
           use of fair value pricing. This is intended to reduce the fund's
           exposure to "time zone arbitrage" and other harmful trading
           practices. (See "Market timing policies and procedures.")

           TO THE EXTENT THAT THE 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

                                            Policies You Should Know About  | 43

           or at times when the 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 fund shares. Price changes in the securities
           the fund owns may ultimately affect the price of fund shares the
           next time the NAV is calculated.)

           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              for federal income tax purposes if we have been notified by the
              IRS that you are subject to backup withholding or if you fail to
              provide us with the correct taxpayer ID number and certain
              certifications including certification that you are not subject
              to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

           -  refuse, cancel, limit or rescind any purchase or exchange order,
              without prior notice; freeze any account (meaning you will not be
              able to purchase fund shares in your account); suspend account
              services; and/or involuntarily redeem your account if we think
              that the account is being used for fraudulent or illegal
              purposes; one or more of these actions will be taken when, at our
              sole discretion, they are deemed to be in the fund's best
              interests or when the fund is requested or compelled to do so by
              governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account (less sales charge, if any); you may recognize a gain or
              loss on the redemption of your fund shares and you may incur a
              tax liability

44 | Policies You Should Know About

            -     pay you for shares you sell by "redeeming in kind," that is,
                  by giving you 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 fund 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 fund's net assets,
                  whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or other distribution for a given period.

           THE FUND INTENDS TO PAY DISTRIBUTIONS OF SUBSTANTIALLY ALL OF ITS
           INCOME QUARTERLY. The fund intends to pay distributions from
           realized capital gains annually, usually in December. If necessary,
           the fund may distribute at other times as needed.

            Dividends or distributions declared and payable to shareholders of
            record in the last quarter of a given calendar year are treated for
            federal income tax purposes as if they were received on December 31
            of that year, provided such dividends or distributions are paid by
            the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

           YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
           can have them all automatically reinvested in fund shares (at NAV),
           all deposited directly to your bank account or all sent to you by
           check, have one type reinvested and the other sent to you by check
           or have them invested in a different fund. Tell us your preference
           on your application. If you don't indicate a preference, your
           dividends and distributions will all be

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

                                     Understanding Distributions and Taxes  | 45

           reinvested in shares of the fund without a sales charge (if
           applicable). Distributions are treated the same for federal income
           tax purposes whether you receive them in cash or reinvest them in
           additional shares. Under the terms of employer-sponsored qualified
           plans, and retirement plans, reinvestment (at NAV) is the only
           option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital gain or loss. The gain or loss
           will be long-term or short-term depending on how long you owned the
           shares that were sold. For federal income tax purposes, an exchange
           is treated the same as a sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:

GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
DISTRIBUTIONS FROM THE FUND                       - gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income          TRANSACTIONS INVOLVING FUND                     SHARES                                          - gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less

               ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's recognition of ordinary income and may
           affect the timing or amount of the fund's distributions. If you
           invest in the fund through a taxable account, your after-tax return
           could be negatively impacted.

46 | Understanding Distributions and Taxes

           Investments in certain debt obligations or other securities may
           cause the fund to recognize taxable income in excess of the cash
           generated by them. Thus, the fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes dividends received by the fund from domestic and
           some foreign corporations. It does not include income from
           investments in debt securities  or, generally, from REITs. In
           addition, the fund must meet certain holding period and other
           requirements with respect to the dividend-paying stocks in its
           portfolio and the shareholder must meet certain holding period and
           other requirements with respect to the fund's shares for the lower
           tax rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the long-term capital
           gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund pays a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

                                     Understanding Distributions and Taxes  | 47

           If the fund's distributions exceed its income and capital gains
           realized in any year, all or a portion of those distributions may be
           treated for tax purposes as a return of capital. A return of capital
           will generally not be taxable to you but will reduce the cost basis
           of your shares and result in a higher capital gain or a lower
           capital loss when you sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.

48 | Understanding Distributions and Taxes

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary

           Using the annual fund operating expense ratios presented in the fee
           tables in the fund 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 fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested  and that Class B shares convert to
           Class A shares after six years. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables
           reflect the maximum initial sales charge, if any, but do not reflect
           any contingent deferred sales charge or redemption fees, if any,
           which may be payable upon redemption. If contingent deferred sales
           charges or redemption fees were shown, the "Hypothetical Year-End
           Balance After Fees and Expenses" amounts shown would be lower and
           the "Annual Fees and Expenses" amounts shown would be higher. 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 fund 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 fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.

                                                                  Appendix  | 49

DWS Value Builder Fund - Class A

                                      INITIAL HYPOTHETICAL                 ASSUMED RATE
                 MAXIMUM                   INVESTMENT:                      OF RETURN:
           SALES CHARGE: 5.75%               $10,000                            5%
                                                                    HYPOTHETICAL
                CUMULATIVE           ANNUAL       CUMULATIVE          YEAR-END
              RETURN BEFORE           FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
                 FEES AND           EXPENSE        FEES AND           FEES AND            AND
YEAR             EXPENSES            RATIOS        EXPENSES           EXPENSES         EXPENSES
   1               5.00%           1.39%             -2.35%       $  9,765.24        $   708.37
   2              10.25%           1.50%              1.07%       $ 10,107.03        $   149.04
   3              15.76%           1.50%              4.61%       $ 10,460.77        $   154.26
   4              21.55%           1.50%              8.27%       $ 10,826.90        $   159.66
   5              27.63%           1.50%             12.06%       $ 11,205.84        $   165.25
   6              34.01%           1.50%             15.98%       $ 11,598.04        $   171.03
   7              40.71%           1.50%             20.04%       $ 12,003.98        $   177.02
   8              47.75%           1.50%             24.24%       $ 12,424.12        $   183.21
   9              55.13%           1.50%             28.59%       $ 12,858.96        $   189.62
  10              62.89%           1.50%             33.09%       $ 13,309.02        $   196.26
  TOTAL                                                                              $ 2,253.72

DWS Value Builder Fund - Class B

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER        ANNUAL
              FEES AND        EXPENSE        FEES AND           FEES AND         FEES AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        2.26%              2.74%       $ 10,274.00        $   229.10
   2           10.25%        2.41%              5.40%       $ 10,540.10        $   250.81
   3           15.76%        2.41%              8.13%       $ 10,813.09        $   257.31
   4           21.55%        2.41%             10.93%       $ 11,093.14        $   263.97
   5           27.63%        2.41%             13.80%       $ 11,380.46        $   270.81
   6           34.01%        2.41%             16.75%       $ 11,675.21        $   277.82
   7           40.71%        1.50%             20.84%       $ 12,083.84        $   178.19
   8           47.75%        1.50%             25.07%       $ 12,506.78        $   184.43
   9           55.13%        1.50%             29.45%       $ 12,944.51        $   190.88
  10           62.89%        1.50%             33.98%       $ 13,397.57        $   197.57
  TOTAL                                                                        $ 2,300.89

50 | Appendix

DWS Value Builder Fund - Class C

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        2.15%              2.85%       $ 10,285.00        $   218.06
   2           10.25%        2.26%              5.67%       $ 10,566.81        $   235.63
   3           15.76%        2.26%              8.56%       $ 10,856.34        $   242.08
   4           21.55%        2.26%             11.54%       $ 11,153.80        $   248.71
   5           27.63%        2.26%             14.59%       $ 11,459.42        $   255.53
   6           34.01%        2.26%             17.73%       $ 11,773.41        $   262.53
   7           40.71%        2.26%             20.96%       $ 12,096.00        $   269.72
   8           47.75%        2.26%             24.27%       $ 12,427.43        $   277.11
   9           55.13%        2.26%             27.68%       $ 12,767.94        $   284.71
  10           62.89%        2.26%             31.18%       $ 13,117.78        $   292.51
  TOTAL                                                                        $ 2,586.59

                                                                  Appendix  | 51

TO GET MORE INFORMATION

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

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund'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 fund, call (800) 621-1048, or contact DWS Investments at the address listed
below. The fund'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 fund 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 fund,
including the fund'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.

DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
PO Box 219151        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9151           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 621-1048

SEC FILE NUMBER:
DWS Value Builder Fund, Inc.        DWS Value Builder Fund    811-06600

[GRAPHIC APPEARS HERE]

                                                                      (08/01/08) DVBF-1
 [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group

 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS:

                            ------------------------

DWS Alternative Asset Allocation          DWS Global Opportunities Fund         DWS Micro Cap Fund
  Plus Fund                               DWS Global Thematic Fund              DWS Mid Cap Growth Fund
DWS Balanced Fund                         DWS GNMA Fund                         DWS New York Tax-Free Income Fund
DWS Blue Chip Fund                        DWS Gold & Precious Metals Fund       DWS RREEF Global Infrastructure Fund
DWS California Tax-Free Income Fund       DWS Growth & Income Fund              DWS RREEF Global Real Estate
DWS Capital Growth Fund                   DWS Health Care Fund                    Securities Fund
DWS Climate Change Fund                   DWS High Income Fund                  DWS RREEF Real Estate Securities Fund
DWS Commodity Securities Fund             DWS High Income Plus Fund             DWS S&P 500 Index Fund
DWS Communications Fund                   DWS Inflation Protected Plus Fund     DWS Select Alternative Allocation Fund
DWS Core Fixed Income Fund                DWS Intermediate Tax/AMT Free Fund    DWS Short Duration Fund
DWS Core Plus Allocation Fund             DWS International Fund                DWS Short Duration Plus Fund
DWS Core Plus Income Fund                 DWS International Select Equity Fund  DWS Short-Term Municipal Bond Fund
DWS Disciplined Long/Short Growth Fund    DWS International Value               DWS Small Cap Core Fund
DWS Disciplined Long/Short Value Fund       Opportunities Fund                  DWS Small Cap Growth Fund
DWS Disciplined Market Neutral Fund       DWS Japan Equity Fund                 DWS Strategic Government Securities Fund
DWS Dreman Concentrated Value Fund        DWS Large Cap Value Fund              DWS Strategic High Yield Tax Free Fund
DWS Dreman High Return Equity Fund        DWS Large Company Growth Fund         DWS Strategic Income Fund
DWS Dreman Mid Cap Value Fund             DWS Latin America Equity Fund         DWS Target 2010 Fund
DWS Dreman Small Cap Value Fund           DWS LifeCompass 2015 Fund             DWS Target 2011 Fund
DWS EAFE(R) Equity Index Fund             DWS LifeCompass 2020 Fund             DWS Target 2012 Fund
DWS Emerging Markets Equity Fund          DWS LifeCompass 2030 Fund             DWS Target 2013 Fund
DWS Emerging Markets Fixed Income Fund    DWS LifeCompass 2040 Fund             DWS Target 2014 Fund
DWS Enhanced S&P 500 Index Fund           DWS LifeCompass Income Fund           DWS Technology Fund
DWS Equity 500 Index Fund                 DWS LifeCompass Protect Fund          DWS U.S. Bond Index Fund
DWS Equity Income Fund                    DWS LifeCompass Retirement Fund       DWS Value Builder Fund
DWS Equity Partners Fund                  DWS Lifecycle Long Range Fund
DWS Europe Equity Fund                    DWS Managed Municipal Bond Fund
DWS Floating Rate Plus Fund               DWS Massachusetts Tax-Free Fund
DWS Global Bond Fund

--------------------------------------------------------------------------------

The following information replaces similar disclosure regarding the schedule for
posting portfolio holdings in the "Other Policies and Risks -- For more
information" section of each fund's prospectus:

A complete list of the fund's portfolio holdings is posted as of the month end
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.

               Please Retain This Supplement for Future Reference

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group
October 27, 2008
DMF-3682

    SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED
                                FUNDS/PORTFOLIOS:

                             ----------------------

 Cash Account Trust:                          DWS Floating Rate Plus Fund                 DWS Mid Cap Growth Fund
   Government & Agency Securities Portfolio   DWS Global Bond Fund                        DWS Money Market Prime Series
   Money Market Portfolio                     DWS Global Opportunities Fund               DWS Money Market Series
   Tax-Exempt Portfolio                       DWS Global Thematic Fund                    DWS New York Tax-Free Income Fund
 DWS Alternative Asset Allocation Plus Fund   DWS GNMA Fund                               DWS RREEF Global Infrastructure Fund
 DWS Balanced Fund                            DWS Gold & Precious Metals Fund             DWS RREEF Global Real Estate Securities
 DWS Blue Chip Fund                           DWS Growth & Income Fund                      Fund
 DWS California Tax-Free Income Fund          DWS Health Care Fund                        DWS RREEF Real Estate Securities Fund
 DWS Capital Growth Fund                      DWS High Income Fund                        DWS S&P 500 Index Fund
 DWS Climate Change Fund                      DWS High Income Plus Fund                   DWS Short Duration Fund
 DWS Commodity Securities Fund                DWS Inflation Protected Plus Fund           DWS Short Duration Plus Fund
 DWS Communications Fund                      DWS Intermediate Tax/AMT Free Fund          DWS Short-Term Municipal Bond Fund
 DWS Core Fixed Income Fund                   DWS International Fund                      DWS Small Cap Core Fund
 DWS Core Plus Allocation Fund                DWS International Select Equity Fund        DWS Small Cap Growth Fund
 DWS Core Plus Income Fund                    DWS International Value Opportunities       DWS Strategic Government Securities Fund
 DWS Disciplined Long/Short Growth Fund         Fund                                      DWS Strategic High Yield Tax Free Fund
 DWS Disciplined Long/Short Value Fund        DWS Japan Equity Fund                       DWS Strategic Income Fund
 DWS Disciplined Market Neutral Fund          DWS Large Cap Value Fund                    DWS Target 2010 Fund
 DWS Dreman Concentrated Value Fund           DWS Large Company Growth Fund               DWS Target 2011 Fund
 DWS Dreman High Return Equity Fund           DWS Latin America Equity Fund               DWS Target 2012 Fund
 DWS Dreman Mid Cap Value Fund                DWS LifeCompass 2015 Fund                   DWS Target 2013 Fund
 DWS Dreman Small Cap Value Fund              DWS LifeCompass 2020 Fund                   DWS Target 2014 Fund
 DWS EAFE(R) Equity Index Fund                  DWS LifeCompass 2030 Fund                   DWS Technology Fund
 DWS Emerging Markets Equity Fund             DWS LifeCompass 2040 Fund                   DWS U.S. Bond Index Fund
 DWS Emerging Markets Fixed Income Fund       DWS LifeCompass Income Fund                 DWS Value Builder Fund
 DWS Enhanced S&P 500 Index Fund              DWS LifeCompass Protect Fund                Investors Cash Trust:
 DWS Equity 500 Index Fund                    DWS LifeCompass Retirement Fund               Treasury Portfolio
 DWS Equity Income Fund                       DWS Lifecycle Long Range Fund               Tax-Exempt California Money Market Fund
 DWS Equity Partners Fund                     DWS Managed Municipal Bond Fund
 DWS Europe Equity Fund                       DWS Massachusetts Tax-Free Fund
                                              DWS Micro Cap Fund
------------------------------------------------------------------------------------------------------------------------------------

On or about  September 25, 2008,  the  following  information  replaces  similar
disclosure under "Policies about  transactions" in the "Policies You Should Know
About" section of each fund's/portfolio's prospectuses:

Each  fund/portfolio  accepts  payment  for shares only in US dollars by a check
drawn on a US bank, a bank or Federal Funds wire transfer or an electronic  bank
transfer.  A  fund/portfolio  does not accept third party checks.  A third party
check is a check made  payable to one or more  parties and offered as payment to
one or more other parties  (e.g.,  a check made payable to you that you offer as
payment to someone else).  Checks should  normally be payable to DWS Investments
and drawn by you or a  financial  institution  on your  behalf with your name or
account number included with the check.

               Please Retain This Supplement for Future Reference

                                                          [DWS INVESTMENTS LOGO]
                                                             Deutsche Bank Group

September 25, 2008
DMF-3671R

                      SUPPLEMENT TO THE CURRENTLY EFFECTIVE
                                  PROSPECTUSES

                                -----------------

                             DWS Value Builder Fund

The Board of each fund noted below has given preliminary approval to a proposal
by Deutsche Investment Management Americas Inc. ("DIMA"), the advisor of each
such fund, to effect the following fund merger:

-------------------------------------------------------------------------------
Acquired Fund                             Acquiring Fund
-------------------------------------------------------------------------------
DWS Value Builder Fund                    DWS Balanced Fund
-------------------------------------------------------------------------------

Completion of this merger is subject to, among other things: (i) final approval
by the Board of each fund, and (ii) approval by shareholders of the Acquired
Fund. Prior to the shareholder meeting, shareholders of record on the record
date of the Acquired Fund will receive (i) a Proxy Statement/Prospectus
describing in detail the proposed merger and the Board's considerations in
recommending that shareholders approve the merger, (ii) a proxy card and
instructions on how to submit a vote, and (iii) a Prospectus for the Acquiring
Fund.

If the proposed merger is approved by shareholders, the Acquired Fund will be
closed to new investors except as described below. Unless you fit into one of
the investor eligibility categories described below, you may not invest in the
fund following shareholder approval of the merger.

You may continue to purchase fund shares following shareholder approval through
your existing fund account and reinvest dividends and capital gains if, as of
4:00 p.m. Eastern time on the shareholder meeting date, or such later date as
shareholder approval may occur, you are:

o  a current fund shareholder; or

o  a participant in any group retirement, employee stock bonus, pension or
   profit sharing plan that offers the fund as an investment option.

                                                                     [Logo]DWS
                                                                   INVESTMENTS
                                                           Deutsche Bank Group
September 23, 2008
DVBF-3603

New accounts may be opened for:

o  transfers of shares from existing accounts in this fund (including IRA
   rollovers);

o  officers, Trustees and Directors of the DWS Funds, and full-time employees
   and their family members of DIMA and its affiliates;

o  any group retirement, employee stock bonus, pension or profit sharing plan
   using the Flex subaccount recordkeeping system made available through ADP
   Inc. under an alliance with DWS Investments Distributors, Inc. ("DIDI")
   ("Flex Plans");

o  any group retirement, employee stock bonus, pension or profit sharing plan,
   other than a Flex Plan, that includes the fund as an investment option as of
   the shareholder meeting date;

o  purchases through any comprehensive or "wrap" fee program or other fee based
   program; or

o  accounts managed by DIMA, any advisory products offered by DIMA or DIDI and
   for the Portfolios of DWS Allocation Series or other fund of funds managed by
   DIMA or its affiliates.

Except as otherwise noted, these restrictions apply to investments made directly
with DIDI, the fund's principal underwriter, or through an intermediary
relationship with a financial services firm established with respect to the DWS
Funds as of the shareholder meeting date. Institutions that maintain omnibus
account arrangements are not allowed to open new sub-accounts for new investors,
unless the investor is one of the types listed above. Once an account is closed,
new investments will not be accepted unless you satisfy one of the investor
eligibility categories listed above.

Exchanges into the Acquired Fund will not be permitted unless the exchange is
being made into an existing fund account.

DIDI may, at its discretion, require appropriate documentation that shows an
investor is eligible to purchase Acquired Fund shares.

               Please Retain This Supplement for Future Reference

September 23, 2008
DVBF-3603

                                       2

                                 AUGUST 1, 2008

                                   PROSPECTUS
                              ------------------
                              INSTITUTIONAL CLASS

                             DWS VALUE BUILDER FUND

As with all mutual funds, 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

CONTENTS

HOW THE FUND WORKS
  4      The Fund's Main Investment
         Strategy
  7      The Main Risks of Investing in
         the Fund
 11      The Fund's Performance
         History
 14      How Much Investors Pay
 15      Other Policies and Risks
 16      Who Manages and Oversees
         the Fund
 19      Financial Highlights

HOW TO INVEST IN THE FUND
 21      Buying and Selling
         Institutional Class Shares
 27      Policies You Should Know
         About
 37      Understanding Distributions
         and Taxes
 41      Appendix

HOW THE FUND WORKS

On the next few pages, you'll find information about the fund's investment
objective, the main strategies it uses to pursue that objective and the main
risks that could affect performance.

Whether you are considering investing in the fund or are already a shareholder,
you'll want to LOOK THIS INFORMATION OVER CAREFULLY. You may want to keep it on
hand for reference as well.

Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices will go up and down, and you could lose money by investing in them.

You can find DWS prospectuses on the Internet at WWW.DWS-INVESTMENTS.COM (the
Web site does not form a part of this prospectus).

                                Institutional Class
  ticker symbol                 FLIVX
    fund number                 535

    DWS VALUE BUILDER FUND

            THE FUND'S MAIN INVESTMENT STRATEGY

            The fund seeks to maximize total return through a combination
            of long-term growth of capital and current income.

            The fund seeks to achieve its objective by investing primarily in a
            portfolio of common stocks and fixed-income securities. Under
            normal market conditions, between 40% and 75% of the fund's assets
            will be invested in common stocks and at least 25% of the fund's
            assets will be invested in fixed-income securities, as more fully
            described below. In selecting investments for the fund, the fund's
            Advisor determines the relative percentages of assets to be
            invested in common stocks and fixed-income securities based on its
            judgment as to general market and economic conditions, trends in
            yields and interest rates, and changes in fiscal and monetary
            policy. Although the fund invests primarily in US issuers, it may
            invest up to 25% of its assets in foreign securities.

            INVESTMENT PROCESS. Portfolio management seeks to find common
            stocks it believes are undervalued in the marketplace based on such
            characteristics as earnings, cash flow, or asset values. In
            evaluating a stock's potential, portfolio management also considers
            other factors such as historical earnings growth, industry
            position, the strength of management and management's commitment to
            the interests of their shareholders. While the fund does not limit
            its investments to issuers in a particular capitalization range,
            portfolio management generally focuses on securities of larger
            companies. Portfolio management looks for attractive price-to-value
            relationships in undervalued stocks of strong companies with good
            management. Portfolio management emphasizes individual stock
            selection, fundamental research, and valuation flexibility, without
            rigid constraints.

4 | DWS Value Builder Fund

            Portfolio management begins by screening for stocks whose
            price-to-earnings ratios are below the average for the S&P 500
            Index. Portfolio management then compares a company's stock price
            to its book value, cash flow and yield, and analyzes individual
            companies to identify those that appear to be financially sound and
            have strong potential for long-term growth.

            Portfolio management assembles the fund's common stock portfolio
            from among what it believes to be the most attractive stocks,
            drawing on analysis of economic outlooks for various sectors and
            industries. Portfolio management may favor securities from
            different sectors and industries at different times while still
            maintaining variety in terms of industries and companies
            represented.

            Portfolio management will normally sell a security when it believes
            the income or growth potential of the security has changed, a
            predetermined price target has been achieved, other investments
            offer better opportunities, or in the course of adjusting the
            emphasis on or within a given industry.

            Portfolio management expects that substantially all of the fund's
            fixed-income securities investments will be made indirectly by
            investing in DWS Short Duration Plus Fund, an affiliated mutual
            fund.

            DWS Short Duration Plus Fund's investment objective is to provide
            high income while also seeking to maintain a high degree of
            stability of shareholders' capital. DWS Short Duration Plus Fund
            invests in securities of varying maturities and normally seeks to
            maintain an average portfolio duration of no longer than three
            years. DWS Short Duration Plus Fund invests, under normal market
            conditions, at least 65% of its total assets in fixed income
            securities rated, at the time of purchase, within the top four
            long-term rating categories by a nationally recognized statistical
            rating organization (a "NRSRO") (or, if unrated, determined by the
            Advisor to be of similar quality).

            DWS Short Duration Plus Fund may invest up to 10% of its assets in
            US dollar-denominated, domestic and foreign below investment-grade
            fixed income securities (junk bonds) rated in the fifth and sixth
            long-term rating categories by a NRSRO (or, if unrated, determined
            by that fund's investment advisor to be of similar quality),
            including those whose issuers are located in countries with new or
            emerging securities markets.

                                                     DWS Value Builder Fund  | 5

            In addition to DWS Short Duration Plus Fund's main investment
            strategy, DWS Short Duration Plus Fund seeks to enhance returns by
            employing a global asset allocation overlay strategy. This
            strategy, which the Advisor calls iGAP (integrated Global Alpha
            Platform), attempts to take advantage of short-term and medium-term
            mispricings within global 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 bonds
            and over-the-counter forward currency contracts, and is expected to
            have a low correlation to the fund's other securities holdings.

            By investing in an affiliated mutual fund, portfolio management
            believes the fund will achieve greater diversification of its fixed
            income investments (by indirectly holding more securities of
            varying sizes and risks) than it could gain buying fixed income
            securities directly.

            In addition to investments in DWS Short Duration Plus Fund, debt
            securities in which the fund may invest include those rated
            investment grade (i.e., BBB/Baa or above) and below investment
            grade high yield/high risk bonds. The fund may invest up to 15% of
            net assets in high yield/high risk bonds (i.e., rated BB/Ba and
            below). Portfolio management selects bonds with a range of
            maturities based on its assessment of the relative yields available
            on securities of different maturities.

            OTHER INVESTMENTS. The fund is permitted, but not required, to use
            various types of derivatives (contracts whose value is based on,
            for example, indexes, currencies or securities). In particular, the
            fund may use futures, options and covered call options. The fund
            may use derivatives in circumstances where the portfolio management
            believes they offer an economical means of gaining exposure to a
            particular asset class or to keep cash on hand to meet shareholder
            redemptions or other needs while maintaining exposure to the
            market.

            SECURITIES LENDING. The fund 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.

6 | DWS Value Builder Fund

            THE MAIN RISKS OF INVESTING IN THE FUND

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

            STOCK MARKET RISK. The fund is affected by how the stock market
            performs. To the extent the fund invests in a particular
            capitalization or market sector, the fund'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 fund makes, which
            could affect the fund's ability to sell them at an attractive
            price.

            VALUE INVESTING RISK. At times, "value" investing may perform
            better than or worse than other investment styles and the overall
            market. If portfolio management overestimates the value or return
            potential of one or more common stocks, the fund may underperform
            the general equity market. Value stocks may also be out of favor
            for certain periods in relation to growth stocks.

            ASSET ALLOCATION RISK. Although asset allocation among different
            asset categories generally reduces risk and exposure to any one
            category, the risk remains that the Advisor may favor an asset
            category that performs poorly relative to other asset categories.

            INDUSTRY RISK. While the fund does not concentrate in any industry,
            to the extent that the fund has exposure to a given industry or
            sector, any factors affecting that industry or sector could affect
            the value of portfolio securities. For example, manufacturers of
            consumer goods could be hurt by a rise in unemployment or
            technology companies could be hurt by such factors as market
            saturation, price competition and rapid obsolescence.

                                                     DWS Value Builder Fund  | 7

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

            CREDIT RISK. A fund purchasing debt securities faces the risk that
            the creditworthiness of an issuer may decline, causing the value of
            the debt securities to decline. In addition, an issuer may not be
            able to make timely payments on the interest and/
            or principal on the debt security it has issued. Because the
            issuers of high-yield debt securities or junk bonds (debt
            securities rated below the fourth highest category) may be in
            uncertain financial health, the prices of their debt securities can
            be more vulnerable to bad economic news or even the expectation of
            bad news, than investment-grade debt securities. In some cases,
            debt securities, particularly high-yield debt secumrities, may
            decline in credit quality or go into default. Because the fund may
            invest in securities not paying current interest or in securities
            already in default, these risks may be more pronounced.

            INTEREST RATE RISK. Generally, fixed income securities will
            decrease in value when interest rates rise. The longer the
            effective maturity of the fund's securities, the more sensitive the
            fund 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 decline, the issuers of securities
            held by the fund may prepay principal earlier than scheduled,
            forcing the fund to reinvest in lower-yielding securities and may
            reduce the fund'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, reducing the value of such a security.

            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
            fund 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 fund to the effects of leverage, which
            could increase the fund's exposure to the market and magnify
            potential losses. There is no guarantee that derivatives, to the
            extent employed, will have the intended

8 | DWS Value Builder Fund

            effect, and their use could cause lower returns or even losses to
            the fund. The use of derivatives by the fund to hedge risk may
            reduce the opportunity for gain by offsetting the positive effect
            of favorable price movements.

            PRICING RISK. At times, market conditions may make it difficult to
            value some investments, and the fund 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 fund has valued its securities too
            highly, you may pay too much for fund shares when you buy into the
            fund. If the fund has underestimated the price of its securities,
            you may not receive the full market value when you sell your fund
            shares.

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

            -  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.

            -  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.

            -  LIQUIDITY RISK. Investments that trade less 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

                                                     DWS Value Builder Fund  | 9

               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 fund's foreign
               investments.

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

            -  CURRENCY RISK. The fund 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.

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

            -  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.

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

            SECURITIES LENDING RISK. Any loss in the market price of securities
            loaned by the fund that occurs during the term of the loan would be
            borne by the fund and would adversely affect the fund'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 fund's delegate after a review of relevant facts and
            circumstances, including the creditworthiness of the borrower.

10 | DWS Value Builder Fund

THE FUND'S PERFORMANCE HISTORY

While a fund's past performance (before and after taxes) isn't necessarily a
sign of how it will do in the future, it can be valuable for an investor to
know.

The bar chart shows how the performance of the fund's Institutional Class
shares has varied from year to year, which may give some idea of risk. The
table on the following page shows how fund performance compares to relevant
index performance (which, unlike fund performance, does not reflect fees or
expenses). The performance of both the fund and the index varies over time. All
figures assume reinvestment of dividends and distributions (in the case of
after-tax returns, reinvested net of assumed tax rates).

The table shows returns for Institutional Class shares on a before-tax and
after-tax basis. After-tax returns are estimates calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor's tax situation and may differ from those shown in the table.
After-tax returns shown are not relevant for investors who hold their shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.

DWS Value Builder Fund

ANNUAL TOTAL RETURN (%) AS OF 12/31 EACH YEAR - Institutional Class

[GRAPHIC APPEARS HERE]

18.84      14.08       -0.23      3.45      -18.67     31.08       8.98      0.92     10.49      -8.55
1998       1999       2000       2001       2002       2003       2004      2005      2006       2007

2008 TOTAL RETURN AS OF JUNE 30: -15.26%
FOR THE PERIODS INCLUDED IN THE BAR CHART:
BEST QUARTER: 21.17%, Q2 2003              WORST QUARTER: -14.99%, Q3 2001

                                                    DWS Value Builder Fund  | 11

AVERAGE ANNUAL TOTAL RETURNS (%) as of 12/31/2007

                                                       1 YEAR             5 YEARS            10 YEARS
 INSTITUTIONAL CLASS
   Return before Taxes                                   -8.55               7.81              5.18
   Return after Taxes on Distributions                  -13.21               5.90              3.46
   Return after Taxes on Distributions
   and Sale of Fund Shares                               1.39*,**           7.01*,**           4.17*,**
 STANDARD & POOR'S (S&P) 500 INDEX
 (reflects no deductions for fees,
 expenses or taxes)                                      5.49              12.83               5.91
 BLENDED INDEX 60/35/5 (reflects no
 deductions for fees, expenses or
 taxes)                                                  6.27               9.30               6.06
 RUSSELL 1000 (Reg. TM) VALUE INDEX (reflects
 no deductions for fees, expenses or
 taxes)                                                  -0.17             14.63               7.68
 BLENDED INDEX 60/40 (reflects no
 deductions for fees, expenses or
 taxes)                                                  2.72              10.11               6.87

 *   Return after Taxes on Distributions and Sale of Fund Shares is higher than
     Return after Taxes on Distributions for the same period due to capital
     losses occurring upon redemption resulting in an assumed tax deduction for
     shareholders.

 **   The fund produced a positive total return due to income dividends and net
     realized gains distributed to the shareholders. Reinvestment of all
     dividends and distributions is assumed. Had you sold your shares at the
     period end net asset value you would have recognized a net loss. It is
     assumed that this loss will be applied against other gains producing a
     positive impact to the total Return after Taxes on Distributions and Sale
     of Fund Shares.

 STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged, capitalization-weighted
 index of 500 stocks. The index is designed to measure performance of the broad
 domestic economy through changes in the aggregate market value of 500 stocks
 representing all major industries.

 BLENDED INDEX 60/35/5 is composed of 60% S&P 500 Index, 35% Lehman Brothers
 Intermediate US Government/ Credit Index and 5% Merrill Lynch 3-Month Treasury
 Bill Index. The Lehman Brothers Intermediate US Government/ Credit Index is an
 unmanaged index comprising intermediate- and long-term government and
 investment-grade corporate debt securities. The Merrill Lynch 3-Month Treasury
 Bill Index is representative of the 3-month Treasury market.

 RUSSELL 1000 (Reg. TM) VALUE INDEX is an unmanaged index that consists of
 those stocks in the Russell 1000 Index with less-than-average growth
 orientation. Russell 1000 (Reg. TM) Index is an unmanaged price-only index of
 the 1,000 largest capitalized companies that are domiciled in the US and whose
 common stocks are traded.

12 | DWS Value Builder Fund

 BLENDED INDEX 60/40 is composed of 60% Russell 1000 Value Index and 40% Lehman
 Brothers 1-3 Year Government/Credit Index. The Lehman Brothers 1-3 Year
 Government/ Credit Index is an unmanaged index consisting of all US government
 agency and Treasury securities, as well as all investment-grade corporate debt
 securities with maturities of one to three years.

--------------------------------------------------------------------------------
Current performance may be higher or lower than the performance data quoted
above. For more recent performance information, call your financial advisor or
(800) 730-1313 or visit our Web site at www.dws-investments.com.

--------------------------------------------------------------------------------
RETURN AFTER TAXES ON DISTRIBUTIONS assumes that an investor holds fund shares
at the end of the period. The return reflects taxes only on the fund's
distributions and not on a shareholder's gain or loss from selling fund shares.

RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES assumes that an
investor sold his or her fund shares at the end of the period. The return
reflects taxes on both the fund's distributions and a shareholder's gain or
loss from selling fund shares.

                                                    DWS Value Builder Fund  | 13

HOW MUCH INVESTORS PAY

This table describes the fees and expenses that you may pay if you buy and hold
Institutional Class shares of the fund. This information doesn't include any
fees that may be charged by your financial advisor.

FEE TABLE
 SHAREHOLDER FEES, paid directly from your investment
________________________________________________________________________

 ANNUAL OPERATING EXPENSES, deducted from fund assets
________________________________________________________________________
 Management Fee1                                      0.72%
 Distribution/Service (12b-1) Fee                    None
 Other Expenses2                                      0.21
 Acquired Fund (Underlying Fund) Fees
 and Expenses3                                        0.20
 TOTAL ANNUAL OPERATING EXPENSES                      1.13
 Expense Reimbursements                               0.11
 NET ANNUAL OPERATING EXPENSES4                       1.02

1   To the extent the fund invests in other mutual funds advised by the Advisor
   and its affiliates ("Underlying Funds"), the Advisor has agreed not to
   impose its advisory fees on assets invested in such Underlying Funds.

2   "Other Expenses" include an administrative services fee paid to the Advisor
   in the amount of 0.10%.

3   "Acquired Fund (Underlying Fund) Fees and Expenses" are based on estimated
   amounts for the current fiscal year. Actual expenses may be different.

4   Through July 31, 2009, the Advisor has contractually agreed to waive its
   management fee by an amount equal to the amount of management fee borne by
   the fund as a shareholder of such other affiliated mutual funds.
   Accordingly, Net Annual Operating Expenses will vary based in part on the
   amount of the fund's investment in such other affiliated mutual funds
   (estimated at 0.11%).

Based on the costs above (including one year of capped expenses in each
period), this example helps you compare this fund's Institutional Class shares
expenses to those of other mutual funds. The example assumes the expenses above
remain the same and 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.

EXAMPLE                    1 YEAR      3 YEARS      5 YEARS      10 YEARS
 Institutional Class        $104         $348         $612       $1,365

14 | DWS Value Builder Fund

OTHER POLICIES AND RISKS

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

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

           -  As a temporary defensive measure, the fund could shift up to 100%
              of assets into investments such as money market securities, notes
              or bonds issued by the US Treasury or by agencies of the US
              government. This could prevent losses, but, while engaged in a
              temporary defensive position, the fund will not be pursuing its
              investment objective. However, portfolio management may choose
              not to use these strategies for various reasons, even in volatile
              market conditions.

           For more information

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

           If you want more information on the fund'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 fund will achieve
           its objective.

           A complete list of the fund's portfolio holdings as of the month-end
           is posted on www.dws-investments.com on or after the last day of the
           following month. This posted information generally remains
           accessible at least until the date on which the fund 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. In addition, the fund's top ten equity holdings and other
           fund information is posted on www.dws-investments.com as of the
           calendar quarter-end on or after the 15th day following quarter-end.
           The fund's Statement of Additional Information includes a
           description of the fund's policies and procedures with respect to
           the disclosure of the fund's portfolio holdings.

                                                  Other Policies and Risks  | 15

WHO MANAGES AND OVERSEES THE FUND

           The investment advisor

           Deutsche Investment Management Americas Inc. ("DIMA" or the
           "Advisor"), with headquarters at 345 Park Avenue, New York, NY
           10154, is the investment advisor for the fund. Under the oversight
           of the Board, the Advisor makes investment decisions, buys and sells
           securities for the fund 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 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, DIMA 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.

16 | Who Manages and Oversees the Fund

           MANAGEMENT FEE. The Advisor receives a management fee from the fund.
           Below is the actual rate paid by the fund for the most recent fiscal
           year, as a percentage of the fund's average daily net assets.

FUND NAME                               FEE PAID
  DWS Value Builder Fund                  0.72%

           A discussion regarding the basis for the Board's approval of the
           fund's investment management agreement is contained in the
           shareholder report for the semi-annual period ended September 30
           (see "Shareholder reports" on the back cover).

           Under a separate administrative services agreement between the fund
           and the Advisor, the fund pays the Advisor for providing most of the
           fund's administrative services.

                                         Who Manages and Oversees the Fund  | 17

Portfolio management

The following person handles the day-to-day management of the fund.

David Hone, CFA
Director of Deutsche Asset Management and Lead Portfolio Manager of the fund.
- Joined the fund in 2008.
- Joined Deutsche Asset Management in 1996 as an equity analyst for consumer
   cyclicals, consumer staples and financials.
- Prior to that, eight years of experience as an analyst for Chubb & Son.
- Portfolio manager for Large Cap Value; Lead portfolio manager for US Equity
   Income Fund Strategy: New York.
- BA, Villanova University.

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

18 | Who Manages and Oversees the Fund

FINANCIAL HIGHLIGHTS

The financial highlights are designed to help you understand recent financial
performance. The figures in the first part of the table are for a single share.
The total return figures represent the percentage that an investor in the fund
would have earned (or lost), assuming all dividends and distributions were
reinvested. This information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report, along with the
fund's financial statements, is included in the fund's annual report (see
"Shareholder reports" on the back cover).

DWS Value Builder Fund - Institutional Class

YEARS ENDED MARCH 31,                    2008             2007            2006           2005           2004
SELECTED PER SHARE DATA
-------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD                             $  23.59         $  24.02        $  23.71       $  23.73       $  16.91
--------------------------------      --------         --------        --------       --------       --------
Income (loss) from investment operations:
  Net investment income a                  .34              .44             .44            .45            .42
________________________________      ________         ________        ________       ________       ________
  Net realized and unrealized
  gain (loss)                           ( 4.02)            1.67             .95         (  .02)          6.87
--------------------------------      --------         --------        --------       --------       --------
  TOTAL FROM INVESTMENT
  OPERATIONS                            ( 3.68)            2.11            1.39            .43           7.29
________________________________      ________         ________        ________       ________       ________
Less distributions from:
  Net investment income                 (  .40)          (  .42)         (  .48)        (  .45)        (  .47)
________________________________      ________         ________        ________       ________       ________
  Net realized gains                    ( 6.11)          ( 2.12)         (  .60)             -              -
--------------------------------      --------         --------        --------       --------       --------
  TOTAL DISTRIBUTIONS                   ( 6.51)          ( 2.54)         ( 1.08)        (  .45)        (  .47)
________________________________      ________         ________        ________       ________       ________
Redemption fees                            .00*             .00*            .00*           .00*             -
--------------------------------      --------         --------        --------       --------       --------
NET ASSET VALUE, END OF
PERIOD                                $  13.40         $  23.59        $  24.02       $  23.71       $  23.73
--------------------------------      --------         --------        --------       --------       --------
Total Return (%)                        (20.46)b         9.00b             5.95           1.82          43.64
--------------------------------      --------         --------        --------       --------       --------

RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period
($ millions)                                21               44              86             89            125
________________________________      ________         ________        ________       ________       ________
Ratio of expenses before
expense reductions (%)                     .93              .95             .92            .90            .90
________________________________      ________         ________        ________       ________       ________
Ratio of expenses after
expense reductions (%)                     .92              .94             .92            .90            .90
________________________________      ________         ________        ________       ________       ________
Ratio of net investment
income(%)                                 1.74             1.84            1.85           1.94           2.02
________________________________      ________         ________        ________       ________       ________
Portfolio turnover rate(%)                  73               11              19             17             13
--------------------------------      --------         --------        --------       --------       --------

a   Based on average shares outstanding during the period.

b   Total return would have been lower had certain expenses not been reduced.

*   Amount is less than $.005.

                                                      Financial Highlights  | 19

HOW TO INVEST IN THE FUND

THE FOLLOWING PAGES TELL YOU HOW TO INVEST IN THE FUND AND WHAT TO EXPECT AS A
SHAREHOLDER. The following pages also tell you about many of the services,
choices and benefits of being a shareholder. You'll also find information on
how to check the status of your account using the method that's most convenient
for you.

If you're investing directly with DWS Investments, all of this information
applies to you. If you're investing through a "third party provider" - for
example, a workplace retirement plan, financial supermarket or financial
advisor - your provider may have its own policies or instructions and you
should follow those.

You can find out more about the topics covered here by speaking with your
FINANCIAL ADVISOR OR A REPRESENTATIVE OF YOUR WORKPLACE RETIREMENT PLAN OR
OTHER INVESTMENT PROVIDER.

Buying and Selling INSTITUTIONAL CLASS Shares

           You may buy Institutional Class shares through your securities
           dealer or through any financial institution that is authorized to
           act as a shareholder servicing agent ("financial advisor"). Contact
           them for details on how to place and pay for your order. Your
           financial advisor may also receive compensation from the Advisor
           and/or its affiliates. For more information, please see "Financial
           intermediary support payments."

           You may also buy Institutional Class shares by sending your check
           (along with a completed account application) directly to DWS
           Investments Service Company (the "transfer agent"). Your purchase
           order may not be accepted if the fund withdraws the offering of fund
           shares, the sale of fund shares has been suspended or if it is
           determined that your purchase would be detrimental to the interests
           of the fund's shareholders.

           Eligibility requirements

           You may buy Institutional Class shares if you are any of the
           following:

           -  An eligible institution (e.g., a financial institution,
              corporation, trust, estate or educational, religious or
              charitable institution).

           -  An employee benefit plan with assets of at least $50 million.

           -  A registered investment advisor or financial planner purchasing
              on behalf of clients and charging an asset-based or
              hourly fee.

           -  A client of the private banking division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              mutual funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a subadvisor to any fund in the DWS family of funds
              or a broker-dealer authorized to sell shares in the funds.

                             Buying and Selling Institutional Class Shares  | 21

           Investment minimum

           Your initial investment must be for at least $1,000,000. There are
           no minimum subsequent investment requirements.

           The minimum initial investment is waived for:

           -  Shareholders with existing accounts prior to August 13, 2004 who
              met the previous minimum investment eligibility requirement.

           -  Investment advisory affiliates of Deutsche Bank Securities, Inc.,
              DWS funds or Deutsche funds purchasing shares for the accounts of
              their investment advisory clients.

           -  Employee benefit plans with assets of at least $50 million.

           -  Clients of the private banking division of Deutsche Bank AG.

           -  Institutional clients and qualified purchasers that are clients
              of a division of Deutsche Bank AG.

           -  A current or former director or trustee of the Deutsche or DWS
              funds.

           -  An employee, the employee's spouse or life partner and children
              or stepchildren age 21 or younger of Deutsche Bank or its
              affiliates or a sub-advisor to any fund in the DWS family of
              funds or a broker-dealer authorized to sell shares of the funds.

           -  Registered investment advisors who trade through platforms
              approved by the Advisor and whose client assets in the aggregate
              meet or, in the Advisor's judgment, will meet within a reasonable
              period of time, the $1,000,000 minimum investment.

           -  Employee benefit plan platforms approved by the Advisor that
              invest in the fund through an omnibus account, and that meet or,
              in the Advisor's judgment, will meet within a reasonable period
              of time, the $1,000,000 minimum investment.

           The fund reserves the right to modify the above eligibility
           requirements and investment minimum at any time. In addition, the
           fund, in its discretion, may waive the minimum initial investment
           for specific employee benefit plans (or family of plans) whose
           aggregate investment in Institutional Class shares of the fund
           equals or exceeds the minimum initial investment amount but where a
           particular account or program may not on its own meet such minimum
           amount.

22 | Buying and Selling Institutional Class Shares

           How to contact the transfer agent

  BY PHONE:                (800) 730-1313
  FIRST INVESTMENTS        DWS Investments Service Company
  BY MAIL:                P.O. Box 219210
                          Kansas City, MO 64121-9210
  ADDITIONAL               DWS Investments Service Company
  INVESTMENTS BY          P.O. Box 219210
  MAIL:                   Kansas City, MO 64121-9210
  BY OVERNIGHT MAIL:       DWS Investments Service Company
                          210 West 10th Street
                          Kansas City, MO 64105-1614

           You can reach the automated information line, 24 hours a day,
           7 days a week by calling (800) 621-1048.

           How to open your account

  MAIL:               Complete and sign the account application that
                     accompanies this prospectus. (You may obtain
                     additional applications by calling the transfer agent.)
                     Mail the completed application along with a check
                     payable to the fund you have selected to the transfer
                     agent. Be sure to include the fund number. The
                     applicable addresses are shown under "How to
                     contact the transfer agent."
  WIRE:               Call the transfer agent to set up a wire account.
  FUND NAME AND       Please use the complete fund name. Refer to the
  FUND NUMBER:       start of "The Fund's Main Investment Strategy" above
                     for the fund number.

           Please note that your account cannot become activated until we
           receive a completed account application.

           How to BUY and SELL shares

           MAIL:

           BUYING: Send your check, payable to the fund you have selected, to
           the transfer agent. Be sure to include the fund number and your
           account number on your check. If you are investing in more than one
           fund, make your check payable to "DWS Investments" and include your
           account number, the names and numbers of each fund you have
           selected, and the dollar amount or percentage you would like
           invested in each fund. Mailing addresses are shown under "How to
           contact the transfer agent."

                             Buying and Selling Institutional Class Shares  | 23

           SELLING: Send a signed letter to the transfer agent with your name,
           your fund number and account number, the fund's name, and either the
           number of shares you wish to sell or the dollar amount you wish to
           receive. In certain circumstances, a signature guarantee may be
           required to sell shares of the fund by mail. For information about a
           signature guarantee, see "Signature Guarantee." Unless exchanging
           into another DWS fund, you must submit a written authorization to
           sell shares in a retirement account.

           WIRE:

           BUYING: You may buy shares by wire only if your account is
           authorized to do so. Please note that you or your financial advisor
           must call Institutional Investment Services at (800) 730-1313 to
           notify us in advance of a wire transfer purchase. After you inform
           Institutional Investment Services of the amount of your purchase,
           you will receive a trade confirmation number. Instruct your bank to
           send payment by wire using the wire instructions noted below. All
           wires must be received by 4:00 p.m. Eastern time the next business
           day following your purchase. If your wire is not received by 4:00
           p.m. Eastern time on the next business day after the fund receives
           your request to purchase shares, your transaction will be canceled
           at your expense and risk.

  BANK NAME:        State Street Bank Boston
  ROUTING NO:       011000028
  ATTN:             DWS Investments
  DDA NO:           9903-5552
  FBO:              (Account name) (Account number)
  CREDIT:           (Fund name, Fund number and, if applicable, class
                   name) (see "How to open your account")

           Refer to your account statement for the account name and number.
           Wire transfers normally take two or more hours to complete. Wire
           transfers may be restricted on holidays and at certain other times.

           SELLING: You may sell shares by wire only if your account is
           authorized to do so. You will be paid for redeemed shares by wire
           transfer of funds to your financial advisor or bank upon receipt of
           a duly authorized redemption request as promptly as feasible. For
           your protection, you may not change the destination bank account
           over the phone. To sell by wire,

24 | Buying and Selling Institutional Class Shares

           contact your financial advisor or Institutional Investment Services
           at (800) 730-1313. After you inform Institutional Investment
           Services of the amount of your redemption, you will receive a trade
           confirmation number. The minimum redemption by wire is $1,000. We
           must receive your order by 4:00 p.m. Eastern time to wire your
           account the next business day.

           TELEPHONE TRANSACTIONS:

           You may place orders to buy and sell over the phone by calling your
           financial advisor or Institutional Investment Services at (800)
           730-1313. If your shares are in an account with the transfer agent,
           you may (1) redeem by check in an amount up to $100,000, or by wire
           (minimum $1,000), or (2) exchange the shares for Institutional
           shares of another DWS fund by calling the transfer agent.

           You may make regular investments from a bank checking account. For
           more information on setting up an automatic investment plan or
           payroll investment plan, call Institutional Investment Services at
           (800) 730-1313.

           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 fund, to
           selected financial advisors in connection with the sale and/or
           distribution of fund 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 fund, any record
           keeping/sub-transfer agency/networking fees payable by the fund
           (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 fund
           with "shelf space" or access to a third party platform or fund
           offering list or other marketing programs, including, without
           limitation, inclusion of the fund on preferred or recommended sales
           lists,

                             Buying and Selling Institutional Class Shares  | 25

           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 fund
           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 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 fund serviced and maintained by the financial advisor,
           .10% to .25% of sales of the fund 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 fund or of
           any particular share class of the fund. 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 fund. Additional information regarding these
           revenue sharing payments is included in the fund'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).

26 | Buying and Selling Institutional Class Shares

           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
           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 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.

POLICIES YOU SHOULD KNOW ABOUT

           Along with the information on the previous pages, the policies below
           may affect you as a shareholder. Some of this information, such as
           the section on distributions and taxes, applies to all investors,
           including those investing through a financial advisor.

           If you are investing through a financial advisor or through a
           retirement plan, check the materials you received from them about
           how to buy and sell shares because particular financial advisors or
           other intermediaries may adopt policies, procedures or limitations
           that are separate from those described by the fund. Please note that
           a financial advisor may charge fees separate from those charged by
           the fund and may be compensated by the fund.

                                            Policies You Should Know About  | 27

           Keep in mind that the information in this prospectus applies only to
           the shares offered herein. Other share classes are described in
           separate prospectuses and have different fees, requirements and
           services.

           In order to reduce the amount of mail you receive and to help reduce
           expenses, we generally send a single copy of any shareholder report
           and prospectus to each household. If you do not want the mailing of
           these documents to be combined with those for other members of your
           household, please contact your financial advisor or call (800)
           730-1313.

           Policies about transactions

           THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
           is open. The fund calculates its share price for each class every
           business day, as of the close of regular trading on the New York
           Stock Exchange (typically 4:00 p.m. Eastern time, but sometimes
           earlier, as in the case of scheduled half-day trading or unscheduled
           suspensions of trading). You can place an order to buy or sell
           shares at any time.

           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 person who opens an account. What this means to you:
           When you open an account, we will ask for your name, address, date
           of birth and other information that will allow us to identify you.
           Some or all of this information will be used to verify the identity
           of all persons opening an account.

           We might request additional information about you (which may include
           certain documents, such as articles of incorporation for companies)
           to help us verify your identity and, in some cases, the information
           and/or documents may be required to conduct the verification. The
           information and documents will be used solely to verify your
           identity.

           We will attempt to collect any missing required and requested
           information by contacting you or your financial advisor. If we are
           unable to obtain this information within the time frames established
           by the fund, then we may reject your application and order.

28 | Policies You Should Know About

           The fund will not invest your purchase until all required and
           requested identification information has been provided and your
           application has been submitted in "good order." After we receive all
           the information, your application is deemed to be in good order and
           we accept your purchase, you will receive the net asset value per
           share next calculated.

           If we are unable to verify your identity within time frames
           established by the fund, after a reasonable effort to do so, you
           will receive written notification.

           With certain limited exceptions, only US residents may invest in the
           fund.

           Because orders placed through a financial advisor must be forwarded
           to the transfer agent before they can be processed, you'll need to
           allow extra time. Your financial advisor should be able to tell you
           approximately when your order will be processed. It is the
           responsibility of your financial advisor to forward your order to
           the transfer agent in a timely manner.

           SUB-MINIMUM BALANCES. The fund may redeem your shares and close your
           account on 60 days' notice if it fails to meet the minimum account
           balance requirement of $1,000,000 ($250,000 for shareholders with
           existing accounts prior to August 13, 2004) for any reason.

            MARKET TIMING POLICIES AND PROCEDURES. Short-term and excessive
            trading of fund shares may present risks to long-term shareholders,
            including potential dilution in the value of fund shares,
            interference with the efficient management of the fund's 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 fund 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 fund (e.g.,
            "time zone arbitrage"). The fund discourages short-term and
            excessive trading and has adopted policies and procedures that are
            intended to detect and deter short-term and excessive trading.

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

The DWS Investments Web site can be a valuable resource for shareholders with
Internet access. Go to WWW.DWS-INVESTMENTS.COM to get up-to-date information,
review balances or even place orders for exchanges.

                                            Policies You Should Know About  | 29

           The fund also reserves the right to reject or cancel a purchase or
           exchange order for any reason without prior notice. For example, the
           fund 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 fund. The fund,
           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 fund's
           shares. The fund may take other trading activity into account if the
           fund 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
           DWS Fund (excluding money market funds) over a rolling 12-month
           period. Shareholders with four or more roundtrip transactions in the
           same DWS Fund within a rolling 12-month period generally will be
           blocked from making additional purchases of, or exchanges into, that
           DWS Fund. The fund has sole discretion whether to remove a block
           from a shareholder's account. The rights of a shareholder to redeem
           shares of a DWS Fund are not affected by the four roundtrip
           transaction limitation.

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

           In certain circumstances where shareholders hold shares of the fund
           through a financial intermediary, the fund may rely upon the
           financial intermediary's policy to deter short-term or excessive
           trading if the Advisor believes that the financial intermediary's
           policy is reasonably designed to detect and deter transactions that
           are not in the best interests of the fund. A financial
           intermediary's policy relating to short-term or excessive

30 | Policies You Should Know About

           trading may be more or less restrictive than the DWS Funds' policy,
           may permit certain transactions not permitted by the DWS Funds'
           policies, or prohibit transactions not subject to the DWS Funds'
           policies.

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

           In addition, if the fund invests some portion of its assets in
           foreign securities, it has adopted certain fair valuation practices
           intended to protect the fund 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 fund. (See "How the fund
           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 omnibus accounts maintained by
           broker-dealers or other financial intermediaries. The Advisor
           reviews trading activity at the omnibus 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 omnibus level,
           the Advisor will contact the financial intermediary to request
           underlying shareholder level activity. Depending on the amount of
           fund shares held in such omnibus accounts (which may represent most
           of the fund's shares) short-term and/or excessive trading of fund
           shares could adversely affect long-term shareholders in the fund. If
           short-term or excessive trading is identified, the Advisor will take
           appropriate action.

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

           THE AUTOMATED INFORMATION LINE IS AVAILABLE 24 HOURS A DAY BY
           CALLING (800) 621-1048. You can use our automated phone services to
           get information on DWS funds generally and on accounts held directly
           at DWS Investments.

                                            Policies You Should Know About  | 31

           QUICKBUY AND QUICKSELL let you set up a link between a DWS fund
           account and a bank account. Once this link is in place, you can move
           money between the two with a phone call. You'll need to make sure
           your bank has Automated Clearing House (ACH) services. Transactions
           take two to three days to be completed and there is a $50 minimum
           and a $250,000 maximum. To set up QuickBuy or QuickSell on a new
           account, see the account application; to add it to an existing
           account, call (800) 730-1313.

           TELEPHONE AND ELECTRONIC TRANSACTIONS. Generally, you are
           automatically entitled to telephone and electronic transaction
           privileges, but you may elect not to have them when you open your
           account or by contacting Institutional Investment Services at (800)
           730-1313 at a later date.

           Since many transactions may be initiated by telephone or
           electronically, it's important to understand that as long as we take
           reasonable steps to ensure that an order to purchase or redeem
           shares is genuine, such as recording calls or requesting
           personalized security codes or other information, we are not
           responsible for any losses that may occur as a result. For
           transactions conducted over the Internet, we recommend the use of a
           secure Internet browser. In addition, you should verify the accuracy
           of your confirmation statements immediately after you receive them.

           THE FUND DOES NOT ISSUE SHARE CERTIFICATES. However, if you
           currently have shares in certificated form, you must include the
           share certificates properly endorsed or accompanied by a duly
           executed stock power when exchanging or redeeming shares. You may
           not exchange or redeem shares in certificate form by telephone or
           via the Internet.

           WHEN YOU ASK US TO SEND OR RECEIVE A WIRE, please note that while we
           don't charge a fee to send or receive wires, it's possible that your
           bank may do so. Wire transactions are generally completed within 24
           hours. The fund can only send wires of $1,000 or more and accept
           wires of $50 or more.

           THE FUND ACCEPTS PAYMENT FOR SHARES ONLY IN US DOLLARS by check
           drawn on a US bank, bank or Federal Funds wire transfer or by
           electronic bank transfer. Please note that the fund does not accept
           payment in the following forms: cash, money orders, traveler's
           checks, starter checks, checks drawn on foreign banks or checks
           issued by credit card companies or Internet-based companies. In
           addition, the fund generally does not accept third

32 | Policies You Should Know About

           party checks. A third party check is any check not made payable
           directly to DWS Investments, except for any check payable to you
           from one of your other DWS accounts. Under certain circumstances,
           the fund may accept a third party check (i) for retirement plan
           contributions, asset transfers and rollovers, (ii) as contributions
           into Uniform Gift to Minors Act/Uniform Transfers to Minors Act
           accounts, (iii) payable from acceptable US and state government
           agencies, and (iv) from other DWS funds (such as a redemption or
           dividend check) for investment only in a similarly registered
           account. Subject to the foregoing, checks should normally be payable
           to DWS Investments and drawn by you or a financial institution on
           your behalf with your name or account number included with the
           check.

           SIGNATURE GUARANTEE. When you want to sell more than $100,000 worth
           of shares or send proceeds to a third party or to a new address,
           you'll usually need to place your order in writing and include a
           signature guarantee. However, if you want money wired to a bank
           account that is already on file with us, you don't need a signature
           guarantee. Also, generally you don't need a signature guarantee for
           an exchange, although we may require one in certain other
           circumstances.

           A signature guarantee is simply a certification of your signature -
           a valuable safeguard against fraud. You can get a signature
           guarantee from an eligible guarantor institution, including
           commercial banks, savings and loans, trust companies, credit unions,
           member firms of a national stock exchange or any member or
           participant of an approved signature guarantor program. Note that
           you can't get a signature guarantee from a notary public and we must
           be provided the original guarantee.

           SELLING SHARES OF TRUST ACCOUNTS AND BUSINESS OR ORGANIZATION
           ACCOUNTS may require additional documentation. Please call (800)
           730-1313 or contact your financial advisor for more information.

           MONEY FROM SHARES YOU SELL is normally sent out within one
           business day of when your order is processed (not when it is
           received), although it could be delayed for up to seven days. There
           are circumstances when it could be longer, including, but not
           limited to, when you are selling shares you bought recently by
           check or ACH (the funds will be placed under a 10 calendar day hold
           to ensure good funds) or when unusual circumstances prompt the SEC
           to allow further delays. Certain expedited

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

If you ever have difficulty placing an order by phone or Internet, you can send
us your order in writing.

                                            Policies You Should Know About  | 33

           redemption processes (e.g., redemption proceeds by wire) may also be
           delayed or unavailable when you are selling shares recently
           purchased or in the event of the closing of the Federal Reserve wire
           payment system. The fund reserves the right to suspend or postpone
           redemptions as permitted pursuant to Section 22(e) of the Investment
           Company Act of 1940. 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 the fund or the fair determination of the value
           of the fund'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. For
           additional rights reserved by the fund, please see "Other rights we
           reserve."

           You may obtain additional information about other ways to sell your
           shares by contacting your financial advisor.

           How the fund calculates share price

           To calculate net asset value, or NAV, each share class uses the
           following equation:

            TOTAL ASSETS - TOTAL LIABILITIES
           -----------------------------------------    =    NAV
               TOTAL NUMBER OF SHARES OUTSTANDING

           The price at which you buy and sell shares is based on the NAV per
           share next calculated after the order is received by the transfer
           agent.

           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 fund's 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

34 | Policies You Should Know About

           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. It is expected that the
           greater the percentage of fund assets that is invested in non-US
           securities, the more extensive will be the fund's use of fair value
           pricing. This is intended to reduce the fund's exposure to "time
           zone arbitrage" and other harmful trading practices. (See "Market
           timing policies and procedures.")

           TO THE EXTENT THAT THE 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
           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 fund
           shares. Price changes in the securities the fund owns may ultimately
           affect the price of fund shares the next time the NAV is
           calculated.)

           Other rights we reserve

           You should be aware that we may do any of the following:

           -  withdraw or suspend the offering of shares at any time

           -  withhold a portion of your distributions and redemption proceeds
              for federal income tax purposes if we have been notified by the
              IRS that you are subject to backup withholding or if you fail to
              provide us with the correct taxpayer ID number and certain
              certifications including certification that you are not subject
              to backup withholding

           -  reject a new account application if you don't provide any
              required or requested identifying information, or for any other
              reason

                                            Policies You Should Know About  | 35

            -  refuse, cancel, limit or rescind any purchase or exchange order,
               without prior notice; freeze any account (meaning you will not be
               able to purchase fund shares in your account); suspend account
               services; and/or involuntarily redeem your account if we think
               that the account is being used for fraudulent or illegal
               purposes; one or more of these actions will be taken when, at our
               sole discretion, they are deemed to be in the fund's best
               interests or when the fund is requested or compelled to do so by
               governmental authority or by applicable law

           -  close and liquidate your account if we are unable to verify your
              identity, or for other reasons; if we decide to close your
              account, your fund shares will be redeemed at the net asset value
              per share next calculated after we determine to close your
              account; you may recognize a gain or loss on the redemption of
              your fund shares and you may incur a tax liability

           -  pay you for shares you sell by "redeeming in kind," that is, by
              giving you 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 fund
              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 fund's net assets, whichever is less

           -  change, add or withdraw various services, fees and account
              policies (for example, we may adjust the fund's investment
              minimums at any time)

36 | Policies You Should Know About

UNDERSTANDING DISTRIBUTIONS AND TAXES

           The fund intends to distribute to its shareholders virtually all of
           its net earnings. The fund can earn money in two ways: by receiving
           interest, dividends or other income from securities it holds and by
           selling securities for more than it paid for them. (The fund's
           earnings are separate from any gains or losses stemming from your
           own purchase and sale of shares.) The fund may not always pay a
           dividend or other distribution for a given period.

           THE FUND INTENDS TO PAY DISTRIBUTIONS OF SUBSTANTIALLY ALL OF ITS
           INCOME QUARTERLY. The fund intends to pay distributions from
           realized capital gains annually, usually in December. If necessary,
           the fund may distribute at other times as needed.

           Dividends or distributions declared and payable to shareholders of
           record in the last quarter of a given calendar year are treated for
           federal income tax purposes as if they were received on December 31
           of that year, provided such dividends or distributions are paid by
           the end of the following January.

           For federal income tax purposes, income and capital gains
           distributions are generally taxable to shareholders. However,
           dividends and distributions received by retirement plans qualifying
           for tax exemption under federal income tax laws generally will not
           be taxable.

            YOU CAN CHOOSE HOW TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS. You
            can have them all automatically reinvested in fund shares (at NAV),
            all deposited directly to your bank account or all sent to you by
            check, have one type reinvested and the other sent to you by check
            or have them invested in a different fund. Tell us your preference
            on your application. If you don't indicate a preference, your
            dividends and distributions will all be reinvested in shares of the
            fund without a sales charge (if applicable). Distributions are
            treated the same for federal income tax purposes whether you receive
            them in cash or reinvest them in additional shares. Under the terms
            of employer-sponsored qualified plans, and retirement plans,
            reinvestment (at NAV) is the only option.

           BUYING, SELLING OR EXCHANGING FUND SHARES WILL USUALLY HAVE FEDERAL
           INCOME TAX CONSEQUENCES FOR YOU (except in employer-sponsored
           qualified plans, IRAs or other tax-advantaged accounts). Your sale
           of shares may result in a capital

THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS

Because each shareholder's tax situation is unique, ask your tax professional
about the tax consequences of your investments, including any state and local
tax consequences.

                                     Understanding Distributions and Taxes  | 37

           gain or loss. The gain or loss will be long-term or short-term
           depending on how long you owned the shares that were sold. For
           federal income tax purposes, an exchange is treated the same as a
           sale.

           THE FEDERAL INCOME TAX STATUS of the fund's earnings you receive and
           your own fund transactions generally depends on their type:

GENERALLY TAXED AT LONG-TERM                          GENERALLY TAXED AT ORDINARY
CAPITAL GAIN RATES:                                   INCOME RATES:
DISTRIBUTIONS FROM THE FUND
- gains from the sale of                              -  gains from the sale of
  securities held (or treated as                         securities held by the fund for
  held) by the fund for more                             one year or less
  than one year                                       -  all other taxable income
- qualified dividend income
TRANSACTIONS INVOLVING FUND
SHARES
- gains from selling fund                             -  gains from selling fund
  shares held for more than                              shares held for one year or
  one year                                               less

           ANY DIRECT INVESTMENTS IN FOREIGN SECURITIES BY THE FUND MAY BE
           SUBJECT TO FOREIGN WITHHOLDING TAXES. In that case, the fund's yield
           on those securities would generally be decreased. Shareholders
           generally will not be entitled to claim a credit or deduction with
           respect to foreign taxes paid by the fund. In addition, any
           investments in foreign securities or foreign currencies may increase
           or accelerate the fund's recognition of ordinary income and may
           affect the timing or amount of the fund's distributions. If you
           invest in the fund through a taxable account, your after-tax return
           could be negatively impacted.

           Investments in certain debt obligations or other securities may
           cause the fund to recognize taxable income in excess of the cash
           generated by them. Thus, the fund could be required at times to
           liquidate other investments in order to satisfy its distribution
           requirements.

           For taxable years beginning before January 1, 2011, distributions to
           individuals and other noncorporate shareholders of investment income
           designated by the fund as derived from qualified dividend income are
           eligible for taxation for federal income tax purposes at the more
           favorable long-term capital gain rates. Qualified dividend income
           generally includes

38 | Understanding Distributions and Taxes

           dividends received by the fund from domestic and some foreign
           corporations. It does not include income from investments in debt
           securities  or, generally, from REITs. In addition, the fund must
           meet certain holding period and other requirements with respect to
           the dividend-paying stocks in its portfolio and the shareholder must
           meet certain holding period and other requirements with respect to
           the fund's shares for the lower tax rates to apply.

           For taxable years beginning before January 1, 2011, the maximum
           federal income tax rate imposed on long-term capital gains
           recognized by individuals and other noncorporate shareholders has
           been temporarily reduced to 15%, in general, with lower rates
           applying to taxpayers in the 10% and 15% rate brackets. For taxable
           years beginning on or after January 1, 2011, the long-term capital
           gain rate is scheduled to return to 20%.

           YOUR FUND WILL SEND YOU DETAILED FEDERAL INCOME TAX INFORMATION
           EVERY JANUARY. These statements tell you the amount and the federal
           income tax classification of any dividends or distributions you
           received. They also have certain details on your purchases and sales
           of shares.

           IF YOU INVEST RIGHT BEFORE THE FUND PAYS A DIVIDEND, you'll be
           getting some of your investment back as a taxable dividend. You can
           avoid this by investing after the fund pays a dividend. In
           tax-advantaged retirement accounts you do not need to worry about
           this.

           If the fund's distributions exceed its income and capital gains
           realized in any year, all or a portion of those distributions may be
           treated for tax purposes as a return of capital. A return of capital
           will generally not be taxable to you but will reduce the cost basis
           of your shares and result in a higher capital gain or a lower
           capital loss when you sell your shares.

           CORPORATIONS are taxed at the same rates on ordinary income and
           capital gains but may be eligible for a dividends-received deduction
           for a portion of the income dividends they receive from the fund,
           provided certain holding period and other requirements are met.

                                     Understanding Distributions and Taxes  | 39

           The above discussion summarizes certain federal income tax
           consequences for shareholders who are US persons. If you are a
           non-US person, please consult your own tax advisor with respect to
           the US tax consequences to you of an investment in the fund. For
           more information, see "Taxes" in the Statement of Additional
           Information.

40 | Understanding Distributions and Taxes

APPENDIX
--------------------------------------------------------------------------------
           Hypothetical Expense Summary

           Using the annual fund operating expense ratios presented in the fee
           tables in the fund 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 fund held
           for the next 10 years and the impact of such fees and expenses on
           fund returns for each year and cumulatively, assuming a 5% return
           for each year. The tables also assume that all dividends and
           distributions are reinvested. The annual fund expense ratios shown
           are net of any contractual fee waivers or expense reimbursements, if
           any, for the period of the contractual commitment. The tables do not
           reflect redemption fees, if any, which may be payable upon
           redemption. If redemption fees were shown, the "Hypothetical
           Year-End Balance After Fees and Expenses" amounts shown would be
           lower and the "Annual Fees and Expenses" amounts shown would be
           higher. 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 fund 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 fund's prospectus to consider the
           investment objectives, risks, expenses and charges of the fund prior
           to investing.

                                                                  Appendix  | 41

DWS Value Builder Fund - Institutional Class

              MAXIMUM           INITIAL HYPOTHETICAL                 ASSUMED RATE
           SALES CHARGE:             INVESTMENT:                      OF RETURN:
               0.00%                   $10,000                            5%
                                                              HYPOTHETICAL
             CUMULATIVE        ANNUAL       CUMULATIVE          YEAR-END
           RETURN BEFORE        FUND       RETURN AFTER      BALANCE AFTER      ANNUAL FEES
              FEES AND        EXPENSE        FEES AND           FEES AND            AND
YEAR          EXPENSES         RATIOS        EXPENSES           EXPENSES         EXPENSES
   1            5.00%        1.02%              3.98%       $ 10,398.00        $   104.03
   2           10.25%        1.13%              8.00%       $ 10,800.40        $   119.77
   3           15.76%        1.13%             12.18%       $ 11,218.38        $   124.41
   4           21.55%        1.13%             16.53%       $ 11,652.53        $   129.22
   5           27.63%        1.13%             21.03%       $ 12,103.48        $   134.22
   6           34.01%        1.13%             25.72%       $ 12,571.89        $   139.42
   7           40.71%        1.13%             30.58%       $ 13,058.42        $   144.81
   8           47.75%        1.13%             35.64%       $ 13,563.78        $   150.42
   9           55.13%        1.13%             40.89%       $ 14,088.70        $   156.24
  10           62.89%        1.13%             46.34%       $ 14,633.93        $   162.28
  TOTAL                                                                        $ 1,364.82

42 | Appendix

TO GET MORE INFORMATION

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

STATEMENT OF ADDITIONAL INFORMATION (SAI) - This tells you more about the
fund'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 fund, call (800) 730-1313, or contact DWS Investments at the address listed
below. The fund'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 fund 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 fund,
including the fund'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.

DWS INVESTMENTS      SEC                     DISTRIBUTOR
-----------------    --------------------    ------------------------------
PO Box 219210        100 F Street, N.E.      DWS Investments Distributors,
Kansas City, MO      Washington, D.C.        Inc.
64121-9210           20549-0102              222 South Riverside Plaza
WWW.DWS-             WWW.SEC.GOV             Chicago, IL 60606-5808
INVESTMENTS.COM      (800) SEC-0330          (800) 621-1148
(800) 730-1313

SEC FILE NUMBER:
DWS Value Builder Fund, Inc.        DWS Value Builder Fund    811-06600

(08/01/08) DVBF-1-IN
 [RECYCLE GRAPHIC APPEARS HERE]
                                                                       [Logo]DWS
                                                                      INVESTMENT
                                                             Deutsche Bank Group

Supplement to the currently effective Statements of Additional Information for
the listed Funds:

----------------------------------------------------------------------------------------------------

DWS Alternative Asset Allocation Plus Fund              DWS Gold & Precious Metals Fund
DWS Balanced Fund                                       DWS Growth & Income Fund
DWS Blue Chip Fund                                      DWS High Income Fund
DWS California Tax-Free Income Fund                     DWS International Fund
DWS Capital Growth Fund                                 DWS International Value Opportunities Fund
DWS Communications Fund                                 DWS Large Cap Value Fund
DWS Core Plus Income Fund                               DWS Large Company Growth Fund
DWS Disciplined Long/Short Growth Fund                  DWS Latin America Equity Fund
DWS Disciplined Long/Short Value Fund                   DWS LifeCompass 2015 Fund
DWS Disciplined Market Neutral Fund                     DWS LifeCompass 2020 Fund
DWS Dreman Concentrated Value Fund                      DWS LifeCompass 2030 Fund
DWS Dreman High Return Equity Fund                      DWS LifeCompass 2040 Fund
DWS Dreman Mid Cap Value Fund                           DWS LifeCompass Retirement Fund
DWS Dreman Small Cap Value Fund                         DWS Massachusetts Tax-Free Fund
DWS Emerging Markets Equity Fund                        DWS New York Tax-Free Income Fund
DWS Emerging Markets Fixed Income Fund                  DWS RREEF Global Infrastructure Fund
DWS Enhanced S&P 500 Index Fund                         DWS RREEF Global Real Estate Securities Fund
DWS Equity Income Fund                                  DWS Short-Term Municipal Bond Fund
DWS Europe Equity Fund                                  DWS Small Cap Core Fund
DWS Floating Rate Plus Fund                             DWS Strategic Government Securities Fund
DWS Global Bond Fund                                    DWS Strategic Income Fund
DWS Global Opportunities Fund                           DWS Technology Fund
DWS Global Thematic Fund                                DWS Value Builder Fund

----------------------------------------------------------------------------------------------------

The following replaces similar language in the "Investment Policies and
Techniques -- General Characteristics of Options" section of the Funds'
Statements of Additional Information:

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.

               Please Retain This Supplement for Future Reference

October 22, 2008

                           SUPPLEMENT TO THE CURRENTLY EFFECTIVE STATEMENTS OF ADDITIONAL INFORMATION
                                                  OF EACH OF THE LISTED FUNDS:

                                                         ---------------------

Cash Account Trust                           DWS Equity Partners Fund                    DWS Mid Cap Growth Fund
    Government and Agency Securities         DWS Europe Equity Fund                      DWS Money Market Prime Series
    Portfolio                                DWS Floating Rate Plus Fund                 DWS Money Market Series
    Money Market Portfolio                   DWS Global Bond Fund                        DWS New York Tax-Free Income Fund
    Tax-Exempt Portfolio                     DWS Global Opportunities Fund               DWS RREEF Global Infrastructure Fund
Cash Management Fund Institutional           DWS Global Thematic Fund                    DWS RREEF Global Real Estate Securities
Cash Reserve Fund, Inc.                      DWS GNMA Fund                                   Fund
    Prime Series                             DWS Gold & Precious Metals Fund             DWS RREEF Real Estate Securities Fund
Cash Reserves Fund Institutional             DWS Growth & Income Fund                    DWS S&P 500 Index Fund
DWS Alternative Asset Allocation Plus Fund   DWS Health Care Fund                        DWS Short Duration Fund
DWS Balanced Fund                            DWS High Income Fund                        DWS Short Duration Plus Fund
DWS Blue Chip Fund                           DWS High Income Plus Fund                   DWS Short-Term Municipal Bond Fund
DWS California Tax-Free Income Fund          DWS Inflation Protected Plus Fund           DWS Small Cap Core Fund
DWS Capital Growth Fund                      DWS Intermediate Tax/AMT Free Fund          DWS Small Cap Growth Fund
DWS Climate Change Fund                      DWS International Fund                      DWS Strategic Government Securities Fund
DWS Commodity Securities Fund                DWS International Select Equity Fund        DWS Strategic High Yield Tax-Free Fund
DWS Communications Fund                      DWS International Value Opportunities Fund  DWS Strategic Income Fund
DWS Core Fixed Income Fund                   DWS Japan Equity Fund                       DWS Target 2010 Fund
DWS Core Plus Allocation Fund                DWS Large Cap Value Fund                    DWS Target 2011 Fund
DWS Core Plus Income Fund                    DWS Large Company Growth Fund               DWS Target 2012 Fund
DWS Disciplined Long/Short Growth Fund       DWS Latin America Equity Fund               DWS Target 2013 Fund
DWS Disciplined Long/Short Value Fund        DWS LifeCompass 2015 Fund                   DWS Target 2014 Fund
DWS Disciplined Market Neutral Fund          DWS LifeCompass 2020 Fund                   DWS Technology Fund
DWS Dreman Concentrated Value Fund           DWS LifeCompass 2030 Fund                   DWS U.S. Bond Index Fund
DWS Dreman High Return Equity Fund           DWS LifeCompass 2040 Fund                   DWS Value Builder Fund
DWS Dreman Mid Cap Value Fund                DWS LifeCompass Income Fund                 Investors Cash Trust
DWS Dreman Small Cap Value Fund              DWS LifeCompass Protect Fund                    Treasury Portfolio
DWS EAFE(R) Equity Index Fund                  DWS LifeCompass Retirement Fund             NY Tax Free Money Fund
DWS Emerging Markets Equity Fund             DWS Lifecycle Long Range Fund               Tax Free Money Fund Investment
DWS Emerging Markets Fixed Income Fund       DWS Managed Municipal Bond Fund             Tax-Exempt California Money Market Fund
DWS Enhanced S&P 500 Index Fund              DWS Massachusetts Tax-Free Fund
DWS Equity 500 Index Fund                    DWS Micro Cap Fund
DWS Equity Income Fund

--------------------------------------------------------------------------------

The following information replaces similar disclosure under "Revenue Sharing" in
the  "Purchase  and  Redemption  of Shares"  section of each  Fund's/Portfolio's
Statements of Additional Information:

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  Fund  shares  or the  retention  and/or  servicing  of
investors and Fund 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 each
Fund, to financial  advisors in connection with the sale and/or  distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund 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 each Fund  (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  each Fund with "shelf  space" or access to a
third  party  platform  or fund  offering  list,  or  other  marketing  programs
including,   without  limitation,   inclusion  of  each  Fund  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 each Fund  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 Fund serviced and  maintained by the  financial  advisor,  .05% to
..25% of sales of the Fund 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 Fund or of any particular share class
of the Fund. 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
Fund.

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,  each  Fund  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 Clearing/Wachovia Securities
Fiserv Trust Company
HD Vest Investment Securities, Inc.
ING Group
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wachovia Securities
Wells Fargo Investments, LLC

                                       2

Channel: Cash Product Platform
Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
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
Huntleigh Securities
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
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.
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

                                       3

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.

               Please Retain This Supplement for Future Reference

September 25, 2008
DMF-39XX

Supplement to the currently effective  Statements of Additional  Information for
the listed Funds:

DWS Balanced Fund               DWS International Select Equity Fund
DWS International Fund          DWS Lifecycle Long Range Fund

--------------------------------------------------------------------------------

The following information supplements and replaces information for Matthias
Knerr contained in the "Management of the Fund" section of DWS Balanced Fund and
DWS Lifecycle Long Range Fund's Statements of Additional Information. This
information supplements and replaces similar information for the entire
portfolio management team contained in the "Management of the Funds" and
"Management of the Fund" section of DWS International Fund and DWS International
Select Equity Fund's Statements of Additional Information, respectively.

Fund Ownership of Portfolio Managers

The following table shows the dollar range of shares owned  beneficially  and of
record by each  member of the Fund's  portfolio  management  team in the Fund 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. For Joseph Axtell, this information is provided as
of June 30, 2008.

                              Dollar Range of     Dollar Range Of All DWS
          Name of              Fund Shares              Fund Shares
     Portfolio Manager             Owned                   Owned
     -----------------             -----                   -----

Joseph Axtell                      None            $500,001 - $1,000,000

For DWS International Select Equity Fund only:

                              Dollar Range of     Dollar Range Of All DWS
          Name of              Fund Shares              Fund Shares
     Portfolio Manager             Owned                   Owned
     -----------------             -----                   -----

Joseph Axtell                $10,001 - $50,000     $500,001 - $1,000,000

Conflicts of Interest

In addition to managing the assets of the Fund,  the Fund'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.  For Joseph Axtell, this information
is provided as of June 30, 2008.

September 2, 2008

Other SEC Registered Investment Companies Managed:

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

Joseph Axtell                 8           $2,551,730,243              0                    $0

Other Pooled Investment Vehicles Managed:

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

Joseph Axtell               1                 $253,829                  0                    $0

Other Accounts Managed:

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

Joseph Axtell               3               $284,908,162                0                    $0

               Please Retain This Supplement for Future Reference

September 2, 2008

                          DWS Value Builder Fund, Inc.

                             DWS Value Builder Fund

                Class A, Class B, Class C and Institutional Class

                       STATEMENT OF ADDITIONAL INFORMATION
                                 August 1, 2008

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectuses, dated August 1, 2008 (Classes A, B, C and
Institutional), as amended from time to time (each a "Prospectus" and
collectively, the "Prospectuses"), for DWS Value Builder Fund (the "Fund"), a
series of DWS Value Builder Fund, Inc. (the "Corporation"), copies of which may
be obtained without charge by contacting DWS Investments Distributors, Inc., 222
South Riverside Plaza, Chicago, Illinois 60606, (800) 621-1148 or from the firm
from which this Statement of Additional Information was obtained and are
available along with other materials on the Securities and Exchange Commission's
(the "SEC") Internet Web site (http://www.sec.gov).

Portions of the Annual Report to Shareholders dated March 31, 2008 are
incorporated herein by reference and are deemed to be part of this Statement of
Additional Information as specified herein. A copy of the Fund's Annual Report
may be obtained without charge by calling the Fund at the toll-free number (800)
621-1048.

This Statement of Additional Information ("SAI") is incorporated by reference
into the corresponding Prospectuses for each class of shares of the Fund.

                                TABLE OF CONTENTS

                                                                            Page

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

INVESTMENT POLICIES AND TECHNIQUES............................................2
         Investment Techniques................................................2
         Portfolio Holdings .................................................24

MANAGEMENT OF THE FUND.......................................................26
         Investment Advisor..................................................26

FUND SERVICE PROVIDERS.......................................................31
         Administrator.......................................................31
         Distributor.........................................................32
         Custodian...........................................................38
         Transfer Agent......................................................38
         Legal Counsel.......................................................39
         Independent Registered Public Accounting Firm.......................39

PORTFOLIO TRANSACTIONS.......................................................39

PURCHASE AND REDEMPTION OF SHARES............................................42

DIVIDENDS....................................................................56

TAXES........................................................................57

NET ASSET VALUE..............................................................64

DIRECTORS AND OFFICERS.......................................................65

FUND ORGANIZATION............................................................75

PROXY VOTING GUIDELINES......................................................76

FINANCIAL STATEMENTS.........................................................77

ADDITIONAL INFORMATION.......................................................77

APPENDIX.....................................................................78

                             INVESTMENT RESTRICTIONS

The investment program for DWS Value Builder Fund (the "Fund") is subject to a
number of investment restrictions which reflect self-imposed standards as well
as federal and state regulatory limitations. The investment restrictions recited
below are in addition to those described in the Fund's Prospectuses, are matters
of fundamental policy and may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. The vote of a majority of the
outstanding shares of the Fund means the lesser of: (i) 67% or more of the
shares present at a shareholder meeting at which the holders of more than 50% of
the shares are present or represented by proxy or (ii) more than 50% of the
outstanding shares of the Fund.

The Fund has elected to be treated as a diversified investment company, as that
term is used in the Investment Company Act of 1940, as amended (the "1940 Act"),
and as interpreted or modified by regulatory authority having jurisdiction, from
time to time.

As a matter of fundamental policy:

1.   The Fund may not borrow money,  except as permitted  under the 1940 Act, as
     amended,  and as  interpreted  or modified by regulatory  authority  having
     jurisdiction, from time to time.

2.   The Fund may not issue senior  securities,  except as  permitted  under the
     1940  Act,  as  amended,  and as  interpreted  or  modified  by  regulatory
     authority having jurisdiction, from time to time.

3.   The Fund may not concentrate its investments in a particular  industry,  as
     that  term is used in the 1940  Act,  as  amended,  and as  interpreted  or
     modified by regulatory authority having jurisdiction, from time to time.

4.   The Fund may not engage in the business of underwriting  securities  issued
     by  others,  except  to the  extent  that the Fund may be  deemed  to be an
     underwriter in connection with the disposition of portfolio securities.

5.   The Fund may not purchase or sell real estate,  which term does not include
     securities  of  companies  which  deal  in  real  estate  or  mortgages  or
     investments  secured by real estate or interests  therein,  except that the
     Fund reserves freedom of action to hold and to sell real estate acquired as
     a result of the Fund's ownership of securities.

6.   The Fund may not purchase or sell  commodities,  except as permitted by the
     1940 Act,  as amended,  and as  interpreted  or modified by the  regulatory
     authority having jurisdiction, from time to time.

7.   The Fund may not make  loans  except as  permitted  under the 1940 Act,  as
     amended,  and as  interpreted  or modified by regulatory  authority  having
     jurisdiction, from time to time.

The following investment restriction may be changed by a vote of the majority of
the Board of Directors.

The Fund will not invest in shares of any other investment company registered
under the 1940 Act, except as permitted by federal law.

As a matter of non-fundamental policy, the Fund currently does not intend to
lend portfolio securities in an amount greater than 33?% of its total assets.

Unless otherwise noted, the percentage limitations contained in these
restrictions apply at the time of purchase of securities.

                       INVESTMENT POLICIES AND TECHNIQUES

Investment Techniques

Descriptions in this Statement of Additional Information of a particular
investment practice or technique in which the Fund may engage are meant to
describe the spectrum of investments that Deutsche Investment Management
Americas Inc. (the "Advisor") in its discretion might, but is not required to,
use in managing the Fund's portfolio assets. 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 Fund, but, to the extent employed, could from time
to time have a material impact on the Fund's performance.

The Fund may invest up to 5% of its net assets in covered call options as
described below, and an additional 25% of its total assets in the aggregate in
equity and debt securities issued by foreign governments or corporations and not
traded in the United States.

The Underlying DWS Fund

Fund managers will allocate at least 25% of the Fund's assets in fixed-income
securities primarily through investing in the Underlying DWS Fund.

Risk Factors of the Underlying DWS Fund

In pursuing its investment objectives, the Underlying DWS Fund is permitted
investment strategies in a wide range of investment techniques. The Underlying
DWS Fund's 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 Fund is contained in the prospectuses of such fund. Because
the Fund invests in the Underlying DWS Fund, shareholders of the Fund will be
affected by the portfolio management strategies and investment policies of the
Underlying DWS Fund in direct proportion to the amount of assets the Fund
allocates to the Underlying DWS Fund.

The following is the Underlying DWS Fund in which the Fund may invest.

DWS Short Duration Plus Fund. The fund's investment objective is to provide high
income while also seeking to maintain a high degree of stability of
shareholders' capital. The fund invests in securities of varying maturities and
normally seeks to maintain an average portfolio duration of no longer than three
years. The fund invests, under normal market conditions, at least 65% of its
total assets in fixed income securities rated, at the time of purchase, within
the top four long-term rating categories by a nationally recognized statistical
rating organization (a "NRSRO") (or, if unrated, determined by us to be of
similar quality) The fund may invest up to 10% of its assets in US
dollar-denominated, domestic and foreign below investment-grade fixed income
securities (junk bonds) rated in the fifth and sixth long-term rating categories
by a NRSRO (or, if unrated, determined by us to be of similar quality),
including those whose issuers are located in countries with new or emerging
securities markets. The fund considers an emerging securities market to be one
where the sovereign debt issued by the government in local currency terms is
rated below investment-grade. A portion of high yield securities purchased for
the fund may consist of non-US dollar denominated, below investment-grade fixed
income securities. The fund can invest up to 15% of its net assets in illiquid
securities. In an attempt to enhance return, the fund also employs a global
allocation strategy, which invests in instruments across domestic and
international fixed income and currency markets.

Covered Call Options

As a means of protecting the Fund's assets against market declines, the Fund may
write covered call option contracts on certain securities which it owns or has
the immediate right to acquire, provided that the aggregate value of such
options does not exceed 5% of the value of the Fund's net assets as of the time
such options are written. If, however, the securities on which the calls have
been written appreciate, more than 5% of the Fund's assets may be subject to the
call. The Fund may also purchase call options for the purpose of terminating its
outstanding call option obligations.

When the Fund writes a call option, it gives the purchaser of the option the
right, but not the obligation, to buy the securities at the price specified in
the option (the "Exercise Price") at any time prior to the expiration of the
option. In call options written by the Fund, the Exercise Price, plus the option
premium paid by the purchaser, will almost always be greater than the market
price of the underlying security at the time a call option is written. If any
option is exercised, the Fund will realize the gain or loss from the sale of the
underlying security and the proceeds of the sale will be increased by the net
premium originally received. By writing a covered option, the Fund may forgo, in
exchange for the net premium, the opportunity to profit from an increase in
value of the underlying security above the Exercise Price. Thus, options may be
written when the Advisors believe the security should be held for the long-term
but expect no appreciation or only moderate appreciation within the option
period. The Fund also may write covered options on securities that have a
current value above the original purchase price but which, if then sold, would
not normally qualify for long-term capital gains treatment. Such activities will
normally take place during periods when market volatility is expected to be
high.

Only call options which are traded on a national securities exchange will be
written. Currently, call options may be traded on the Chicago Board Options
Exchange and the American, Pacific, Philadelphia and New York Stock Exchanges.
Call options are issued by The Options Clearing Corporation ("OCC"), which also
serves as the clearing house for transactions with respect to options. The price
of a call option is paid to the writer without refund on expiration or exercise,
and no portion of the price is retained by OCC or the exchanges listed above.
Writers and purchasers of options pay the transaction costs, which may include
commissions charged or incurred in connection with such option transactions.

Call options may be purchased by the Fund, but only to terminate an obligation
as a writer of a call option. This is accomplished by making a closing purchase
transaction, that is, the purchase of a call option on the same security with
the same Exercise Price and expiration date as specified in the call option
which had been written previously. A closing purchase transaction with respect
to calls traded on a national securities exchange has the effect of
extinguishing the obligation of a writer. Although the cost to the Fund of such
a transaction may be greater than the net premium received by the Fund upon
writing the original option, the Directors believe that it is appropriate for
the Fund to have the ability to make closing purchase transactions in order to
prevent its portfolio securities from being purchased pursuant to the exercise
of a call. The Advisors may also permit the call option to be exercised. A
profit or loss from a closing purchase transaction or exercise of a call option
will be realized depending on whether the amount paid to purchase a call to
close a position, or the price at which the option is exercised, is less or more
than the amount received from writing the call. In the event that the Advisors
are incorrect in their forecasts regarding market values, interest rates and
other applicable factors, the Fund may not realize a profit and may suffer
losses from writing the calls.

Positions in options on stocks may be closed before expiration only by a closing
transaction, which may be made only on an exchange which provides a liquid
secondary market for such options. Although the Fund will write options only
when the Advisors believe a liquid secondary market will exist on an exchange
for options of the same series, there can be no assurance that a liquid
secondary market will exist for any particular stock option. Possible reasons
for the absence of a liquid secondary market include the following: (a)
insufficient trading interest in certain options; (b) restrictions on
transactions imposed by an exchange; (c) trading halts, suspensions or other
restrictions imposed with respect to particular classes or series of options or
underlying securities; (d) inadequacy of the facilities of an exchange or OCC to
handle trading volume; or (e) a decision by one or more exchanges to discontinue
the trading of options or to impose restrictions on types of orders. Although
OCC has stated that it believes (based on forecasts provided by the exchanges on
which options are traded) that its facilities are adequate to handle the volume
of reasonably anticipated options transactions, and although each exchange has
advised OCC that it believes that its facilities will also be adequate to handle
reasonably anticipated volume, there can be no assurance that higher than
anticipated trading activity or order flow or other unforeseen events might not
at times render certain of these facilities inadequate and thereby result in the
institution of special trading procedures or restrictions.

Certain provisions of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), will restrict the use of covered call options. (See
"Federal Tax Treatment of Dividends and Distributions" below.)

Equity Securities

Equity securities include common stocks and convertible preferred stocks,
warrants, and other securities that may be converted into or exchanged for
common stocks. Common stocks are equity securities that represent an ownership
interest in a corporation, entitling the shareholder to voting rights and
receipt of dividends based on proportionate ownership. Preferred stock is a
class of capital stock that pays dividends at a specified rate and that has
preference over common stock in the payment of dividends and the liquidation of
assets. Warrants are instruments giving holders the right, but not the
obligation, to buy shares of a company at a given price during a specified
period. Convertible securities are securities that may be converted either at a
stated price or rate within a specified period of time into a specified number
of shares of common stock.

Warrants

The Fund may invest in warrants. Warrants are securities that give the holder
the right but not the obligation to buy a specified number of shares of common
stock at a specified price, which is often higher than the market price at the
time of issuance, for a specified period (or in perpetuity). Warrants may be
issued in units with other securities or separately, and may be freely
transferable and traded on exchanges. Investing in warrants can provide a
greater potential for profit or loss than an equivalent investment in the
underlying security, and, thus is a speculative investment. At the time of
issue, the cost of a warrant is substantially less than the cost of the
underlying security itself, and price movements in the underlying security are
generally magnified in the price movements of the warrant. This leveraging
effect enables the investor to gain exposure to the underlying security with a
relatively low capital investment. This leveraging increases an investor's risk,
however, in the event of a decline in the value of the underlying security and
can result in a complete loss of the amount invested in the warrant.

While the market value of a warrant tends to be more volatile than that of the
securities underlying the warrant, changes in the market value of a warrant may
not necessarily correlate with that of the underlying security. A warrant ceases
to have value if it is not exercised prior to the expiration date, if any, to
which the warrant is subject.

The purchase of warrants involves a risk that the Fund could lose the purchase
value of a warrant if the right to subscribe to additional shares is not
exercised prior to the warrant's expiration. Also, the purchase of warrants
involves the risk that the effective price paid for the warrant added to the
subscription price of the related security may exceed the value of the
subscribed security's market price such as when there is no movement in the
level of the underlying security. The value of a warrant may decline because of
a decline in the value of the underlying security, the passage of time, changes
in interest rates or in the dividend or other policies of the company whose
equity underlies the warrant or a change in the perception as to the future
price of the underlying security, or any combination thereof. Also, warrants do
not entitle the holder to dividends or voting rights with respect to the
underlying securities and do not represent any rights in the assets of the
issuing company.

Convertible Securities

The Fund may invest in convertible securities. In general, the market value of a
convertible security is at least the higher of its "investment value" (i.e., its
value as a fixed-income security) or its "conversion value" (i.e., the value of
the underlying shares of common stock if the security is converted). A
convertible security tends to increase in market value when interest rates
decline and tends to decrease in value when interest rates rise. However, the
price of a convertible security also is influenced by the market value of the
security's underlying common stock. Thus, the price of a convertible security
tends to increase as the market value of the underlying common stock increases,
whereas it tends to decrease as the market value of the underlying stock
declines. Investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.

Below Investment Grade Securities

The Fund may purchase non-convertible corporate bonds that carry ratings lower
than those assigned to investment grade bonds by S&P or Moody's, or that are
unrated by S&P or Moody's if such bonds, in the Advisors' judgment, are
determined to be of comparable the quality under criteria approved by the Board
of Directors. These bonds generally are known as "junk bonds." These securities
may trade at substantial discounts from their face values. Accordingly, if the
Fund is successful in meeting its objective, investors may receive a total
return consisting not only of income dividends but, to a lesser extent, capital
gains. Appendix A to this Statement of Additional Information sets forth a
description of the S&P and Moody's rating categories, which indicate the rating
agency's opinion as to the probability of timely payment of interest and
principal. These ratings range in descending order of quality from AAA to D, in
the case of S&P, and from Aaa to C, in the case of Moody's. Generally,
securities that are rated lower than BBB by S&P or Baa by Moody's are described
as below investment grade. Securities rated below investment grade may be of a
predominantly speculative character and their future cannot be considered
well-assured. The issuer's ability to make timely payments of principal and
interest may be subject to material contingencies. Securities in the lowest
rating categories may be unable to make timely interest or principal payments
and may be in default or in arrears in interest and principal payments.

Ratings of S&P and Moody's represent their opinions of the quality of bonds and
other debt securities they undertake to rate at the time of issuance. However,
these ratings are not absolute standards of quality and may not reflect changes
in an issuer's creditworthiness. Accordingly, the Advisors do not rely
exclusively on ratings issued by S&P or Moody's in selecting portfolio
securities, but supplement such ratings with independent and ongoing review of
credit quality. In addition, the total return the Fund may earn from investments
in below investment grade securities will be significantly affected not only by
credit quality but by fluctuations in the markets in which such securities are
traded. Accordingly, selection and supervision by the Advisors of investments in
below investment grade securities involves continuous analysis of individual
issuers, general business conditions, activities in the high-yield bond market
and other factors. The analysis of issuers may include, among other things,
historic and current financial conditions, strength of management,
responsiveness to business conditions, credit standing and current and
anticipated results of operations. Analysis of general business conditions and
other factors may include anticipated changes in economic activity in interest
rates, the availability of new investment opportunities and the economic outlook
for specific industries.

Investing in below investment grade securities entails substantially greater
risk than investing in investment grade bonds, including not only credit risk,
but potentially greater market volatility and lower liquidity. Yields and market
values of below investment grade securities will fluctuate over time, reflecting
not only changing interest rates but also the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, below investment grade securities may decline in value due to
heightened concern over credit quality, regardless of prevailing interest rates.
In adverse economic conditions, the liquidity of the secondary market for below
investment grade securities may be significantly reduced. In addition, adverse
economic developments could disrupt the high-yield market, affecting both price
and liquidity, and could also affect the ability of issuers to repay principal
and interest, thereby leading to a default rate higher than has been the case
historically. Even under normal conditions, the market for lower rated bonds may
be less liquid than the market for investment grade corporate bonds. In periods
of reduced market liquidity, the market for lower rated bonds may become more
volatile and there may be significant disparities in the prices quoted for
high-yield securities by various dealers. Under conditions of increased
volatility and reduced liquidity, it may become more difficult for the Fund to
value its portfolio securities accurately because there might be less reliable,
objective data available. Finally, prices for high-yield bonds may be affected
by legislative and regulatory developments. For example, from time to time,
Congress has considered legislation to restrict or eliminate the corporate tax
deduction for interest payments or to regulate corporate restructurings such as
takeovers, mergers or leveraged buyouts. Such legislation may significantly
depress the prices of outstanding high-yield bonds.

Corporate Bonds

Investments in corporate bonds involve 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 bonds 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.

Bank Loans

The Fund may also invest in bank loans, which 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 the 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, the 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, the 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 the 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, 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

Borrowing by the Fund will involve special risk considerations. To the extent
the fund borrows money, positive or negative performance by the fund's
investments may be magnified. Any gain in the value of securities purchased with
borrowed money, or income earned on such securities that exceeds the interest
paid on the amount borrowed would cause the net asset value of the Fund's shares
to increase more rapidly than otherwise would be the case. Conversely, any
decline in the value of securities purchased, or cost in excess of income
earned, would cause the net asset value of the fund's shares to decrease more
rapidly than otherwise would be the case. Borrowed money thus creates an
opportunity for greater capital gain but at the same time increases exposure to
capital risk. Money borrowed will be subject to interest costs which may or may
not be recovered by appreciation of the securities purchased or from income
received as a holder of those securities. The Fund also may be required to
maintain minimum average balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.

Other Investments

For temporary, defensive purposes the Fund may invest up to 100% of its assets
in high quality short-term money market instruments, and in notes or bonds
issued by the U.S. Treasury or by other agencies of the U.S. Government.

Short-Term Instruments

When the Fund experiences large cash inflows, for example, through the sale of
securities or of its shares and attractive investments are unavailable in
sufficient quantities, the Fund may hold short-term investments (or shares of a
money market mutual fund) for a limited time pending availability of such
investments. In addition, when in the Advisor's opinion, it is advisable to
adopt a temporary defensive position because of unusual and adverse market or
other conditions, up to 100% of the Fund's assets may be invested in such
short-term instruments.

Short-term instruments consist of foreign and domestic: (1) short-term
obligations of sovereign governments, their agencies, instrumentalities,
authorities or political subdivisions; (2) other investment grade short-term
debt securities; (3) commercial paper; (4) bank obligations, including
negotiable certificates of deposit, time deposits and banker's acceptances; and
(5) repurchase agreements. At the time the Fund invests in commercial paper,
bank obligations or repurchase agreements, the issuer or the issuer's parent
must have outstanding debt, commercial paper or bank obligations rated
investment grade; or, if no such ratings are available, the instrument must be
deemed to be of comparable quality in the opinion of the Advisor. These
instruments may be denominated in US dollars or in foreign currencies.

Obligations of Banks and Other Financial Institutions

The Fund may invest in US dollar-denominated fixed rate or variable rate
obligations of US or foreign financial institutions, including banks, only when
the Advisor determines that the credit risk with respect to the instrument is
minimal. Obligations of domestic and foreign financial institutions in which the
Fund may invest include (but are not limited to) certificates of deposit,
bankers' acceptances, bank time deposits, commercial paper, and other
instruments issued or supported by the credit of US or foreign financial
institutions, including banks.

For purposes of the Fund's investment policies with respect to bank obligations,
the assets of a bank will be deemed to include the assets of its domestic and
foreign branches. Obligations of foreign branches of US banks and foreign banks
may be general obligations of the parent bank in addition to the issuing bank or
may be limited by the terms of a specific obligation and by government
regulation. If the Advisor deems the instruments to present minimal credit risk,
the Fund may invest in obligations of foreign banks or foreign branches of US
banks, which include banks located in the United Kingdom, Grand Cayman Island,
Nassau, Japan and Canada.

Investments in these obligations may entail risks that are different from those
of investments in obligations of US domestic banks because of differences in
political, regulatory and economic systems and conditions. These risks include
future political and economic developments, currency blockage, the possible
imposition of withholding taxes on interest payments, possible seizure or
nationalization of foreign deposits, difficulty or inability of pursuing legal
remedies and obtaining judgments in foreign courts, possible establishment of
exchange controls or the adoption of other foreign governmental restrictions
that might affect adversely the payment of principal and interest on bank
obligations. Foreign branches of US banks and foreign banks may also be subject
to less stringent reserve requirements and to different accounting, auditing,
reporting and record keeping standards that those applicable to domestic
branches of US banks.

Certificates of Deposit and Bankers' Acceptances

The Fund may invest in 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 Fund 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.

Commercial Paper

The Fund may invest in commercial paper. The Fund may invest in fixed rate or
variable rate commercial paper, issued by US or foreign entities. Commercial
paper consists of short-term (usually up to one year) unsecured promissory notes
issued by US or foreign corporations in order to finance their current
operations. Any commercial paper issued by a foreign entity corporation and
purchased by the Fund must be US dollar-denominated and must not be subject to
foreign withholding tax at the time of purchase.

Commercial paper when purchased by the Fund must be rated in the highest
short-term rating category by any two Nationally Recognized Statistical Rating
Organizations ("NRSROs") (or one NRSRO if that NRSRO is the only such NRSRO
which rates such security) or, if not so rated, must be determined by the
Advisor to be of comparable quality. Investing in foreign commercial paper
generally involves risks similar to those described above relating to
obligations of foreign banks or foreign branches and subsidiaries of US and
foreign banks.

For a description of commercial paper ratings, see Appendix A to this SAI.

Depositary Receipts. The 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, EDRs, 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 and 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 the Fund's investment policies, the 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, the 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.

Eurodollar Instruments. The 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. The 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 usually will
involve currencies of foreign countries, and because the Fund may hold foreign
currencies and forward contracts, futures contracts and options on foreign
currencies and foreign currency futures contracts, the value of the assets of
the Fund as measured in US dollars may be affected favorably or unfavorably by
changes in foreign currency exchange rates and exchange control regulations, and
the Fund may incur costs and experience conversion difficulties and
uncertainties in connection with conversions between various currencies.
Fluctuations in exchange rates may also affect the earning power and asset value
of the foreign entity issuing the security.

The strength or weakness of the US dollar against these currencies is
responsible for part of the 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 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 the 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 the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
resell that currency to the dealer. The 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
options or forward or futures contracts to purchase or sell foreign currencies.

Foreign Fixed Income Securities. Since most foreign fixed income securities are
not rated, the 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 the Fund's goals may depend more upon the abilities of the
Advisor than would otherwise be the case.

The value of the foreign fixed income securities held by the Fund, and thus the
net asset value of the 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 the 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 the Fund's
investments in foreign fixed income securities, and the extent to which the 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 (Brady Bonds are debt
securities issued under a plan implemented to allow debtor nations to
restructure their outstanding commercial bank indebtedness), involve special
risks. 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 the 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 the Fund.

Sovereign debt of emerging market governmental issuers is to be considered
speculative. 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. There is a history of defaults with
respect to commercial bank loans by public and private entities issuing
sovereign debt. All or a portion of the interest payments and/or principal
repayment with respect to sovereign debt may be uncollateralized. Obligations
arising from past restructuring agreements may affect the economic performance
and political and social stability of those issuers.

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.

Foreign Investment. Foreign securities are normally denominated and traded in
foreign currencies. As a result, the value of the 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. (See "Foreign Currencies"
above.) 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 the 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 the 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 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 the Fund's securities in such markets may
not be readily available. The Fund may suspend redemption of its shares for any
period during which an emergency exists, as determined by the SEC. Accordingly
if the 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 the Fund's identification of such condition until the
date of the SEC action, the Fund's securities in the affected markets will be
valued at fair value determined in good faith by or under the direction of the
Fund's Board.

Certain of the foregoing risks may also apply to some extent to securities of US
issuers that are denominated in foreign currencies or that are traded in foreign
markets, or securities of US issuers having significant foreign operations.

Impact of Large Redemptions and Purchases of Fund Shares. From time to time,
shareholders of the Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in the Fund) may make relatively
large redemptions or purchases of Fund shares. These transactions may cause the
Fund to have to sell securities or invest additional cash, as the case may be.
While it is impossible to predict the overall impact of these transactions over
time, there could be adverse effects on the Fund's performance to the extent
that the Fund may be required to sell securities or invest cash at times when it
would not otherwise do so. These transactions could also accelerate the
realization of taxable income if sales of securities resulted in capital gains
or other income and could also increase transaction costs, which may impact the
Fund's expense ratio.

Lending of Portfolio Securities. The 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, the 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 the Fund. The 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 the 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 the Fund at any time, and
(d) the Fund receives reasonable interest on the loan (which may include the
Fund investing any cash collateral in interest bearing short-term investments),
and distributions on the loaned securities and any increase in their market
value. 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 the Fund's delegate
after a commercially reasonable review of relevant facts and circumstances,
including the creditworthiness of the borrower.

The 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 the Fund may be invested in a
money market fund managed by the Advisor (or one of its affiliates).

Strategic Transactions and Derivatives. The 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 the 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, the 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, 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 the Fund's
portfolio resulting from securities markets or currency exchange rate
fluctuations, to protect the 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 the 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 although no more than 5% of the Fund's
assets will be committed to certain Strategic Transactions entered into for
non-hedging purposes. 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 the Fund to utilize these Strategic Transactions successfully will
depend on the Advisor's ability to predict pertinent market movements, which
cannot be assured. The 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 the Fund, and the 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 the 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 the 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 the Fund can realize on its investments or
cause the Fund to hold a security it might otherwise sell. The use of currency
transactions can result in the 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 the
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the 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,
the 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 Fund assets in special accounts, as described
below under "Use of Segregated and Other Special Accounts."

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, the 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 the 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. The Fund's purchase of a call option on a security, financial future,
index, currency or other instrument might be intended to protect the 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. The 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.

The 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 cannot 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. The
Fund will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula price within seven days. The
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 the Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, the 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. The 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 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 the Fund, and
portfolio securities "covering" the amount of the Fund's obligation pursuant to
an OTC option sold by it (the cost of the sell-back plus the in-the-money
amount, if any) are illiquid, and are subject to the Fund's limitation on
investing no more than 15% of its net assets in illiquid securities.

If the 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 the Fund's income. The sale of put options can also provide income.

The Fund may purchase and sell call options on securities including US Treasury
and agency securities, mortgage-backed securities, foreign sovereign debt,
corporate debt securities, equity securities (including convertible securities)
and 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. All calls sold by the fund must be "covered"
(i.e., the 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 the Fund will receive the option premium to
help protect it against loss, a call sold by the Fund exposes the 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 the
Fund to hold a security or instrument which it might otherwise have sold.

The Fund may purchase and sell put options on securities including US Treasury
and agency securities, mortgage-backed securities, foreign sovereign debt,
corporate debt securities, equity securities (including convertible securities)
and 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. The
Fund will not sell put options if, as a result, more than 50% of the 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 the Fund may be
required to buy the underlying security at a disadvantageous price above the
market price.

General Characteristics of Futures. The Fund may enter into futures contracts or
purchase or sell put and call options on such futures as a hedge 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 the 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.

The Fund has claimed exclusion from the definition of the term "commodity pool
operator" under the regulations of the Commodity Futures Trading Commission.
Therefore, the Funds are not subject to commodity pool operator registration and
regulation under the Commodity Exchange Act. Futures and options on futures may
be entered into for bona fide hedging, risk management (including duration
management) or other portfolio and return enhancement management purposes to the
extent consistent with the exclusion from commodity pool operator registration.
Typically, maintaining a futures contract or selling an option thereon requires
the Fund to deposit with a financial intermediary 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 marked 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 the Fund. If the 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.

Options on Securities Indices and Other Financial Indices. The 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 they 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. The 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. The 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 Advisor.

The 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 the 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.

The 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.

The 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 the fund has or in which the Funds expect
to have portfolio exposure.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the 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 the Fund's portfolio securities are or are
expected to be denominated, in exchange for US dollars. Currency hedging
involves some of the same risks and considerations as other transactions with
similar instruments. Currency transactions can result in losses to the 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 the Fund is engaging in proxy hedging. If the 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 the 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 the 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 the
Fund may enter are interest rate, currency, index and other swaps and the
purchase or sale of related caps, floors and collars. The 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 the fund anticipates purchasing at a later
date. The Fund will not sell interest rate caps or floors where it does not own
securities or other instruments providing the income stream the fund may be
obligated to pay. Interest rate swaps involve the exchange by the 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.

Combined Transactions. The 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 the 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.

Use of Segregated and Other Special Accounts. Many Strategic Transactions, in
addition to other requirements, require that the Fund segregate cash or liquid
assets with its custodian to the extent fund obligations are not otherwise
"covered" through ownership of the underlying security, financial instrument or
currency. In general, either the full amount of any obligation by a fund to pay
or deliver securities or assets must be covered at all times by the securities,
instruments or currency required to be delivered, or, subject to any regulatory
restrictions, an amount of cash or liquid assets at least equal to the current
amount of the obligation must be segregated with the custodian. The segregated
assets cannot be sold or transferred unless equivalent assets are substituted in
their place or it is no longer necessary to segregate them. For example, a call
option written by the Fund will require the Fund to hold the securities subject
to the call (or securities convertible into the needed securities without
additional consideration) or to segregate cash or liquid assets sufficient to
purchase and deliver the securities if the call is exercised. A call option sold
by the fund on an index will require the Fund to own portfolio securities which
correlate with the index or to segregate cash or liquid assets equal to the
excess of the index value over the exercise price on a current basis. A put
option written by the Fund requires the Fund to segregate cash or liquid assets
equal to the exercise price.

Except when the Fund enters into a forward contract for the purchase or sale of
a security denominated in a particular currency, which requires no segregation,
a currency contract which obligates the Fund to buy or sell currency will
generally require the Fund to hold an amount of that currency or liquid assets
denominated in that currency equal to the Fund's obligations or to segregate
cash or liquid assets equal to the amount of the Fund's obligation.

OTC options entered into by the Fund, including those on securities, currency,
financial instruments or indices and OCC issued and exchange listed index
options, will generally provide for cash settlement. As a result, when the Fund
sells these instruments it will only segregate an amount of cash or liquid
assets equal to its accrued net obligations, as there is no requirement for
payment or delivery of amounts in excess of the net amount. These amounts will
equal 100% of the exercise price in the case of a non cash-settled put, the same
as an OCC guaranteed listed option sold by the Fund, or the in-the-money amount
plus any sell-back formula amount in the case of a cash-settled put or call. In
addition, when the Fund sells a call option on an index at a time when the
in-the-money amount exceeds the exercise price, the Fund will segregate, until
the option expires or is closed out, cash or cash equivalents equal in value to
such excess. OCC issued and exchange listed options sold by the Fund other than
those above generally settle with physical delivery, or with an election of
either physical delivery or cash settlement and the Fund will segregate an
amount of cash or liquid assets equal to the full value of the option. OTC
options settling with physical delivery, or with an election of either physical
delivery or cash settlement will be treated the same as other options settling
with physical delivery.

In the case of a futures contract or an option thereon, the Fund must deposit
initial margin and possible daily variation margin in addition to segregating
cash or liquid assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount owed at the expiration of an
index-based futures contract. Such liquid assets may consist of cash, cash
equivalents, liquid debt or equity securities or other acceptable assets.

With respect to swaps, the Fund will accrue the net amount of the excess, if
any, of its obligations over its entitlements with respect to each swap on a
daily basis and will segregate an amount of cash or liquid assets having a value
equal to the accrued excess. Caps, floors and collars require segregation of
assets with a value equal to the Fund's net obligation, if any.

Strategic Transactions may be covered by other means when consistent with
applicable regulatory policies. The Fund may also enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Strategic
Transactions. For example, the Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating cash or liquid assets if the
Fund held a futures or forward contract, it could purchase a put option on the
same futures or forward contract with a strike price as high or higher than the
price of the contract held. Other Strategic Transactions may also be offset in
combinations. If the offsetting transaction terminates at the time of or after
the primary transaction no segregation is required, but if it terminates prior
to such time, cash or liquid assets equal to any remaining obligation would need
to be segregated.

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.

US Government Securities

The Fund may invest in obligations issued or guaranteed by the US government
which include: (1) direct obligations of the US Treasury and (2) obligations
issued by US government agencies and instrumentalities. Included among direct
obligations of the US are Treasury Bills, Treasury Notes and Treasury Bonds,
which differ in terms of their interest rates, maturities and dates of issuance.
Treasury Bills have maturities of less than one year, Treasury Notes have
maturities of one to 10 years and Treasury Bonds generally have maturities of
greater than 10 years at the date of issuance. Included among the obligations
issued by agencies and instrumentalities of the US are: instruments that are
supported by the full faith and credit of the US (such as certificates issued by
the Government National Mortgage Association ("GNMA" or "Ginnie Mae"));
instruments that are supported by the right of the issuer to borrow from the US
Treasury (such as securities of Federal Home Loan Banks); and instruments that
are supported by the credit of the instrumentality (such as Federal National
Mortgage Association ("FNMA" or "Fannie Mae") and Federal Home Loan Mortgage
Corporation ("FHLMC" or "Freddie Mac")).

Other US government securities the Fund may invest in include (but are not
limited to) securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Loan Administration, Export-Import Bank of the US,
Small Business Administration, General Services Administration, Central Bank for
Cooperatives, Federal Farm Credit Banks, Federal Intermediate Credit Banks,
Federal Land Banks, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board and Student Loan Marketing Association.
Because the US government is not obligated by law to provide support to an
instrumentality it sponsors, the Fund will invest in obligations issued by such
an instrumentality only if the Advisor determines that the credit risk with
respect to the instrumentality does not make its securities unsuitable for
investment by the Fund.

The Fund may also invest in separately traded principal and interest component
of securities guaranteed or issued by the US government or its agencies,
instrumentalities or sponsored enterprises if such components trade
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS") or any similar program sponsored by the US
government. STRIPS are sold as zero coupon securities. See "Zero Coupon
Securities."

Zero Coupon Securities and Deferred Interest Bonds

The Fund may invest in zero coupon securities and deferred interest bonds. Zero
coupon and deferred interest bonds are debt obligations which are issued at a
significant discount from face value. The original discount approximates the
total amount of interest the bonds will accrue and compound over the period
until maturity or the first interest accrual date at a rate of interest
reflecting the market rate of the security at the time of issuance. Zero coupon
securities are redeemed at face value at their maturity date without interim
cash payments of interest or principal. The amount of this discount is accrued
over the life of the security, and the accrual constitutes the income earned on
the security for both accounting and tax purposes. Because of these features,
the market prices of zero coupon securities are generally more volatile than the
market prices of securities that have similar maturity but that pay interest
periodically.

While zero coupon bonds do not require the periodic payment of interest,
deferred interest bonds generally provide for a period of delay before the
regular payment of interest begins. Although this period of delay is different
for each deferred interest bond, a typical period is approximately one-third of
the bond's term to maturity. Such investments benefit the issuer by mitigating
its initial need for cash to meet debt service, but some also provide a higher
rate of return to attract investors who are willing to defer receipt of such
cash.

The Fund will accrue income on such investments for tax and accounting purposes,
as required, which is distributable to shareholders and which, because no cash
is generally received at the time of accrual, may require the liquidation of
other portfolio securities to satisfy the Fund's distribution obligations. See
"Taxes."

Lower-Rated Debt Securities ("Junk Bonds" or "High Yield Debt Securities")

The Fund may invest in debt securities rated in the fifth and sixth long-term
rating categories by S&P, Moody's and Duff & Phelps Credit Rating Company, or
comparably rated by another NRSRO, or if not rated by an NRSRO, of comparable
quality as determined by the Advisor in its sole discretion.

These securities, often referred to as Junk Bonds or High Yield Debt Securities,
are considered speculative and, while generally offering greater income than
investments in higher quality securities, involve greater risk of loss of
principal and income, including the possibility of default or bankruptcy of the
issuers of such securities, and have greater price volatility, especially during
periods of economic uncertainty or change. These lower quality bonds tend to be
affected by economic changes and short-term corporate and industry developments,
as well as public perception of those changes and developments, to a greater
extent than higher quality securities, which react primarily to fluctuations in
the general level of interest rates.

In addition, the market for lower-rated debt securities may be thinner and less
active than that for higher rated debt securities, which can adversely affect
the prices at which the former are sold. If market quotations are not available,
lower-rated debt securities will be valued in accordance with procedures
established by the Board of Directors, including the use of outside pricing
services. Judgment plays a greater role in valuing high-yield corporate debt
securities than is the case for securities for which more external sources for
quotations and last sale information are available. Adverse publicity and
changing investor perception may also affect the availability of outside pricing
services to value lower-rated debt securities and the Fund's ability to dispose
of these securities. In addition, such securities generally present a higher
degree of credit risk. Issuers of lower-rated debt securities are often highly
leveraged and may not have more traditional methods of financing available to
them so that their ability to service their obligations during an economic
downturn or during sustained periods of rising interest rates may be impaired.
The risk of loss due to default by such issuers is significantly greater because
below investment grade securities generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness.

Since the risk of default is higher for lower-rated debt securities, the
Advisor's research and credit analysis are an especially important part of
managing securities of this type held by the Fund. In considering investments
for the Fund, the Advisor will attempt to identify those issuers of high
yielding debt securities whose financial conditions are adequate to meet future
obligations, have improved or are expected to improve in the future. The
Advisor's analysis focuses on relative values based on such factors as interest
on dividend coverage, asset coverage, earnings prospects and the experience and
managerial strength of the issuer.

While the market for high yield corporate debt securities has been in existence
for many years and has weathered previous economic downturns, past experience
may not provide an accurate indication of future performance of the high yield
bond market, especially during periods of economic recession.

The Fund may choose, at its expense or in conjunction with others, to pursue
litigation or otherwise exercise its rights as a security holder to seek to
protect the interest of security holders if it determines this to be in the
interest of the Fund.

Other Debt Obligations

The Fund may invest in deposits, bonds, notes and debentures and other debt
obligations that at the time of purchase have, or are comparable in priority and
security to other securities of such issuer which have, outstanding short-term
obligations meeting the above short-term rating requirements, or if there are no
such short-term ratings, are determined by the Advisor to be of comparable
quality.

Impact of Sub-Prime Mortgage Market. The Fund may invest in mortgage-backed,
asset-backed and other fixed-income securities whose value and liquidity may be
adversely affected by the critical downturn in the sub-prime mortgage lending
market in the US. Sub-prime loans, which have higher interest rates, are made to
borrowers with low credit ratings or other factors that increase the risk of
default. Concerns about widespread defaults on sub-prime loans have also created
heightened volatility and turmoil in the general credit markets. As a result,
the Fund's investments in certain fixed-income securities may decline in value,
their market value may be more difficult to determine, and the Fund may have
more difficulty disposing of them.

Repurchase Agreements

The Fund may enter into repurchase agreements with domestic banks or
broker-dealers deemed to be creditworthy by the Advisors. A repurchase agreement
is a short-term investment in which the Fund acquires ownership of a debt
security and the seller agrees to repurchase the obligation at a future time and
set price, usually not more than seven days from the date of purchase, thereby
determining the yield during the purchaser's holding period. The value of
underlying securities will be at least equal at all times to the total amount of
the repurchase obligation, including the interest factor. The Fund makes payment
for such securities only upon physical delivery or evidence of book entry
transfer to the account of a custodian or bank acting as agent. The Fund does
not bear the risk of a decline in value of the underlying securities unless the
seller defaults under its repurchase obligation. In the event of a bankruptcy or
other default of a seller of a repurchase agreement, the Fund could experience
both delays in liquidating the underlying securities and loss including (a)
possible decline in the value of the underlying security while the Fund seeks to
enforce its rights thereto, (b) possible sub-normal levels of income and lack of
access to income during this period and (c) expenses of enforcing its rights.

Foreign Investment Risk Considerations

From time to time, the Advisors may invest the Fund's assets in American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global
Depositary Receipts ("GDRs") and International Depository Receipts ("IDRs") or
other similar securities representing ownership of securities of non-US issuers
held in trust by a bank or similar financial institution. ADRs are receipts
typically issued by a US bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. EDRs and IDRs are
receipts issued in Europe typically by non-US banking and trust companies that
evidence ownership of either foreign or US securities. GDRs are receipts issued
by either a US or non-US banking institution evidencing ownership of the
underlying non-US securities. Generally, ADRs, in registered form, are designed
for use in US securities markets and EDRs, GDRs and IDRs, in bearer form, are
designed for use in European and international securities markets. An ADR, EDR,
GDR or IDR may be denominated in a currency different from the currency in which
the underlying foreign security is denominated. ADRs, EDRs, GDRs and IDRs are
alternatives to the purchase of the underlying securities in their national
markets and currencies, but are subject to the same risks as the non-US
securities to which they relate.

The Advisors may also invest up to 10% of the Fund's assets in debt and equity
securities issued by foreign corporate and government issuers that are not
traded in the United States when the Advisors believe that such investments
provide good opportunities for achieving income and capital gains. Foreign
investments involve substantial and different risks which should be carefully
considered by any potential investor. Such investments are usually not
denominated in US dollars so changes in the value of the US dollar relative to
other currencies will affect the value of foreign investments. In general, less
information is publicly available about foreign companies than is available
about companies in the United States. Most foreign companies are not subject to
uniform audit and financial reporting standards, practices and requirements
comparable to those in the United States. In most foreign markets volume and
liquidity are less than in the United States and, at times, volatility of price
can be greater than in the United States. Fixed commissions on foreign stock
exchanges are generally higher than the negotiated commissions on United States
exchanges. There is generally less government supervision and regulation of
foreign stock exchanges, brokers, and companies than in the United States. The
settlement periods for foreign securities, which are often longer than those for
securities of U.S. issuers, may affect portfolio liquidity. Portfolio securities
held by the Fund that are listed on foreign exchanges may be traded on days that
the Fund does not value its securities, such as Saturdays and the customary
United States business holidays on which the New York Stock Exchange is closed.
As a result, the net asset value of Shares may be significantly affected on days
when shareholders do not have access to the Fund.

Although the Fund intends to invest in securities of companies and governments
of developed, stable nations, there is also the possibility of adverse changes
in investment or exchange control regulations, expropriation or confiscatory
taxation, limitations on the removal of funds or other assets, political or
social instability, or diplomatic developments which could adversely affect
investments, assets or securities transactions of the Fund in some foreign
countries. The dividends and interest payable on certain of the Fund's foreign
portfolio securities may be subject to foreign withholding taxes, thus reducing
the net amount available for distribution to the Fund's shareholders.

Illiquid Securities

The Fund may invest up to 10% of its net assets in illiquid securities,
including repurchase agreements with remaining maturities in excess of seven
days, provided that no more than 5% of its total assets may be invested in
restricted securities. Not included within this limitation are securities that
are not registered under the 1933 Act, but that can be offered and sold to
qualified institutional buyers under Rule 144A under the 1933 Act, if the
securities are determined to be liquid. The Board of Directors has adopted
guidelines and delegated to the Advisors, subject to the supervision of the
Board of Directors, the daily function of determining and monitoring the
liquidity of Rule 144A securities. Rule 144A securities may become illiquid if
qualified institutional buyers are not interested in acquiring the securities.

Initial Public Offerings (IPOs)

The Fund may invest in IPOs but historically has not done so to a significant
degree. IPOs may be very volatile, rising and falling rapidly based on, among
other reasons, investor perceptions rather than economic reasons. Additionally,
IPOs may have a magnified effect on Fund performance depending on market
conditions and the Fund's size.

Investment of Uninvested Cash Balances

The 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, scheduled maturity of investments, liquidation of investment
securities to meet anticipated redemptions or dividend payments and new cash
received from investors. Uninvested Cash may be invested directly in money
market instruments or other short-term debt obligations. Pursuant to an
exemptive order issued by the SEC, the Fund may use Uninvested Cash to purchase
shares of affiliated funds, including money market funds, short-term bond funds
and Cash Management QP Trust, or one or more future entities for the which the
Advisor acts as trustee or investment advisor that operate as cash management
investment vehicles and that 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") in excess of the limitations of Section 12(d)(1) of the
1940 Act. Investment by the Fund in shares of the Central Funds will be in
accordance with the Fund's investment policies and restrictions as set forth in
its registration statement.

The Fund will invest Uninvested Cash in Central Funds only to the extent that
the Fund's aggregate investment in the Central Funds does not exceed 25% of its
total assets. Purchase and sales of shares of Central Funds are made at net
asset value.

Summary of Investment Practices

The following is a chart of the various types of securities and investment
strategies employed by the Fund. Unless otherwise indicated, the Fund is not
obligated to pursue any of the following strategies and does not represent that
these techniques are available now or will be available at any time in the
future. If the Fund's investment in a particular type of security is limited to
a certain percentage of the Fund's assets, that percentage limitation is listed
in the chart. As a matter of non-fundamental operating policy, the Fund may be
subject to additional restrictions. See the section entitled "Investment
Restrictions."

------------------------------------------------------------------------------

KEY TO TABLE:

|    Permitted without limit

o    Permitted  without  limit,  but not  expected  to be used to a  significant
     extent

X    Not permitted

Italic type (e.g. 20%) represents an investment limitation as a percentage of
net fund assets; does not indicate actual use.

Roman type (e.g. 20%) represents an investment limitation as a percentage of
total fund assets; does not indicate actual use.

------------------------------------------------------------------------------------------------------------------------
EQUITY SECURITIES.
------------------------------------------------------------------ -----------------------------------------------------
Common Stock                                                                                |
------------------------------------------------------------------ -----------------------------------------------------
Warrants                                                                                    o
------------------------------------------------------------------ -----------------------------------------------------
Convertible Securities                                                                      |
------------------------------------------------------------------ -----------------------------------------------------
Initial Public Offerings                                                                    o
------------------------------------------------------------------------------------------------------------------------
FIXED INCOME SECURITES & MONEY MARKET INSTRUMENTS
------------------------------------------------------------------ -----------------------------------------------------
Non-Convertible Preferred Stock                                                             |
------------------------------------------------------------------ -----------------------------------------------------
Short-Term Instruments                                                                      o
------------------------------------------------------------------ -----------------------------------------------------
Obligations of Banks and Other Financial Institutions                                       o
------------------------------------------------------------------ -----------------------------------------------------
Certificates of Deposit and Banker's Acceptances                                            o
------------------------------------------------------------------ -----------------------------------------------------
Commercial Paper                                                                            o
------------------------------------------------------------------ -----------------------------------------------------
US Government Securities                                                                    o
------------------------------------------------------------------ -----------------------------------------------------
Zero Coupon Securities and Deferred Interest Bonds                                          o
------------------------------------------------------------------ -----------------------------------------------------
Lower-Rated Debt Securities                                                                15%
------------------------------------------------------------------ -----------------------------------------------------
Corporate Bonds                                                                             |
------------------------------------------------------------------ -----------------------------------------------------
Non-Convertible Corporate Debt Obligations                                                  |
------------------------------------------------------------------ -----------------------------------------------------
Bank Loans (liquid)
------------------------------------------------------------------ -----------------------------------------------------
Repurchase Agreements                                                                       |
------------------------------------------------------------------ -----------------------------------------------------
Other Debt Obligations                                                                      o
------------------------------------------------------------------ -----------------------------------------------------
DERIVATIVE SECURITIES (OPTIONS)
------------------------------------------------------------------ -----------------------------------------------------
Covered Call Options                                                                        5%
------------------------------------------------------------------------------------------------------------------------
SECURITIES OF NON-US ISSUERS
------------------------------------------------------------------ -----------------------------------------------------
Foreign Securities & Depository Receipts (ADRs, EDRs, GDRs and
IDRs) 10%
------------------------------------------------------------------ -----------------------------------------------------
Foreign Corporate Debt Securities                                                          10%
------------------------------------------------------------------ -----------------------------------------------------
Foreign Government Debt Securities                                                         10%
------------------------------------------------------------------ -----------------------------------------------------
OTHER INVESTMENTS AND INVESTMENT PRACTICES
------------------------------------------------------------------ -----------------------------------------------------
Illiquid Securities                                                                        10%
------------------------------------------------------------------ -----------------------------------------------------

------------------------------------------------------------------ -----------------------------------------------------
Lending of Portfolio Securities                                                            33 1/3%
------------------------------------------------------------------ -----------------------------------------------------
Borrowing (including reverse repurchase agreements)                 10% (only for extraordinary or emergency purposes)
------------------------------------------------------------------ -----------------------------------------------------
Short Sales                                                                                 X
------------------------------------------------------------------ -----------------------------------------------------
Other Investment Companies                                                                  X
                                                                           (except as permitted by federal law)
------------------------------------------------------------------ -----------------------------------------------------
Temporary Defensive Investments                                                             |
------------------------------------------------------------------ -----------------------------------------------------
Purchase Securities on Margin                                                               X
------------------------------------------------------------------ -----------------------------------------------------

Portfolio Holdings

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

The Fund'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 Fund 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 Fund'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 Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by the Fund's Directors must
make a good faith determination in light of the facts then known that the Fund
has a legitimate business purpose for providing the information, that the
disclosure is in the best interest of the Fund, 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 Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to the
Fund's 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 Fund and
information derived therefrom, including, but not limited to, how the Fund'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 Fund's
holdings could not be derived from such information.

Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor the
Fund's Directors exercise control over such policies. In addition, separate
account clients of DeAM have access to their portfolio holdings and are not
subject to the Fund's portfolio holdings disclosure policy. The portfolio
holdings of some of the funds subadvised by DeAM and some of the separate
accounts managed by DeAM may substantially overlap with the portfolio holdings
of the Fund.

DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which Fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's policies and procedures with respect to
the disclosure of portfolio holdings information will protect the Fund from the
potential misuse of portfolio holdings information by those in possession of
that information.

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 Directors/Trustees overseeing the DWS Funds continue to be
independent of DeAM; the Chairmen of the DWS Funds' Boards of Directors/Trustees
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, 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.

For discussion of other regulatory matters see the Fund's Prospectuses.

                             MANAGEMENT OF THE FUND

Investment Advisor

Deutsche  Investment  Management  Americas Inc. ("DIMA" or the "Advisor") is the
investment  advisor for the Fund. DIMA is located at 345 Park Avenue,  New York,
NY 10154.

On March 5, 2008 the Fund's Board Members approved the termination of Alex.
Brown Investment Management ("ABIM") as the Fund's subadvisor. Effective March
15, 2008 the Advisor assumed all day-to-day responsibilities that were
previously delegated to ABIM.

On March 31, 2007, the Fund's previous Advisor, Investment Company Capital Corp.
("ICCC"), merged into DIMA. Prior to March 31, 2007, ICCC was the investment
advisor to the Fund. As a result of the merger, DIMA is now the investment
advisor.

DIMA is an indirect, wholly owned subsidiary of Deutsche Bank AG ("Deutsche
Bank"). Deutsche Bank is a banking company with limited liability organized
under the laws of the Federal Republic of Germany. Deutsche Bank is the parent
company of a group consisting of banks, capital markets companies, fund
management companies, mortgage banks, a property finance company, installments
financing and leasing companies, insurance companies, research and consultancy
companies, and other domestic and foreign companies.

Pursuant to the amended and restated investment management agreement dated July
1, 2006, as revised April 1, 2007, ("Investment Management Agreement"), the
Advisor provides continuing investment management of the assets of the Fund. In
addition to the investment management of the assets of the Fund, the Advisor
determines the investments to made for the Fund, 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 Fund's policies as stated in its
Prospectuses and SAI, or as adopted by the Fund's Board. The Advisor will also
monitor, to the extent not monitored by the Fund's administrator or other agent,
the Fund's compliance with its investment and tax guidelines and other
compliance policies.

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

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 Fund, including the
Fund's share of payroll taxes, who are affiliated persons of the Advisor.

The Investment Management Agreement provides that the Fund 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 Fund, the Fund's
custodian, or other agents of the Fund; taxes and governmental fees; fees and
expenses of the Fund'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 Fund; and litigation expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund'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 Fund's shareholders.

The Investment Management Agreement provides that the Advisor shall not be
liable for any error of judgment or mistake of law or of any loss suffered by
the Fund 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 agreement. The Investment
Management Agreement may be terminated at any time, without payment of penalty,
by either party or by a majority of the outstanding voting securities of the
Fund on 60 days' written notice.

In addition, the Fund has a subadvisor approval policy (the "Sub-advisor
Approval Policy"). The Sub-advisor Approval Policy permits the Advisor, subject
to the approval of the Board, including a majority of its independent board
members, to appoint and replace sub-advisors and to amend sub-advisory contracts
without obtaining shareholder approval. Under the Sub-advisor 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 Sub-advisor 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 Sub-advisor Approval
Policy, including any shareholder notice requirements.

As compensation for its services, the Fund pays DIMA an annual fee based on the
Fund's average daily net assets. This fee is calculated daily and paid monthly,
at the following annual rates: 0.915% of the first $50 million, 0.765% of the
next $50 million, 0.715% of the next $100 million, and 0.615% of the amount in
excess of $200 million. Prior to July 1, 2006, the Fund paid ICCC a fee that was
calculated daily and paid monthly, at the following annual rates: 1.00% of the
first $50 million, 0.85% of the next $50 million, 0.80% of the next $100
million, and 0.70% of the amount in excess of $200 million. As compensation for
its services, ABIM was entitled to receive a fee from the Advisor, payable from
its management fee based on the Fund's average daily net assets. This fee was
calculated daily and payable monthly, at the annual rate of 0.65% of the first
$50 million, 0.50% of assets in excess of $50 million but not exceeding $200
million, and 0.40% of the amount in excess of $200 million.

Advisory fees paid by the Fund to the Advisor and subadvisory fees paid by the
Advisor to ABIM for the last three fiscal years were as follows:

                              Year Ended March 31,
                              --------------------
Fees Paid to                            2008                  2007                  2006
------------                            ----                  ----                  ----

ICCC*                                    N/A             $3,325,513              $4,426,850
ABIM**                            $2,199,654***          $2,152,654              $2,617.450

*    Effective March 31, 2007, fees were paid to DIMA.

**   Effective March 15, 2008, fees were paid to DIMA.

***  The Advisor  waived  $4,070 of the advisory  fees for the fiscal year ended
     March 31, 2008.

Through September 30, 2008, the Advisor has contractually agreed to waive all or
a portion of its management fee and reimburse or pay certain operating expenses
so that the total annual operating expenses of the fund will be capped at a
ratio no higher than 2.06% for Class B shares, excluding certain expenses such
as extraordinary expenses, taxes, brokerage, interest and acquired funds
(underlying funds) fees and expenses.

Through July 31, 2009, the Advisor has contractually agreed to waive its
management fee by an amount equal to the amount of management fee borne by the
fund as a shareholder of such other affiliated mutual funds. Accordingly, Net
Annual Operating Expenses will vary based in part on the amount of the fund's
investment in such other affiliated mutual funds.

Effective October 1, 2008 through September 30, 2009, the Advisor has
contractually agreed to waive all or a portion of its management fee and
reimburse or pay certain operating expenses so that the total annual operating
expenses of the fund will be capped at a ratio no higher than 1.27%, 2.02% and
2.02% for Class A, Class B and Class C shares, respectively, excluding certain
expenses such as extraordinary expenses, taxes, brokerage, interest and acquired
funds (underlying funds) fees and expenses.

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

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.

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.

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 Manager

The following table shows the dollar range of shares owned beneficially and of
record by each member of the Fund's portfolio management team in the Fund 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 the Fund's most
recent fiscal year end.

                                                       Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                             Fund Shares Owned                      Fund Shares Owned
-------------------------                             -----------------                      -----------------

David Hone                                                    $0                            $100,001 - $500,000

Conflicts of Interest

In addition to managing the assets of the Fund, the Fund'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
the Fund's most recent fiscal year end.

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
-------------------------              ---------           ---------             ---------             --------

David Hone                                 3             $687,015,171                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
-------------------------             --------             --------              ---------             --------

David Hone                                0                   $0                     0                    $0

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
-------------------------             --------          --------------           ---------             --------

David Hone                               14              $177,636,099                0                    $0

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 Fund. 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 Fund
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 Fund and also for  other
     clients advised by the Advisor,  including other client accounts managed by
     the Fund's portfolio management team. Investment decisions for the Fund 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 Fund 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 Fund.  Purchase  and sale orders for the Fund may be  combined  with
     those of other clients of the Advisor in the interest of achieving the most
     favorable net results to the Fund 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 Fund 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 the  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.

                             FUND SERVICE PROVIDERS

Administrator

The Fund has an administrative services agreement with the Advisor (the
"Administrative Services Agreement"), pursuant to which the Advisor provides
administrative services to the Fund including, among others, providing the Fund
with personnel, preparing and making required filings on behalf of the Fund,
maintaining books and records for the Fund, and monitoring the valuation of Fund
securities. For all services provided under the Administrative Services
Agreement, the Fund pays the Advisor a fee of 0.10% of the Fund'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 of the
Fund reasonably deems necessary for the proper administration of the Fund. The
Advisor provides the Fund with personnel; arranges for the preparation and
filing of the Fund's tax returns; prepares and submits reports and meeting
materials to the Board and the shareholders; prepares and files updates to the
Fund's Prospectuses and Statement of Additional Information as well as other
reports required to be filed by the SEC; maintains the Fund's records; provides
the Fund 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 Fund; assists in the
resolution of accounting issues that may arise with respect to the Fund;
establishes and monitors the Fund's operating expense budgets; reviews and
processes the Fund's bills; assists in determining the amount of dividends and
distributions available to be paid by the Fund, 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.

Pursuant to an agreement between DIMA and State Street Bank and Trust Company
("SSB"), DIMA has delegated certain administrative functions to SSB. The costs
and expenses of such delegation are paid by DIMA from its fees as administrator,
not by the Fund.

The fees paid to DIMA for the fiscal year ended March 31, 2008 and from June 1,
2006 (inception of DIMA's service as administrator) to March 31, 2007 are set
out below.

                                   For the Fiscal Year End March 31
                                   --------------------------------
                               2008                               2007*
                               ----                               -----

DWS Value Builder Fund       $305,639                            $342,274

*    For the period July 1, 2006 through March 31, 2007.

Distributor

DIDI, an affiliate of the Advisor, serves as the distributor of each class of
the Fund's Shares pursuant to a Distribution Agreement (the "Distribution
Agreement"). DIDI has entered into Selling Group Agreements with certain
broker-dealers (each a "Participating Dealer"). If a Participating Dealer
previously had agreements in place with DIDI and ICC Distributors, Inc. (the
previous distributor for the Fund) the DIDI agreement controls. If the
Participating Dealer did not have an agreement with DIDI, then the terms of the
assigned ICC Distributors, Inc. agreement remained in effect. These Selling
Group Agreements may be terminated by their terms or by the terms of the
Distribution Agreement, as applicable. DIDI is a wholly owned subsidiary of
Deutsche Bank AG. The address for DIDI is 222 South Riverside Plaza, Chicago, IL
60606.

The Distribution Agreement provides that the Distributor shall; (i) use
reasonable efforts to sell Shares upon the terms and conditions contained in the
Distribution Agreement and the Fund's then current Prospectuses; (ii) use its
best efforts to conform with the requirements of all federal and state laws
relating to the sale of the Shares; (iii) adopt and follow procedures as may be
necessary to comply with the requirements of the National Association of
Securities Dealers, Inc. and any other applicable self-regulatory organization;
(iv) perform its duties under the supervision of and in accordance with the
directives of the Fund's Board of Directors and the Fund's Articles of
Incorporation and By-Laws; and (v) provide the Fund's Board of Directors with a
written report of the amounts expended in connection with the Distribution
Agreement. The Distributor shall devote reasonable time and effort to effect
sales of Shares but shall not be obligated to sell any specific number of
Shares. The services of the Distributor are not exclusive and the Distributor
shall not be liable to the Fund or its shareholders for any error of judgment or
mistake of law, for any losses arising out of any investment, or for any action
or inaction of the Distributor in the absence of bad faith, willful misfeasance
or gross negligence in the performance of its duties or obligations under the
Distribution Agreement or by reason of its reckless disregard of its duties and
obligations under the Distribution Agreement. The Distribution Agreement further
provides that the Fund and the Distributor will mutually indemnify each other
for losses relating to disclosures in the Fund's registration statement.

The Distribution Agreement may be terminated at any time upon 60 days' written
notice by the Fund, without penalty, by the vote of a majority of the Fund's
Non-Interested Directors or by a vote of a majority of the Fund's outstanding
Shares of the related class (as defined under "Capital Stock") or upon 60 days'
written notice by the Distributor and shall automatically terminate in the event
of an assignment. The Distribution Agreement has an initial term of one year
from the date of effectiveness. It shall continue in effect thereafter with
respect to each class of the Fund provided that it is approved at least annually
by (i) a vote of a majority of the outstanding voting securities of the related
class of the Fund or (ii) a vote of a majority of the Fund's Board of Directors
including a majority of the Independent Board Members and, with respect to each
class of the Fund for which there is a plan of distribution, so long as such
plan of distribution is approved at least annually by the Independent Directors
in person at a meeting called for the purpose of voting on such approval.

DIDI and certain broker-dealers ("Participating Dealers") have entered into
Sub-Distribution Agreements under which such Participating Dealers have agreed
to process investor purchase and redemption orders and respond to inquiries from
shareholders concerning the status of their accounts and the operations of the
Fund. Any Sub-Distribution Agreement may be terminated or assigned by either
party, without penalty, by the vote of a majority of the Fund's Non-Interested
Directors or by vote of a majority of the outstanding voting securities of the
Fund in the same manner as the Distribution Agreement.

Class A, B and C Shares Only. The Fund, with respect to its Class A, Class B and
Class C shares may enter into Shareholder Servicing Agreements with certain
financial institutions to act as shareholder servicing agents, pursuant to which
the Distributor will allocate a portion of its distribution fee as compensation
for such financial institutions' ongoing shareholder services. The Fund may also
enter into Shareholder Servicing Agreements pursuant to which the Advisor, the
Distributor or their respective affiliates will provide compensation out of its
own resources for ongoing shareholder services. Currently, banking laws and
regulations do not prohibit a financial holding company affiliate from acting as
a distributor or shareholder servicing agent or in other capacities for
investment companies. Although banking laws and regulations prohibit banks from
distributing shares of open-end investment companies such as the Fund, according
to interpretations by various bank regulatory authorities, financial
institutions are not prohibited from acting in other capacities for investment
companies, such as the shareholder servicing capacities described above. Should
future legislative, judicial or administrative action prohibit or restrict the
activities of the shareholder servicing agents in connection with the
Shareholder Servicing Agreements, the Fund may be required to alter materially
or discontinue its arrangements with the shareholder servicing agents. Such
financial institutions may impose separate fees in connection with these
services and investors should review the Prospectuses and this Statement of
Additional Information in conjunction with any such institution's fee schedule.

As compensation for providing distribution services as described above for the
Class A Shares, the Distributor receives an annual fee, paid monthly, equal to
0.25% of the average daily net assets of the Class A Shares. With respect to the
Class A Shares, the Distributor expects to allocate up to all of its fee to
Participating Dealers and shareholder servicing agents. As compensation for
providing distribution as described above for Class B and C Shares, the
Distributor receives an annual fee, paid monthly, equal to 0.75% of the average
daily net assets of such class. In addition, with respect to the Class B and C
Shares, the Distributor receives a shareholder servicing fee at an annual rate
of 0.25% of the average daily net assets of such class. (See the Prospectus for
Class A, B and C shares.)

As compensation for providing distribution and shareholder services to the Fund
for the last three fiscal years, the Fund's distributor received fees in the
following amounts:

                                                                           Fiscal Year Ended March 31,
Fee                                                                  2008             2007              2006
---                                                                  ----             ----              ----

Class A 12b-1 Distribution and Shareholder Servicing Fee           $593,087         $840,622        $1,116,917
Class B 12b-1 Distribution and Shareholder Servicing Fee            $64,450         $106,631          $180,760
Class C 12b-1 Distribution and Shareholder Servicing Fee           $122,125         $160,402          $203,528

Pursuant to Rule 12b-1 under the 1940 Act, which provides that investment
companies may pay distribution expenses, directly or indirectly, only pursuant
to a plan adopted by the investment company's board of directors and approved by
its shareholders. The Fund has adopted a 12b-1 Plan of Distribution for each
class of Shares (except the Institutional Class) (the "12b-1 Plans"). Under each
12b-1 Plan, the Fund pays a fee to the Distributor for distribution and other
shareholder servicing assistance as set forth in the Distribution Agreement, and
the Distributor is authorized to make payments out of its fee to Participating
Dealers and shareholder servicing agents. The 12b-1 Plans remain in effect from
year to year as specifically approved (a) at least annually by the Fund's Board
of Directors and (b) by the affirmative vote of a majority of the Non-Interested
Directors who have no direct or indirect financial interest in such 12b-1 Plans,
by votes cast in person at a meeting called for such purpose.

In approving the 12b-1 Plans, the Directors concluded, in the exercise of their
reasonable business judgment, that there was a reasonable likelihood that the
12b-1 Plans would benefit the Fund and its shareholders. The 12b-1 Plans will be
renewed only if the Board makes a similar determination in each subsequent year.
The 12b-1 Plans may not be amended to increase materially the fee to be paid
pursuant to the Distribution Agreement without the approval of the shareholders
of the Fund. The 12b-1 Plans may be terminated at any time by the vote of a
majority of the Independent Board Members or by a vote of a majority of the
Fund's outstanding shares (as defined under "Capital Stock").

During the continuance of the 12b-1 Plans, the Fund's Board of Directors will be
provided for their review, at least quarterly, a written report concerning the
payments made under the 12b-1 Plans to the Distributor pursuant to the
Distribution Agreement and to Participating Dealers pursuant to any
Sub-Distribution Agreements. Such reports shall be made by the persons
authorized to make such payments. In addition, during the continuance of the
12b-1 Plans, the selection and nomination of the Fund's Non-Interested Directors
shall be committed to the discretion of the Independent Board Members then in
office.

Under the 12b-1 Plans, amounts allocated to Participating Dealers and
shareholder servicing agents may not exceed amounts payable to the Distributor
under the 12b-1 Plans. Payments under the 12b-1 Plans are made as described
above regardless of the Distributor's actual cost of providing distribution
services and may be used to pay the Distributor's overhead expenses. If the cost
of providing distribution services to the Class A Shares is less than 0.25% of
the Class A Shares' average daily net assets for any period or if the cost of
providing distribution services to the Class B Shares and the Class C Shares is
less than 0.75% of the classes' respective average daily net assets for any
period, the unexpended portion of the distribution fees may be retained by the
Distributor. The 12b-1 Plans do not provide for any charges to the Fund for
excess amounts expended by the Distributor and if a 12b-1 Plan is terminated in
accordance with its terms, the obligation of the Fund to make payments to the
Distributor pursuant to such 12b-1 Plan will cease and the Fund will not be
required to make any payments past the date the Distribution Agreement
terminates with respect to that class. Thus, there is no legal obligation for
the Fund to pay any expenses incurred by DIDI other than fees previously accrued
and payable under a Rule 12b-1 Plan, if for any reason the Rule 12b-1 Plan is
terminated in accordance with its terms. Future fees under the Rule 12b-1 Plan
may or may not be sufficient to cover DIDI for its expenses incurred. On the
other hand, under certain circumstances, DIDI might collect in the aggregate
over certain periods more in fees under the Rule 12b-1 Plan than it has expended
over that same period in providing distribution services for the Fund. In
connection with Class B shares, for example, if shares of the Fund were to
appreciate (resulting in greater asset base against which Rule 12b-1 fees are
charged) and sales of the Fund's shares were to decline (resulting in lower
expenditures by DIDI under the Rule 12b-1 Plan), fees payable could exceed
expenditures. This may also happen over certain periods shorter than the life of
the Rule 12b-1 Plan simply due to the timing of expenses incurred by DIDI that
is not matched to the timing of revenues received (e.g., a sales commission may
be paid by DIDI related to an investment in year 1, while the Rule 12b-1 fee to
DIDI related to that investment may accrue during year 1 through year 6 prior to
conversion of the investment to Class A shares). As a result, if DIDI's expenses
are less than the Rule 12b-1 fees, DIDI will retain its full fees and make a
profit. In return for payments received pursuant to the 12b-1 Plans for the
Class A shares and the Class B shares for the last three fiscal years, the
Fund's Distributor paid the distribution related expenses of the related classes
including one or more of the following: printing and mailing of prospectuses to
other than current shareholders; compensation to dealers and sales personnel;
and interest, carrying or other financing charges.

                                           12b-1 Compensation to Underwriter and Firms for the
                                                     Fiscal Year Ended March 31, 2008
                                                     --------------------------------

                                               12b-1           12b-1
                                            Distribution    Shareholder    12b-1 Compensation
                                                Fees       Services Fees      Paid to Firms
                                                ----       -------------      -------------

DWS Value Builder Fund         Class A               $0      $603,003            $579,264
                               Class B          $48,830       $16,227             $19,757
                               Class C          $92,524       $30,816            $122,589

                                                           Other Expenses Paid by Underwriter for the
                                                               Fiscal Year Ended March 31, 2008
                                                               --------------------------------
                                           Advertising,
                                              Sales,
                                            Literature
                                               and                        Marketing
                                           Promotional     Prospectus     and Sales     Postage and     Imputed
                                            Materials       Printing       Expenses       Mailing      Interest
                                            ---------       --------       --------       -------      --------

DWS Value Builder Fund         Class A        $65,223         $4,328         $16,663       $9,887              $0
                               Class B         $1,118            $47            $246         $159        $137,033
                               Class C         $1,140            $84            $264         $145              $0

The Fund's Distributor received commissions on the sale of the Class A shares
and contingent deferred sales charges on the redemption of Class A, Class B and
Class C shares and from such commissions and sales charges retained the
following amounts:

                                                           Fiscal Year Ended March 31,
                                                           ---------------------------
                                          2008                           2007                          2006
                                          ----                           ----                          ----

           Class                 Received       Retained       Received       Retained       Received       Retained
           -----                 --------       --------       --------       --------       --------       --------

Class A Commissions               $6,664             $0        $13,092            $0         $15,377            $0
Class B Contingent
Deferred Sales Charge            $20,608             $0        $42,841            $0         $44,484            $0
Class C Contingent
Deferred Sales Charge               $195             $0         $2,397            $0          $3,362            $0

In addition, a deferred sales charge of up to 1% is assessed on certain
redemption of Class A shares. For the fiscal year ended March 31, 2008 DIDI
received $2,391 for Class A shares.

The Fund paid all costs associated with its organization and registration under
the 1933 Act and the 1940 Act. Except as described elsewhere, the Fund pays or
causes to be paid all continuing expenses of the Fund, including, without
limitation: investment advisory and distribution fees; the charges and expenses
of any registrar, any custodian or depository appointed by the Fund for the
safekeeping of cash, portfolio securities and other property, and any transfer,
dividend or accounting agent or agents appointed by the Fund; brokers'
commissions chargeable to the Fund in connection with portfolio securities
transactions to which the Fund is a party; all taxes, including securities
issuance and transfer taxes, and fees payable by the Fund to federal, state or
other governmental agencies; the costs and expenses of engraving or printing of
certificates representing shares; all costs and expenses in connection with the
registration and maintenance of the Fund and its shares with the SEC and various
states and other jurisdictions (including filing fees, legal fees and
disbursements of counsel); the costs and expenses of printing, including
typesetting and distributing prospectuses and statements of additional
information of the Fund and supplements thereto to the Fund's shareholders; all
expenses of shareholders' and Directors' meetings and of preparing, printing and
mailing proxy statements and reports to shareholders; fees and travel expenses
of Directors and Director members of any advisory board or committee; all
expenses incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any outside
service used for pricing of the shares; fees and expenses of legal counsel,
including counsel to the Independent Board Members, and of independent certified
public accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund borrowings;
postage; insurance premiums on property or personnel (including Officers and
Directors) of the Fund which inure to its benefit; extraordinary expenses
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto); and all other charges and costs
of the Fund's operation unless otherwise explicitly assumed by the Advisor or
DIDI.

Capital Stock

Under the Corporation's Articles of Incorporation, the Corporation authorized
shares of capital stock, with a par value of $.001 per share. The Board of
Directors may increase or decrease the number of authorized shares without
shareholder approval.

The Corporation's Articles of Incorporation provide for the establishment of
separate series and separate classes of shares by the Directors at any time. The
Corporation currently has one series, the Fund, and the Board has designated
four classes of Shares of the Fund: Class A Shares, Class B Shares, Class C
Shares and Institutional Class Shares. In the event separate series or classes
are established, all shares of the Fund, regardless of series or class, would
have equal rights with respect to voting, except that with respect to any matter
affecting the rights of the holders of a particular series or class, the holders
of each series or class would vote separately. Each such series would be managed
separately and shareholders of each series would have an undivided interest in
the net assets of that series. For tax purposes, the series would be treated as
separate entities. Generally, each class of shares issued by a particular series
would be identical to every other class and expenses of the Fund (other than
12b-1 and any applicable service fees) are prorated among all classes of a
series based upon the relative net assets of each class. Any matters affecting
any class exclusively will be voted on by the holders of such class.

Shareholders of the Fund do not have cumulative voting rights, and therefore the
holders of more than 50% of the outstanding shares voting together for election
of Directors may elect all the members of the Board of Directors of the Fund. In
such event, the remaining holders cannot elect any members of the Board of
Directors of the Fund.

There are no preemptive, conversion or exchange rights applicable to any of the
shares. The issued and outstanding shares are fully paid and non-assessable. In
the event of liquidation or dissolution of the Corporation, each share is
entitled to its portion of the Fund's assets (or the assets allocated to a
separate series of shares if there is more than one series) after all debts and
expenses have been paid.

As used in this Statement of Additional Information the term "majority of the
outstanding shares" means the vote of the lesser of (i) 67% or more of the
shares present at a meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or (ii) more than 50% of the
outstanding shares.

Custodian

SSB is the Fund's custodian. SSB is located at One Heritage Drive, JPB/2N, North
Quincy, MA 02171. As custodian, SSB will hold the Fund's assets.

Transfer Agent

DWS Investments Service Company ("DISC"), an affiliate of the Advisor, serves as
the Fund's transfer agent and dividend disbursing agent pursuant to a transfer
agency agreement. Under its transfer agency agreement with the Fund, DISC
maintains the shareholder account records for the Fund, handles certain
communications between shareholders and the Fund and causes to be distributed
any dividends and distributions payable by the Fund. The Advisor may be
reimbursed by the Fund for its out-of-pocket expenses. For the fiscal year ended
March 31, 2008, the amount charged to the Fund by DISC for transfer agency
services aggregated $327,005, of which $4,586 was waived. For the fiscal year
ended March 31, 2007, the amount charged to the Fund by DISC for transfer agency
services aggregated $465,511, of which $109,779 was waived.

The Transfer Agent receives an annual service fee for each account of the Fund,
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 Fund.
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 Fund or
are paid directly by the Fund. 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 Fund with the
prior approval of the Fund's Board.

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

Legal Counsel

Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019,
serves as counsel to the Fund.

Ropes & Gray LLP, One International Place, Boston, Massachusetts 02110-2624 and
Vedder Price P.C., 222 North LaSalle Street, Chicago, Illinois 60601, serve as
co-counsels to the Independent Directors.

Independent Registered Public Accounting Firm

The financial highlights of the Fund included in the Fund's Prospectuses and the
Financial Statements incorporated by reference in this Statement of Additional
Information have been so included or incorporated by reference in reliance on
the report of PricewaterhouseCoopers LLP, independent registered public
accounting firm, 125 High Street, Boston, MA 02110-2624, given on the authority
of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP
audits the financial statements of the Fund and provides other audit, tax and
related services. Shareholders will receive annual audited financial statements
and semiannual unaudited financial statements.

                             PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages the fund's
investments, references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Fund 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 Fund 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 Fund
to their customers. However, the Advisor does not consider sales of shares of
the Fund or other funds advised by the Advisor as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund and, accordingly,
has implemented policies and procedures reasonably designed to prevent its
traders from considering sales of shares of the Fund as a factor in the
selection of broker-dealers to execute portfolio transactions for the Fund.

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 Fund,
to cause the Fund 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 Fund 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 Fund. Services
received from broker-dealers that executed securities transactions for the Fund
will not necessarily be used by the Advisor specifically to service the Fund.

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 Fund 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 Fund 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 the Fund 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 Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Fund'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, the
Sub-Advisor or one of its affiliates) may act as a broker for the Fund and
receive brokerage commissions or other transaction-related compensation from the
Fund 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 Fund's 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 Fund a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

    Aggregate Brokerage Commission Paid for the fiscal years ended March 31,

                 2008                                    2007                                   2006
                 ----                                    ----                                   ----

               $349,161                                $280,305                               $271,824

                      Affiliated Brokerage Commissions for the fiscal year ended March 31, 2008

 Dollar Amount of Commissions paid to    Percentage of Commissions Paid      Percentage of Transactions Involving
          Affiliated Brokers                  to Affiliated Brokers         Commissions Paid to Affiliated Brokers
          ------------------                  ---------------------         --------------------------------------

                  $0                                   0%                                     0%

During the fiscal years ended March 31, 2008, March 31, 2007 and March 31, 2006,
the Advisor and/or former Sub-advisor, Alex. Brown Investment Management, LLC
("ABIM"), directed no transactions to broker-dealers and paid no related
commissions because of research services provided to the Fund.

The Fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) that the Fund has acquired
during the most recent fiscal year. As of March 31, 2008, the Fund held no
securities of its regular brokers or dealers.

Portfolio Turnover

The Fund's annual portfolio turnover rate (the lesser of the value of the
purchases or sales for the year divided by the average monthly market value of
the portfolio during the year, excluding US Government securities and securities
with maturities of one year or less) may vary from year to year, as well as
within a year, depending on market conditions. For the fiscal years ended March
31, 2008 and March 31, 2007, the Fund's portfolio turnover rates were 73% and
11%, respectively.

                        PURCHASE AND REDEMPTION OF SHARES

General Information

Shares of the Fund are distributed by DWS Investments Distributors, Inc.
("DIDI"). The Fund offers four classes of shares, Classes A, B, C and
Institutional shares. General information on how to buy shares of the Fund is
set forth in "How to Invest in the Fund" in the Fund's Prospectuses. The
following supplements that information.

Investors may invest in Institutional shares by establishing a shareholder
account with the Fund or through an authorized shareholder service agent.
Investors may invest in Class A, B and C shares by establishing a shareholder
account directly with the Fund's transfer agent or a securities dealer or any
financial institution that is authorized to act as a shareholder servicing
agent. Additionally, the Fund has authorized brokers to accept purchase and
redemption orders for Institutional Class shares, as well as Class A, B and C
shares. Brokers, including authorized brokers of service organizations, are, in
turn, authorized to designate other intermediaries to accept purchase and
redemption orders on the Fund's behalf. Investors, who invest through brokers,
service organizations or their designated intermediaries, may be subject to
minimums established by their broker, service organization or designated
intermediary.

Policies and procedures affecting transactions in Fund shares can be changed at
any time without notice, subject to applicable law. Transactions may be
contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the Fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A distribution will be reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value of the Fund
next determined after receipt in good order by DIDI of the order accompanied by
payment. Orders received by dealers or other financial services firms prior to
the determination of net asset value and received in good order by DIDI prior to
the determination of net asset value will be confirmed at a price based on the
net asset value next determined after receipt by DIDI ("trade date").

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the transfer agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.

Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments, and may assess transaction or other fees.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services. Firms also may hold the Fund's shares in
nominee or street name as agent for and on behalf of their customers. In such
instances, the Fund's transfer agent will have no information with respect to or
control over the accounts of specific shareholders. Such shareholders may obtain
access to their accounts and information about their accounts only from their
firm. Certain of these firms may receive compensation from the Fund through the
shareholder service agent for record-keeping and other expenses relating to
these nominee accounts. In addition, certain privileges with respect to the
purchase and redemption of shares or the reinvestment of dividends may not be
available through such firms. Some firms may participate in a program allowing
them access to their clients' accounts for servicing including, without
limitation, transfers of registration and dividend payee changes; and may
perform functions such as generation of confirmation statements and disbursement
of cash dividends. Such firms, including affiliates of DIDI, may receive
compensation from the Fund through the Shareholder Service Agent for these
services.

The Fund has authorized one or more financial service institutions, including
certain members of FINRA other than the Distributor ("financial institutions"),
to accept purchase and redemption orders for the Fund's shares. Such financial
institutions may also designate other parties, including plan administrator
intermediaries, to accept purchase and redemption orders on the Fund's behalf.
Orders for purchases or redemptions will be deemed to have been received by the
Fund when such financial institutions or, if applicable, their authorized
designees accept the orders. Subject to the terms of the contract between the
Fund and the financial institution, ordinarily orders will be priced at the
Fund's net asset value next computed after acceptance by such financial
institution or its authorized designees and accepted by the Fund. Further, if
purchases or redemptions of the Fund's shares are arranged and settlement is
made at an investor's election through any other authorized financial
institution, that financial institution may, at its discretion, charge a fee for
that service. The Board of Directors and the Distributor, also the Fund's
principal underwriter, each has the right to limit the amount of purchases by,
and to refuse to sell to, any person. The Directors and the Distributor may
suspend or terminate the offering of shares of the Fund at any time for any
reason.

DIDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Investments Wholesalers"). Generally, DWS
Investments Wholesalers market shares of the DWS funds to financial advisors,
who in turn may recommend that investors purchase shares of a DWS fund. The Plan
is an incentive program that combines a monthly incentive component with a
quarterly strategic bonus component. Under the Plan, DWS Investments Wholesalers
will receive a monetary monthly incentive based on the amount of sales generated
from their marketing of the funds, and that incentive will differ depending on
the product category of the fund. Each fund is assigned to one of three product
categories -- "Strategic," "Tactical" or "all other funds" -- taking into
consideration, among other things, the following criteria, where applicable:

o    The  Fund's  consistency  with  DWS  Investments'  branding  and  long-term
     strategy.
o    The Fund's competitive performance.
o    The Fund's Morningstar rating.
o    The  length  of  time  the  Fund's  Portfolio  Managers  have  managed  the
     Fund/Strategy.
o    Market size for the fund category.
o    The Fund's size, including sales and redemptions of the Fund's shares.

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Investments, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the
Strategic and Tactical categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-investments.com, approximately one month after the
end of each quarter. DWS Investments Wholesalers receive the highest
compensation for Strategic funds, less for Tactical funds and the lowest for all
other funds. The level of compensation among these categories may differ
significantly.

The prospect of receiving, or the receipt of, additional compensation by a DWS
Investments Wholesaler under the Plan may provide an incentive to favor
marketing the Strategic or Tactical funds over all other funds. The Plan,
however, will not change the price that investors pay for shares of a fund. The
DWS Investments Compliance Department monitors DWS Investments Wholesaler sales
and other activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. The Fund or
its agents will not be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized instructions pursuant to these privileges if the Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine. Verification procedures include recording
instructions, requiring certain identifying information before acting upon
instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.

QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.

Dividend Payment Option. Investors may have dividends and distributions
automatically deposited to their predesignated bank account through DWS
Investments' Dividend Payment Option request form. Shareholders whose
predesignated checking account of record is with a member bank of Automated
Clearing House Network (ACH) can have income and capital gain distributions
automatically deposited to their personal bank account usually within three
business days after the Fund pays its distribution. A Dividend Payment Option
request form can be obtained by visiting our Web site at:
www.dws-investments.com or calling (800) 621-1048. Confirmation Statements will
be mailed to shareholders as notification that distributions have been
deposited.

Tax-Sheltered Retirement Plans. The Shareholder Service Agent provides
retirement plan services and documents and DIDI can establish investor accounts
in any of the following types of retirement plans:

o    Traditional, Roth and Education IRAs. This includes Savings Incentive Match
     Plan for  Employees  of Small  Employers  ("SIMPLE"),  Simplified  Employee
     Pension Plan ("SEP") IRA accounts and prototype documents.

o    403(b)(7) Custodial  Accounts.  This type of plan is available to employees
     of most non-profit organizations.

o    Prototype money purchase pension and profit-sharing plans may be adopted by
     employers.

Brochures describing these plans as well as model defined benefit plans, target
benefit plans, 457 plans, 401(k) plans, simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors should consult with their own tax advisors before establishing a
retirement plan.

Purchases

The Fund reserves the right to withdraw all or any part of the offering made by
its Prospectuses and to reject purchase orders for any reason. Also, from time
to time, the Fund may temporarily suspend the offering of any class of its
shares to new investors. During the period of such suspension, persons who are
already shareholders of such class of such Fund may be permitted to continue to
purchase additional shares of such class and to have dividends reinvested.

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 person who opens an account. For
more information please see "Policies You Should Know About" in the Fund
Prospectuses.

The Fund may waive the minimum for purchases by directors, officers or employees
of the Fund or the Advisors and their affiliates.

Financial Services Firms' Compensation. Banks and other financial services firms
may provide administrative services related to order placement and payment to
facilitate transactions in shares of the Fund for their clients, and DIDI may
pay them a transaction fee up to the level of the discount or commission
allowable or payable to dealers.

In addition to the discounts or commissions described herein and in the
Prospectuses, DIDI, the Advisor, or its affiliates may pay or allow additional
discounts, commissions or promotional incentives, in the form of cash, to firms
that sell shares of the Fund. In some instances, such amounts may be offered
only to certain firms that sell or are expected to sell during specified time
periods certain minimum amounts of shares of the Fund, or other funds
underwritten by DIDI.

Upon notice to all dealers, DIDI may re-allow to dealers up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed, such
dealers may be deemed to be underwriters as that term is defined in the 1933
Act.

DIDI may at its discretion compensate investment dealers or other financial
services firms in connection with the sale of Class A shares of the Fund in
accordance with the Large Order NAV Purchase Privilege and one of the two
compensation schedules up to the following amounts:

                Compensation Schedule #1:                                 Compensation Schedule #2:
      Retail Sales and DWS Investments Flex Plan(1)                   DWS Investments Retirement Plan(2)
                                              As a                                                   As a
Amount of                                 Percentage of               Amount of                Percentage of Net
Shares Sold                              Net Asset Value             Shares Sold                  Asset Value

$1 million to $3 million (equity              1.00%                Over $3 million               0.00% - 0.50%
funds)

Over $3 million to $50 million                0.50%                       --                            --

Over $50 million                              0.25%                       --                            --

(1)  For purposes of determining  the  appropriate  commission  percentage to be
     applied  to a  particular  sale  under the  foregoing  schedule,  DIDI will
     consider the  cumulative  amount  invested by the purchaser in the Fund and
     other DWS Funds including  purchases pursuant to the "Combined  Purchases,"
     "Letter of Intent" and "Cumulative Discount" features referred to below.

(2)  Compensation  Schedule 2 applies to  employer  sponsored  employee  benefit
     plans using the OmniPlus  subaccount  record  keeping system made available
     through ADP, Inc. under an alliance with DIDI and its affiliates.

DIDI compensates firms for sales of Class B shares at the time of sale at a
commission rate of up to 3.75% of the amount of Class B shares purchased. DIDI
is compensated by the Fund for services as distributor and principal underwriter
for Class B shares. Except as provided below, for sales of Class C shares, DIDI
advances to firms the first year distribution fee at a rate of 0.75% of the
purchase price of such shares, and, for periods after the first year, DIDI
currently pays firms for sales of Class C shares a distribution fee, payable
quarterly, at an annual rate of 0.75% of net assets attributable to Class C
shares maintained and serviced by the firm. For sales of Class C shares to
employer sponsored employee benefit plans using the OmniPlus subaccount record
keeping system made available through ADP, Inc. under an alliance with DIDI and
its affiliates, DIDI does not advance the first year distribution fee and for
periods after the date of sale, DIDI currently pays firms a distribution fee,
payable quarterly, at an annual rate of 0.75% based on net assets as of the last
business day of the month attributable to Class C shares maintained and serviced
by the firm. DIDI is compensated by the Fund for services as distributor and
principal underwriter for Class C shares.

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 Fund shares or the retention and/or servicing of
investors and Fund 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
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund 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 Fund (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 Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of the Fund 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 Fund 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 Fund serviced and maintained by the financial advisor, .10% to
..25% of sales of the Fund 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 Fund or of any particular share class
of the Fund. 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
Fund.

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 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.

As of the date hereof, each Fund 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
First Clearing/Wachovia Securities
Fiserv Trust Company
HD Vest Investment Securities, Inc.
ING Group
John Hancock Distributors LLC
LPL Financial
M.L. Stern & Co.
Marsh Insurance and Investment Company
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
Raymond James & Associates
Raymond James Financial Services
RBC Dain Rauscher, Inc
Securities America, Inc.
UBS Financial Services
Wachovia Securities
Wells Fargo Investments, LLC

Channel: Cash Product Platform

Allegheny Investments LTD
Bank of New York (Hare & Co.)
Bear, Stearns Securities Corp.
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
Huntleigh Securities
Lincoln Investment Planning
LPL Financial
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
US Bancorp
UBS
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.

Class A Purchases. The sales charge scale is applicable to purchases made at one
time by any "purchaser" which includes: an individual; or such individuals,
spouse and children under the age of 21; or a trustee or other fiduciary of a
single trust estate or single fiduciary account; or an organization exempt from
federal income tax under Section 501(c)(3) or (13) of the Code; or a pension,
profit-sharing or other employee benefit plan whether or not qualified under
Section 401 of the Code; or other organized group of persons whether
incorporated or not, provided the organization has been in existence for at
least six months and has some purpose other than the purchase of redeemable
securities of a registered investment company at a discount. In order to qualify
for a lower sales charge, all orders from an organized group will have to be
placed through a single investment dealer or other firm and identified as
originating from a qualifying purchaser.

Initial Sales Charge Alternative -- Class A Shares. The public offering price of
Class A shares for purchasers choosing the initial sales charge alternative is
the net asset value plus a sales charge, as set forth below.

                                                                 Sales Charge
                                                                 ------------
                                                                                         Allowed to Dealers
                                           As a Percentage of    As a Percentage of     as a Percentage of
Amount of Purchase                           Offering Price       Net Asset Value*         Offering Price
------------------                           --------------       ----------------         --------------

Less than $50,000                                  5.75%                  6.10%                 5.20%
$50,000 but less than $100,000                     4.50                   4.71                  4.00
$100,000 but less than $250,000                    3.50                   3.63                  3.00
$250,000 but less than $500,000                    2.60                   2.67                  2.25
$500,000 but less than $1 million                  2.00                   2.04                  1.75
$1 million and over                                .00**                   .00**               ***

*    Rounded to the nearest one-hundredth percent.

**   Redemption of shares may be subject to a contingent  deferred  sales charge
     as discussed below.

***  Commission is payable by DIDI as discussed below.

Class A Quantity Discounts. An investor or the investor's dealer or other
financial services firm must notify the Shareholder Service Agent or DIDI
whenever a quantity discount or reduced sales charge is applicable to a
purchase. In order to qualify for a lower sales charge, all orders from an
organized group will have to be placed through a single investment dealer or
other firm and identified as originating from a qualifying purchaser.

Combined Purchases. The Fund's Class A shares may be purchased at the rate
applicable to the sales charge discount bracket attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.

Letter of Intent. The reduced sales charges for Class A shares, as shown in the
applicable Prospectus, also apply to the aggregate amount of purchases of Class
A shares of DWS Funds that bear a sales charge made by any purchaser within a
24-month period under a written Letter of Intent ("Letter") provided by DIDI.
The Letter, which imposes no obligation to purchase or sell additional Class A
shares, provides for a price adjustment depending upon the actual amount
purchased within such period. The Letter provides that the first purchase
following execution of the Letter must be at least 5% of the amount of the
intended purchase, and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending completion of the intended
purchase. If the total investments under the Letter are less than the intended
amount and thereby qualify only for a higher sales charge than actually paid,
the appropriate number of escrowed shares are redeemed and the proceeds used
toward satisfaction of the obligation to pay the increased sales charge. The
Letter for an employer-sponsored employee benefit plan maintained on the
subaccount record keeping system available through the Shareholder Service Agent
may have special provisions regarding payment of any increased sales charge
resulting from a failure to complete the intended purchase under the Letter. A
shareholder may include the value (at the maximum offering price, which is
determined by adding the maximum applicable sales load charged to the net asset
value) of all Class A shares of such DWS Funds held of record as of the initial
purchase date under the Letter as an "accumulation credit" toward the completion
of the Letter, but no price adjustment will be made on such shares.

Class A Cumulative Discount. Class A shares of the Fund may also be purchased at
the rate applicable to the discount bracket attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is applicable) already owned by the investor or his or
her immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).

For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features described above, employer sponsored employee benefit plans using the
Flex subaccount record keeping system available through ADP, Inc. under an
alliance with DIDI and its affiliates may include: (a) Money Market Funds as
"DWS Funds," (b) all classes of shares of any DWS Fund and (c) the value of any
other plan investments, such as guaranteed investment contracts and employer
stock, maintained on such subaccount record keeping system. Once eligible plan
assets under this provision reach the $1,000,000 threshold, a later decline in
assets below the $1,000,000 threshold will not affect the plan's ability to
continue to purchase Class A shares at net asset value.

Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)  a current or former director or trustee of Deutsche or DWS mutual funds;

(b)  an employee  (including the employee's  spouse or life partner and children
     or stepchildren age 21 or younger) of Deutsche Bank or its affiliates or of
     a subadvisor  to any fund in the DWS family of funds or of a  broker-dealer
     authorized to sell shares of the Fund or service agents of the Funds;

(c)  certain  professionals  who assist in the  promotion  of DWS  mutual  funds
     pursuant  to personal  services  contracts  with DIDI,  for  themselves  or
     members of their families.  DIDI in its discretion may compensate financial
     services  firms  for  sales of Class A shares  under  this  privilege  at a
     commission rate of 0.50% of the amount of Class A shares purchased;

(d)  any trust,  pension,  profit-sharing  or other  benefit  plan for only such
     persons listed under the preceding paragraphs (a) and (b);

(e)  persons  who  purchase  such shares  through  bank trust  departments  that
     process such trades through an automated,  integrated  mutual fund clearing
     program provided by a third party clearing firm;

(f)  selected  employees  (including their spouses or life partners and children
     or stepchildren  age 21 or younger) of banks and other  financial  services
     firms that provide  administrative  services related to order placement and
     payment to facilitate  transactions in shares of the Fund for their clients
     pursuant to an  agreement  with DIDI or one of its  affiliates.  Only those
     employees  of such banks and other firms who as part of their usual  duties
     provide services related to transactions in Fund shares qualify;

(g)  unit  investment  trusts  sponsored  by  Ranson  &  Associates,   Inc.  and
     unitholders  of unit  investment  trusts  sponsored by Ranson & Associates,
     Inc. or its predecessors  through  reinvestment  programs  described in the
     prospectuses of such trusts that have such programs;

(h)  through  certain  investment   advisors  registered  under  the  Investment
     Advisers Act of 1940 and other  financial  services  firms acting solely as
     agent for their clients,  that adhere to certain  standards  established by
     DIDI,  including a requirement  that such shares be sold for the benefit of
     their clients  participating  in an investment  advisory  program or agency
     commission  program  under which such  clients pay a fee to the  investment
     advisor  or  other  firm  for  portfolio  management  or  agency  brokerage
     services. Such shares are sold for investment purposes and on the condition
     that they will not be resold except through redemption or repurchase by the
     Fund;

(i)  employer  sponsored  employee  benefit  plans  using  the  Flex  subaccount
     recordkeeping  system ("Flex  Plans") made  available  through ADP under an
     alliance  with DIDI and its  affiliates,  established  prior to  October 1,
     2003, provided that the Flex Plan is a  participant-directed  plan that has
     not less than 200 eligible employees;

(j)  investors investing $1 million or more, either as a lump sum or through the
     "Combined Purchases," "Letter of Intent" and "Cumulative Discount" features
     referred to above (collectively, the "Large Order NAV Purchase Privilege").
     The Large Order NAV  Purchase  Privilege  is not  available  if another net
     asset value purchase privilege is available;

(k)  defined contribution  investment only plans with a minimum of $1,000,000 in
     plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)  the  acquisition of the assets of or merger or  consolidation  with another
     investment company, or to shareholders in connection with the investment or
     reinvestment  of  income  and  capital  gain  dividends,  and  under  other
     circumstances  deemed  appropriate by DIDI and consistent  with  regulatory
     requirements; and

(m)  a  direct  "roll  over"  of  a  distribution  from  a  Flex  Plan  or  from
     participants in employer sponsored employee benefit plans maintained on the
     OmniPlus  subaccount record keeping system made available through ADP, Inc.
     under an alliance with DIDI and its affiliates into a DWS Investments IRA;

(n)  reinvestment of fund dividends and distributions;

(o)  exchanging  an  investment  in Class A shares  of  another  fund in the DWS
     family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper Short-Term Global Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for non-individual class
members. To make a purchase at net asset value under this privilege, the
investor must, at the time of purchase, submit a written request that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin Class." Shares purchased
under this privilege will be maintained in a separate account that includes only
shares purchased under this privilege. For more details concerning this
privilege, class members should refer to the Notice of (i) Proposed Settlement
with Defendants; and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated August 31, 1995, issued in connection with the aforementioned court
proceeding. For sales of Fund shares at net asset value pursuant to this
privilege, DIDI may in its discretion pay investment dealers and other financial
services firms a concession, payable quarterly, at an annual rate of up to 0.25%
of net assets attributable to such shares maintained and serviced by the firm. A
firm becomes eligible for the concession based upon assets in accounts
attributable to shares purchased under this privilege in the month after the
month of purchase and the concession continues until terminated by DIDI. The
privilege of purchasing Class A shares of the Fund at net asset value under this
privilege is not available if another net asset value purchase privilege also
applies.

Class B Purchases. Class B shares of the Fund are offered at net asset value. No
initial sales charge is imposed. Class B shares sold without an initial sales
charge allow the full amount of the investor's purchase payment to be invested
in Class B shares for his or her account. Class B shares have a contingent
deferred sales charge of 4.00% that declines over time (for shares sold within
six years of purchase) and Rule 12b-1 fees, as described in the Fund's
Prospectus and SAI. Class B shares automatically convert to Class A shares after
six years.

Purchase of Class C Shares. Class C shares of the Fund are offered at net asset
value. No initial sales charge will be imposed. Class C shares sold without an
initial sales charge will allow the full amount of the investor's purchase
payment to be invested in Class C shares for his or her account. Class C shares
will continue to be subject to a contingent deferred sales charge of 1.00% (for
shares sold within one year of purchase) and Rule 12b-1 fees, as described in
the Fund's Prospectus.

Purchase of Institutional Class Shares. Information on how to buy Institutional
Class shares is set forth in the section entitled "Buying and Selling Shares" in
the Fund's prospectus. The following supplements that information. The minimum
initial investment for Institutional Class shares is $1,000,000. The minimum
initial investment may be waived in certain circumstances. The minimum amounts
may be changed at any time in management's discretion.

To sell shares in a retirement account other than an IRA, your request must be
made in writing, except for exchanges to other eligible funds in the DWS family
of funds, which can be requested by phone or in writing. For information on
retirement distributions, contact your service agent or call DWS Investments
Service Company at (800) 621-1048. To sell shares by bank wire you will need to
sign up for these services in advance when completing your account application.

Payroll Investment Plans. A shareholder may purchase shares through Payroll
Direct Deposit or Government Direct Deposit. Under these programs, all or a
portion of a shareholder's net pay or government check is invested each payment
period. A shareholder may terminate participation in these programs by giving
written notice to the shareholder's employer or government agency, as
appropriate. (A reasonable time to act is required.) The Fund is not responsible
for the efficiency of the employer or government agency making the payment or
any financial institutions transmitting payments.

Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS Funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 621-1048 for instructions. The investor must send a duly completed
and signed application to the Fund promptly. A subsequent purchase order may be
placed by established shareholders (except by DWS Investments Individual
Retirement Account (IRA), DWS Simplified Profit Sharing and Money Purchase
Pension Plans, DWS Investments 401(k) and DWS Investments 403(b) Plan holders),
members of FINRA, and banks.

Multi-Class Suitability. DIDI has established the following procedures regarding
the purchase of Class A, Class B and Class C shares. Orders to purchase Class B
shares of $100,000 or more and orders to purchase Class C shares of $500,000 or
more will be declined with the exception of orders received from financial
representatives acting for clients whose shares will be held in an omnibus
account and employer-sponsored employee benefit plans using the Flex subaccount
record keeping system ("System") maintained for DWS Investments-branded plans on
record keeping systems made available through ADP, Inc. under an alliance with
DIDI and its affiliate ("DWS Investments Flex Plans").

The following provisions apply to DWS Investments Flex Plans.

a.   Class B Share DWS Investments Flex Plans. Class B shares have not been sold
     to DWS  Investments  Flex Plans that were  established  on the System after
     October 1, 2003.  Orders to purchase  Class B shares for a DWS  Investments
     Flex Plan  established  on the  System  prior to  October  1, 2003 that has
     regularly been purchasing  Class B shares will be invested instead in Class
     A shares at net asset value when the combined subaccount value in DWS Funds
     or other  eligible  assets  held by the  plan is  $100,000  or  more.  This
     provision will be imposed for the first purchase after eligible plan assets
     reach the $100,000 threshold.  A later decline in assets below the $100,000
     threshold  will not affect the plan's ability to continue to purchase Class
     A shares at net asset value.

b.   Class C Share DWS Investments Flex Plans. Orders to purchase Class C shares
     for a  DWS  Investments  Flex  Plan,  regardless  of  when  such  plan  was
     established  on the System,  will be invested  instead in Class A shares at
     net asset value when the  combined  subaccount  value in DWS Funds or other
     eligible assets held by the plan is $1,000,000 or more. This provision will
     be imposed for the first  purchase  after  eligible  plan assets  reach the
     $1,000,000  threshold.  A later  decline  in assets  below  the  $1,000,000
     threshold  will not affect the plan's ability to continue to purchase Class
     A shares at net asset value.

The procedures described above do not reflect in any way the suitability of a
particular class of shares for a particular investor and should not be relied
upon as such. A suitability determination must be made by investors with the
assistance of their financial representative.

To sell shares by bank wire you will need to sign up for these services in
advance when completing your account application.

Automatic Investment Plan. A shareholder may purchase shares of the Fund through
an automatic investment program. With the Direct Deposit Purchase Plan ("Direct
Deposit"), investments are made automatically (minimum $500 and maximum $250,000
for initial investments and a minimum of $50 and maximum $250,000 for subsequent
investments) from the shareholder's account at a bank, savings and loan or
credit union into the shareholder's Fund account. Termination by a shareholder
will become effective within thirty days after the Shareholder Service Agent has
received the request. The Fund may immediately terminate a shareholder's Direct
Deposit in the event that any item is unpaid by the shareholder's financial
institution.

Minimum Subsequent Investment Policies. For current shareholders of Class A, B
or C shares there is a $50 minimum investment requirement for subsequent
investments in the Fund. There is no minimum subsequent investment requirement
in Class A shares for investments on behalf of participants in certain fee-based
and wrap programs offered through financial intermediaries approved by the
Advisor. There is no minimum subsequent investment required for Institutional
Class Shares.

Redemptions

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by the Fund for up to seven days if the Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
The Fund is not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic Withdrawal Plan. An owner of $5,000 or more of a class of the Fund's
shares at the offering price (net asset value plus, in the case of Class A
shares, the initial sales charge) may provide for the payment from the owner's
account of any requested dollar amount to be paid to the owner or a designated
payee monthly, quarterly, semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. The maximum
annual rate at which shares subject to a CDSC may be redeemed is 12% of the net
asset value of the account. Shares are redeemed so that the payee should receive
payment approximately on the first of the month. Investors using this Plan must
reinvest Fund distributions.

The purchase of Class A shares while participating in a systematic withdrawal
plan will ordinarily be disadvantageous to the investor because the investor
will be paying a sales charge on the purchase of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid. Therefore, the Fund will not knowingly permit additional investments of
less than $2,000 if the investor is at the same time making systematic
withdrawals.

Contingent Deferred Sales Charge (CDSC). The following example will illustrate
the operation of the CDSC. Assume that an investor makes a single purchase of
$10,000 of the Fund's Class B shares and that 16 months later the value of the
shares has grown by $1,000 through reinvested dividends and by an additional
$1,000 of share appreciation to a total of $12,000. If the investor were then to
redeem the entire $12,000 in share value, the CDSC would be payable only with
respect to $10,000 because neither the $1,000 of reinvested dividends nor the
$1,000 of share appreciation is subject to the charge. The charge would be at
the rate of 3.00% ($300) because it was in the second year after the purchase
was made.

The rate of the CDSC is determined by the length of the period of ownership.
Investments are tracked on a monthly basis. The period of ownership for this
purpose begins the first day of the month in which the order for the investment
is received. For example, an investment made in March of the year of investment
will be eligible for the second year's charge if redeemed on or after March of
the following year. In the event no specific order is requested when redeeming
shares subject to a CDSC, the redemption will be made first from shares
representing reinvested dividends and then from the earliest purchase of shares.
DIDI receives any CDSC directly. The charge will not be imposed upon redemption
of reinvested dividends or share appreciation.

The Class A CDSC will be waived in the event of:

(a)  redemptions by a  participant-directed  qualified retirement plan described
     in Code  Section  401(a),  a  participant-directed  non-qualified  deferred
     compensation  plan described in Code Section 457 or a  participant-directed
     qualified  retirement plan described in Code Section 403(b)(7) which is not
     sponsored by a K-12 school district;

(b)  redemptions  by   employer-sponsored   employee  benefit  plans  using  the
     subaccount  record keeping system made available through ADP, Inc. under an
     alliance with DIDI and its affiliates;
(c)  redemption of shares of a shareholder  (including a registered joint owner)
     who has died or is disabled (under certain circumstances);

(d)  redemption of shares of a shareholder  (including a registered joint owner)
     who after purchase of the shares being redeemed  becomes  totally  disabled
     (as  evidenced  by  a   determination   by  the  federal  Social   Security
     Administration);

(e)  redemptions under the Fund's Automatic  Withdrawal Plan at a maximum of 12%
     per year of the net asset value of the account;

(f)  redemptions  of shares whose dealer of record at the time of the investment
     notifies  DIDI  that  the  dealer  waives  the   discretionary   commission
     applicable to such Large Order NAV Purchase; and

(g)  redemptions  for certain loan advances,  hardship  provisions or returns of
     excess contributions from retirement plans.

The Class B CDSC will be waived for the circumstances set forth in items (c),
(d), (e) and (g) for Class A shares. In addition, this CDSC will be waived:

(h)  for redemptions made pursuant to any IRA systematic withdrawal based on the
     shareholder's life expectancy including,  but not limited to, substantially
     equal  periodic  payments   described  in  Internal  Revenue  Code  Section
     72(t)(2)(A)(iv) prior to age 59 1/2;

(i)  for redemptions to satisfy required minimum  distributions after age 70 1/2
     from an IRA account (with the maximum  amount  subject to this waiver being
     based only upon the shareholder's DWS Investments IRA accounts); and

(j)  in  connection  with the following  redemptions  of shares held by employer
     sponsored  employee  benefit  plans  maintained  on the  subaccount  record
     keeping system made  available  through ADP under an alliance with DIDI and
     its affiliates:  (1) to satisfy  participant  loan advances (note that loan
     repayments  constitute  new  purchases  for  purposes  of the  CDSC and the
     conversion  privilege),  (2) in connection  with  retirement  distributions
     (limited at any one time to 12% of the total value of plan assets  invested
     in the Fund),  (3) in connection with  distributions  qualifying  under the
     hardship provisions of the Internal Revenue Code, (4) representing  returns
     of excess  contributions  to such plans and (5) in  connection  with direct
     "roll over" distributions from a Flex Plan into a DWS Investments IRA under
     the Class A net asset value purchase privilege.

The Class C CDSC will be waived for the circumstances set forth in items (b),
(c), (d), (e) and (g) for Class A shares and for the circumstances set forth in
items (h) and (i) for Class B shares. In addition, this CDSC will be waived for:

(k)  redemption of shares by an employer  sponsored  employee  benefit plan that
     offers funds in addition to DWS Funds and whose dealer of record has waived
     the advance of the first year administrative  service and distribution fees
     applicable to such shares and agrees to receive such fees quarterly; and

(l)  redemption of shares purchased through a dealer-sponsored  asset allocation
     program maintained on an omnibus  record-keeping system provided the dealer
     of record had waived the advance of the first year administrative  services
     and  distribution  fees applicable to such shares and has agreed to receive
     such fees quarterly.

In-kind Redemptions. The Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in readily
marketable securities. These securities will be chosen by the Fund and valued as
they are for purposes of computing the Fund's net asset value. A shareholder may
incur transaction expenses in converting these securities to cash.

Exchanges

Shareholders may request a taxable exchange of their shares for shares of the
corresponding class of other DWS Funds without imposition of a sales charge,
subject to the provisions below. For purposes of calculating any CDSC, amounts
exchanged retain their original cost and purchase date.

Shares of money market funds that were acquired by purchase (not including
shares acquired by dividend reinvestment) are subject to the applicable sales
charge on exchange. Certain series of DWS Target Fund are available on exchange
only during the offering period for such series as described in the applicable
prospectus. Tax Free Money Fund -- Investment Class, NY Tax-Free Money Fund --
Investment Class, Money Market Fund -- Investment Class, Cash Management Fund
Institutional, Cash Reserves Fund Institutional, Cash Reserve Fund, Inc. Prime
Series, Tax-Exempt California Money Market Fund, Cash Account Trust and
Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with DIDI. All exchanges among money
funds must meet applicable investor eligibility and investment requirements.
Exchanges may only be made for funds that are available for sale in the
shareholder's state of residence. Currently, Tax-Exempt California Money Market
Fund is available for sale only in California.

Shareholders must obtain prospectuses of the Fund they are exchanging into from
dealers, other firms or DIDI.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS Fund.
Exchanges will be made automatically until the shareholder or a Fund terminates
the privilege. Exchanges are subject to the terms and conditions described
above.

Multi-Class Conversions. For purposes of conversion to Class A shares, shares
purchased through the reinvestment of dividends and other distributions paid
with respect to Class B shares in a shareholder's Fund account will be converted
to Class A shares on a pro rata basis.

                                    DIVIDENDS

The Fund intends to follow the practice of distributing substantially all of its
investment company taxable income, which includes any excess of net realized
short-term capital gains over net realized long-term capital losses. The Fund
may follow the practice of distributing the entire excess of net realized
long-term capital gains over net realized short-term capital losses. However,
the Fund may retain all or part of such gain for reinvestment, after paying the
related federal taxes for which shareholders may then be able to claim a credit
against their federal tax liability. If the Fund does not distribute the amount
of capital gain and/or ordinary income required to be distributed by an excise
tax provision of the Code, the Fund may be subject to that excise tax. In
certain circumstances, the Fund may determine that it is in the interest of
shareholders to distribute less than the required amount.

The Fund intends to pay distributions of substantially all of its income
quarterly.

Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.

Dividends paid by the Fund with respect to each class of its shares will be
calculated in the same manner, at the same time and on the same day.

The level of income dividends per share (as a percentage of net asset value)
will be lower for Class B and Class C Shares than for Class A Shares primarily
as a result of the distribution services fee applicable to Class B and Class C
Shares. Distributions of capital gains, if any, will be paid in the same amount
for each class.

Income and capital gain dividends, if any, of the Fund will be credited to
shareholder accounts in full and fractional shares of the same class of the Fund
at net asset value on the reinvestment date, except that, upon written request
to the Shareholder Service Agent, a shareholder may select one of the following
options:

1.   To  receive  income  and  short-term  capital  gain  dividends  in cash and
     long-term  capital gain  dividends in shares of the same class at net asset
     value; or

2.   To receive income and capital gain dividends in cash.

Dividends will be reinvested in Shares of the same class of the Fund unless
shareholders indicate in writing that they wish to receive them in cash or in
shares of other DWS Funds with multiple classes of shares or DWS Funds as
provided in the Prospectuses. To use this privilege of investing dividends of
the Fund in shares of another DWS Fund, shareholders must maintain a minimum
account value of $1,000 in the Fund distributing the dividends. The Fund will
reinvest dividend checks (and future dividends) in shares of that same Fund and
class if checks are returned as undeliverable. Dividends and other distributions
of the Fund in the aggregate amount of $10 or less are automatically reinvested
in shares of the same Fund and class unless the shareholder requests in writing
that a check be issued for that particular distribution.

If an investment is in the form of a retirement plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of that Fund and
confirmations will be mailed to each shareholder. If a shareholder has chosen to
receive cash, a check will be sent. Distributions of investment company taxable
income and net realized capital gains are taxable, whether made in shares or
cash.

Each distribution is accompanied by a brief explanation of the form and
character of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year the Fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.

The Fund may at any time vary its foregoing dividend practices 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 its Board determines appropriate under the then
current circumstances. In particular, and without limiting the foregoing, the
Fund may make additional distributions of net investment income or capital gain
net income in order to satisfy the minimum distribution requirements contained
in the Code.

                                      TAXES

The following is intended to be a general summary of certain federal income tax
consequences of investing in the Fund. It is not intended as a complete
discussion of all such consequences, nor does it purport to deal with all
categories of investors. Investors are therefore advised to consult with their
tax advisors before making an investment in the Fund. The summary is based on
the laws in effect on the date of this statement of additional information and
existing judicial and administrative interpretations thereof, all of which are
subject to change, possibly with retroactive effect.

Federal Taxation.  The Fund has elected to be treated as a regulated  investment
company  under  Subchapter  M of the Code and has  qualified  as such  since its
inception.  The Fund  intends to continue to so qualify in each  taxable year as
required  under the Code in order to avoid payment of federal  income tax at the
fund level. In order to qualify as a regulated investment company, the Fund must
meet   certain   requirements   regarding   the  source  of  its   income,   the
diversification  of its assets and the distribution of its income. The Fund:

(a)  must  derive at least 90% of its gross  income  from  dividends,  interest,
     payments with respect to certain  securities loans, and gains from the sale
     of stock, securities and foreign currencies, or other income (including but
     not limited to gains from options,  futures,  or forward contracts) derived
     with respect to its business of  investing  in such stock,  securities,  or
     currencies;  and net income derived from  interests in "qualified  publicly
     traded partnerships" (i.e.,  partnerships that are traded on an established
     securities   market  or  tradable  on  a  secondary   market,   other  than
     partnerships  that  derive 90% of their  income from  interest,  dividends,
     capital gains, and other traditionally permitted mutual fund income);

(b)  must  diversify  its  holdings so that,  at the end of each  quarter of its
     taxable year,  (i) at least 50% of the market value of the Fund's assets is
     represented by cash and cash items, U.S. government securities,  securities
     of other regulated  investment  companies,  and other securities limited in
     respect of any one issuer of such securities to a value not greater than 5%
     of the value of the  Fund's  total  assets  and to not more than 10% of the
     outstanding voting securities of such issuer, and (ii) not more than 25% of
     the value of its assets is invested in the securities  (other than those of
     the U.S.  Government or other  regulated  investment  companies) of any one
     issuer of two or more  issuers of which 20% or more of the voting  stock is
     owned by the Fund and which are  engaged in the same,  similar,  or related
     trades or businesses or in the securities of one or more qualified publicly
     traded partnerships; and

(c)  is required to distribute to its  shareholders  at least 90% of its taxable
     and  tax-exempt  net  investment   income  (including  the  excess  of  net
     short-term capital gain over net long-term capital losses) and generally is
     not  subject  to  federal  income  tax to the  extent  that it  distributes
     annually such net  investment  income and net realized  capital gain in the
     manner required under the Code.

Although in general the passive loss rules of the Code do not apply to regulated
investment companies, such rules do apply to a regulated investment company with
respect to items attributable to an interest in a qualified publicly traded
partnership. Fund investments in partnerships, including in qualified publicly
traded partnerships, may result in the Fund's being subject to state, local or
foreign income, franchise or withholding tax liabilities.

If for any taxable year the Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders), and all distributions from
earnings and profits, including any distributions of net tax-exempt income and
net long-term capital gains, would be taxable to shareholders as ordinary
income. Such distributions would be eligible (i) to be treated as "qualified
dividend income," in the case of individual and other noncorporate shareholders,
subject to reduced rates of federal income taxation for taxable years beginning
before January 1, 2011 and (ii) for the 70% dividends received deduction in the
case of corporate shareholders. In addition, the Fund could be required to
recognize unrealized gains, pay substantial taxes and interest and make
substantial distributions before requalifying as a regulated investment company
that is accorded special tax treatment.

The Fund is subject to a 4% nondeductible excise tax on amounts required to be
but not distributed under a prescribed formula. The formula requires payment to
shareholders during a calendar year of distributions representing at least 98%
of the Fund's ordinary income for the calendar year and at least 98% of the
excess of its capital gains over capital losses realized during the one-year
period ending October 31 (in most cases) of such year as well as amounts that
were neither distributed nor taxed to the Fund during any prior calendar year.
Although the Fund's distribution policies should enable it to avoid excise tax
liability, the Fund may retain (and be subject to income or excise tax on) a
portion of its capital gains or other income if it appears to be in the interest
of the Fund.

Dividends or other income (including, in some cases, capital gains) received by
the Fund from investments in foreign securities may be subject to withholding
and other taxes imposed by foreign countries. Tax conventions between certain
countries and the United States may reduce or eliminate such taxes in some
cases. Foreign taxes paid by the Fund will reduce the return from the Fund's
investments.

If the Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies" ("PFICs"), it may be subject to US
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on the Fund in respect of deferred taxes arising from
such distributions or gains.

If the Fund were to invest in a PFIC and elect to treat the PFIC as a "qualified
electing fund" under the Code, in lieu of the foregoing requirements, the Fund
might be required to include in income each year a portion of the ordinary
earnings and net capital gains of the qualified electing fund, even if not
distributed to the Fund, and such amounts would be subject to the 90% and excise
tax distribution requirements described above. In order to make this election,
the Fund would be required to obtain certain annual information from the PFICs
in which it invests, which may be difficult or impossible to obtain.

Alternatively, the Fund may make a mark-to-market election that will result in
the Fund being treated as if it had sold and repurchased its PFIC stock at the
end of each year. In such case, the Fund would report any such gains as ordinary
income and would deduct any such losses as ordinary losses to the extent of
previously recognized gains. The election must be made separately for each PFIC
owned by the Fund and, once made, would be effective for all subsequent taxable
years, unless revoked with the consent of the Internal Revenue Service (the
"IRS"). By making the election, the Fund could potentially ameliorate the
adverse tax consequences with respect to its ownership of shares in a PFIC, but
in any particular year may be required to recognize income in excess of the
distributions it receives from PFICs and its proceeds from dispositions of PFIC
stock. The Fund may have to distribute this "phantom" income and gain to satisfy
the 90% distribution requirement and to avoid imposition of the 4% excise tax.

The Fund will make the appropriate tax elections, if possible, and take any
additional steps that are necessary to mitigate the effect of these rules.

Taxes on distributions of capital gains are determined by how long the Fund
owned the investments that generated them, rather than how long a shareholder
has owned his or her shares. Distributions of net capital gains that are
properly designated by the Fund as capital gain dividends will be taxable as
long-term capital gains. "Net capital gains" for this purpose are the Fund's (x)
net long-term capital gains for the taxable year less (y) the sum of the Fund's
(i) net short-term capital losses for the taxable year and (ii) available
capital loss carryforwards. Distributions of net short-term capital gains, which
are gains attributable to the sales of investments that the Fund owned for one
year or less, will be taxable as ordinary income. If the Fund retains for
investment an amount equal to all or a portion of its net capital gains, it will
be subject to tax at the maximum corporate tax rate (currently 35%) on the
amount retained. In that event, the Fund will designate such retained amounts as
undistributed capital gains in a notice to its shareholders who (a) will be
required to include in income for federal income tax purposes, as long-term
capital gains, their proportionate shares of the undistributed amount, (b) will
be entitled to credit their proportionate shares of the 35% tax paid by the fund
on the undistributed amount against their federal income tax liabilities, if
any, and to claim refunds to the extent their credits exceed their liabilities,
if any, and (c) will be entitled to increase their tax basis, for federal income
tax purposes, in their shares by an amount equal to 65% of the amount of
undistributed capital gains included in the shareholder's income. Organizations
or persons not subject to federal income tax on such capital gains will be
entitled to a refund of their pro rata share of such taxes paid by the fund upon
filing appropriate returns or claims for refund with the IRS.

Dividends and other distributions by the Fund are generally treated under the
Code as received by the shareholders at the time the dividend or distribution is
made. However, any dividend or distribution declared by the Fund in October,
November or December of any calendar year and payable to shareholders of record
on a specified date in such a month shall be deemed to have been received by
each shareholder on December 31 of such calendar year and to have been paid by
the Fund not later than such December 31, provided such dividend is actually
paid by the Fund during January of the following calendar year.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by the Fund before a shareholder's investment (and thus were
included in the price the shareholder paid). Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares through
the reinvestment privilege. A shareholder whose distributions are reinvested in
shares will be treated as having received a dividend equal to the fair market
value of the new shares issued to the shareholder. Any gain resulting from the
sale or exchange of Fund shares generally will be taxable as capital gains. Any
loss realized on a sale or exchange will be disallowed to the extent the shares
disposed of are replaced, including replacement through the reinvesting of
dividends and capital gains distributions in the Fund, within a 61-day period
beginning 30 days before and ending 30 days after the disposition of the shares.
In such a case, the basis of the shares acquired will be increased to reflect
the disallowed loss.

Long-term capital gain rates applicable to individuals have temporarily been
reduced -- in general, to 15% with a lower 0% rate applying to taxpayers in the
10% and 15% ordinary income rate brackets -- for taxable years beginning before
January 1, 2011.

For federal income tax purposes, distributions of investment income are
generally taxable as ordinary income. For taxable years beginning on or before
December 31, 2010, distributions of investment income designated by the Fund as
derived from "qualified dividend income" will be taxed in the hands of
individuals at the rates applicable to long-term capital gain, provided holding
period and other requirements are met at both the shareholder and Fund level.

Qualified dividend income does not include interest from fixed-income
securities. In order for some portion of the dividends received by a Fund
shareholder to be qualified dividend income, the Fund must meet holding period
and other requirements with respect to some portion of the dividend-paying
stocks in its portfolio and the shareholder must meet holding period and other
requirements with respect to the Fund's shares. A dividend will not be treated
as qualified dividend income (at either the Fund or shareholder level) (1) if
the dividend is received with respect to any share of stock held for fewer than
61 days during the 121-day period beginning on the date which is 60 days before
the date on which such share becomes ex-dividend with respect to such dividend
(or, in the case of certain preferred stock, 91 days during the 181-day period
beginning 90 days before such date), (2) to the extent that the recipient is
under an obligation (whether pursuant to a short sale or otherwise) to make
related payments with respect to positions in substantially similar or related
property, or (3) if the recipient elects to have the dividend income treated as
investment income for purposes of the limitation on deductibility of investment
interest. In order for a dividend paid by a foreign corporation to constitute
"qualified dividend income," the foreign corporation must (1) be eligible for
the benefits of a comprehensive income tax treaty with the United States (unless
the stock on which the dividend is paid is readily tradable on an established
securities market in the United States) and (2) not be treated as a PFIC. Also,
dividends received by the Fund from a real estate investment trust or another
regulated investment company generally are qualified dividend income only to the
extent the dividend distributions are made out of qualified dividend income
received by such real estate investment trust or other regulated investment
company.

In general, distributions of investment income designated by the Fund as derived
from qualified dividend income will be treated as qualified dividend income by a
shareholder taxed as an individual provided the shareholder meets the holding
period and other requirements described above with respect to the Fund's shares.
If the aggregate qualified dividends received by the Fund during any taxable
year are 95% or more of its gross income (excluding net long-term capital gain
over net short-term capital loss), then 100% of the Fund's dividends (other than
dividends properly designated as capital gain dividends) will be eligible to be
treated as qualified dividend income. If the aggregate qualified dividends
received are less than 95% of its gross income, then the portion of regular
dividends paid by the Fund to an individual in a particular taxable year (other
than dividends properly designated as capital gain dividends) will be eligible
to be treated as qualified dividend income. For this purpose, the only gain
included in the term "gross income" is the excess of net short-term capital gain
over net long-term capital loss.

The sale, exchange or redemption of Fund shares may give rise to a gain or loss.
In general, any gain or loss realized upon a taxable disposition of shares will
be treated as long-term capital gain or loss if the shares have been held for
more than one year. Otherwise, the gain or loss on the taxable disposition of
Fund shares will be treated as short-term capital gain or loss.

Dividends from domestic corporations may comprise a substantial part of the
Fund's gross income. If any such dividends constitute a portion of the Fund's
gross income, a portion of the income distributions of the Fund may be eligible
for the 70% deduction for dividends received by corporations. Shareholders will
be informed of the portion of dividends which so qualify. The dividends-received
deduction is reduced to the extent the shares of the Fund with respect to which
the dividends are received are treated as debt-financed under federal income tax
law and is eliminated if either those shares or the shares of the Fund are
deemed to have been held by the Fund or the shareholder, as the case may be, for
less than 46 days during the 91-day period beginning 45 days before the shares
become ex-dividend.

Any loss realized upon the redemption of shares held for six months or less at
the time of redemption will be treated as a long-term capital loss to the extent
of any amounts treated as distributions of long-term capital gain during such
six-month period. Furthermore, any loss from the sale or redemption of shares
held six months or less generally will be disallowed to the extent that
tax-exempt interest dividends were paid on such shares.

The Fund's use of options, futures contracts and forward contracts (to the
extent permitted) will be subject to special tax rules (including
mark-to-market, constructive sale, straddle, wash sale, short sale and other
rules), the effect of which may be to accelerate income, defer losses, cause
adjustments in the holding periods of portfolio securities, convert capital
gains into ordinary income and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions to investors.

The Fund's investment in so-called "section 1256 contracts," such as regulated
futures contracts, most foreign currency forward contracts traded in the
interbank market and options on most stock indices, are subject to special tax
rules. All section 1256 contracts held by the Fund at the end of its taxable
year are required to be marked to their market value, and any unrealized gain or
loss on those positions will be included in the Fund's income as if each
position had been sold for its fair market value at the end of the taxable year.
The resulting gain or loss will be combined with any gain or loss realized by
the Fund from positions in section 1256 contracts closed during the taxable
year. Provided such positions were held as capital assets and were not part of a
"hedging transaction" nor part of a "straddle," 60% of the resulting net gain or
loss will be treated as long-term capital gain or loss, and 40% of such net gain
or loss will be treated as short-term capital gain or loss, regardless of the
period of time the positions were actually held by the Fund.

The Fund may be required to treat amounts as taxable income or gain, subject to
the distribution requirements referred to above, even though no corresponding
amounts of cash are received concurrently, as a result of (1) mark-to-market or
constructive sale rules or rules applicable to passive foreign investment
companies or partnerships or trusts in which the Fund invests or to certain
options, futures or forward contracts, or "appreciated financial positions" or
(2) the inability to obtain cash distributions or other amounts due to currency
controls or restrictions on repatriation imposed by a foreign country with
respect to the Fund's investments (including through depositary receipts) in
issuers in such country or (3) tax rules applicable to debt obligations acquired
with "original issue discount," including zero-coupon or deferred payment bonds
and pay-in-kind debt obligations, or to market discount if an election is made
with respect to such market discount. The Fund may therefore be required to
obtain cash to be used to satisfy these distribution requirements by selling
securities at times that it might not otherwise be desirable to do so or
borrowing the necessary cash, thereby incurring interest expenses. In certain
situations, the Fund may, for a taxable year, defer all or a portion of its
capital losses and currency losses realized after October until the next taxable
year in computing its investment company taxable income and net capital gain,
which will defer the recognition of such realized losses. Such deferrals and
other rules regarding gains and losses realized after October may affect the tax
character of shareholder distributions.

In general, gain or loss on a short sale is recognized when the Fund closes the
sale by delivering the borrowed property to the lender, not when the borrowed
property is sold. Gain or loss from a short sale is generally considered as
capital gain or loss to the extent that the property used to close the short
sale constitutes a capital asset in the Fund's hands. Except with respect to
certain situations where the property used by the Fund to close a short sale has
a long-term holding period on the date of the short sale, special rules would
generally treat the gains on short sales as short-term capital gains. These
rules may also terminate the running of the holding period of "substantially
identical property" held by the Fund. Moreover, a loss on a short sale will be
treated as a long-term capital loss if, on the date of the short sale,
"substantially identical property" has been held by the Fund for more than one
year. In general, the Fund will not be permitted to deduct payments made to
reimburse the lender of securities for dividends paid on borrowed stock if the
short sale is closed on or before the 45th day after the short sale is entered
into.

Under Section 988 of the Code, gains or losses attributable to fluctuations in
exchange rates between the time the Fund accrues income or receivables or
expenses or other liabilities denominated in a foreign currency and the time the
Fund actually collects such income or pays such liabilities are generally
treated as ordinary income or ordinary loss. In general, gains (and losses)
realized on debt instruments will be treated as Section 988 gain (or loss) to
the extent attributable to changes in exchange rates between the US dollar and
the currencies in which the instruments are denominated. Similarly, gains or
losses on foreign currency, foreign currency forward contracts and certain
foreign currency options or futures contracts, to the extent attributable to
fluctuations in exchange rates between the acquisition and disposition dates,
are also treated as ordinary income or loss unless the Fund were to elect
otherwise.

The Fund's investment in zero coupon bonds and other debt obligations having
original issue discount may cause the Fund to recognize taxable income in excess
of any cash received from the investment.

Under current law, the Fund serves to block unrelated business taxable income
("UBTI") from being realized by its tax-exempt shareholders. Notwithstanding the
foregoing, a tax-exempt shareholder could realize UBTI by virtue of, inter alia,
its investment in the Fund if shares in the Fund constitute debt-financed
property in the hands of the tax-exempt shareholder within the meaning of Code
Section 514(b). If a charitable remainder trust (as defined in Code Section 664)
realizes any UBTI for a taxable year, it will be subject to an excise tax on
100% of its UBTI.

Certain types of income received by the Fund from real estate investment trusts
("REITs"), real estate mortgage investment conduits ("REMICs"), taxable mortgage
pools or other investments may cause the Fund to designate some or all of its
distributions as "excess inclusion income." To fund shareholders such excess
inclusion income may (1) constitute taxable income, as UBTI for those
shareholders who would otherwise be tax-exempt such as individual retirement
accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable
entities; (2) as UBTI cause a charitable remainder trust to become subject to an
excise tax of 100% of its UBTI; (3) not be offset against net operating losses
by otherwise allowable deductions for tax purposes; (4) not be eligible for
reduced US withholding for non-US shareholders even from tax treaty countries;
and (5) cause the Fund to be subject to tax if certain "disqualified
organizations" as defined by the Code are fund shareholders.

Under the backup withholding provisions of the Code, redemption proceeds as well
as distributions may be subject to federal income tax withholding for certain
shareholders, including those who fail to furnish the Fund with their taxpayer
identification numbers and certifications as to their tax status.

Capital gains distributions may be reduced if fund capital loss carryforwards
are available. Any capital loss carryforwards to which the Fund is entitled are
disclosed in the Fund's annual and semi-annual reports to shareholders.

All distributions by the Fund result in a reduction in the net asset value of
the Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time includes the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

Shareholders will receive, if appropriate, various written notices after the
close of the Fund's taxable year regarding the federal income tax status of
certain dividends, distributions and deemed distributions that were paid (or
that are treated as having been paid) by the Fund to its shareholders during the
preceding taxable year.

Special tax rules apply to investments through defined contribution plans and
other tax-qualified plans. Shareholders should consult their tax advisers to
determine the suitability of shares of the Fund as an investment through such
plans and the precise effect of an investment on their particular tax situation.

If a shareholder recognizes a loss with respect to the Fund's shares of $2
million or more for an individual shareholder or $10 million or more for a
corporate shareholder, the shareholder must file with the IRS a disclosure
statement on Form 8886. Direct shareholders of portfolio securities are in many
cases excepted from this reporting requirement, but under current guidance,
shareholders of a regulated investment company are not excepted. The fact that a
loss is reportable under these regulations does not affect the legal
determination of whether the taxpayer's treatment of the loss is proper.
Shareholders should consult their tax advisors to determine the applicability of
these regulations in light of their individual circumstances.

State and Local Taxes.

Shareholders   of  the  Fund  may  be  subject  to  state  and  local  taxes  on
distributions  received from the Fund and on  redemptions  of the Fund's shares.
Rules of state and local  taxation of dividend and capital  gains  distributions
from regulated  investment  companies often differ from rules for federal income
taxation  described  above.  In  particular,  dividends or portions of dividends
attributable to US government  and/or federal agency debt obligations if any are
held by the  regulated  investment  company  may not be taxable at the state and
local level  depending upon state and local tax  requirements.  You are urged to
consult your tax advisor as to the consequences  and  applicability of these and
other state and local tax rules affecting an investment in the Fund.

Taxation of Non-US Shareholders. Dividends paid by the Fund to non-US
shareholders are generally subject to withholding tax at a 30% rate or a reduced
rate specified by an applicable income tax treaty to the extent derived from
investment income and short-term capital gains. In order to obtain a reduced
rate of withholding, a non-US shareholder will be required to provide an IRS
Form W-8BEN certifying its entitlement to benefits under a treaty. The
withholding tax does not apply to regular dividends paid to a non-US shareholder
who provides a Form W-8ECI, certifying that the dividends are effectively
connected with the non-US shareholder's conduct of a trade or business within
the United States. Instead, the effectively connected dividends will be subject
to regular US income tax as if the non-US shareholder were a US shareholder. A
non-US corporation receiving effectively connected dividends may also be subject
to additional "branch profits tax" imposed at a rate of 30% (or lower treaty
rate). A non-US shareholder who fails to provide an IRS Form W-8BEN or other
applicable form may be subject to backup withholding at the appropriate rate.

In general, United States federal withholding tax will not apply to any gain or
income realized by a non-US shareholder in respect of any distributions of net
long-term capital gains over net short-term capital losses, exempt interest
dividends, or upon the sale or other disposition of shares of the Fund.

A distribution from the Fund to foreign shareholders who have held more than 5%
of the Fund at any time during the one-year period ending on the date of
distribution is treated as real property gain subject to 35% withholding tax and
treated as income effectively connected to a US trade or business with certain
tax filing requirements applicable, if such distribution is attributable to a
distribution of real property gain received by the Fund from a REIT and if 50%
or more of the value of the Fund's assets are invested in REITs and other US
real property holding corporations.

Shares of the Fund held by a non-US shareholder at death will be considered
situated in the United States and subject to the US estate tax.

The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may be different from those described herein. Foreign
shareholders should consult their own tax advisers with respect to the
particular tax consequences to them of an investment in the Fund, including the
applicability of foreign taxes.

The foregoing is only a summary of certain material US federal income tax
consequences affecting the fund and its shareholders. Current and prospective
shareholders are advised to consult their own tax advisors with respect to the
particular tax consequences to them of an investment in the Fund.

                                 NET ASSET VALUE

The net asset value of shares of the Fund 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 Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of shares of that class outstanding. The per share net asset value may be lower
for certain classes of the Fund because of higher expenses borne by these
classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or over-the-counter ("OTC") market as of the Value Time.
Lacking any sales, the security is valued at the calculated mean between the
most recent bid quotation and the most recent asked quotation (the "Calculated
Mean") on such exchange or OTC market as of the Value Time. If it is not
possible to determine the Calculated Mean, the security is valued at the most
recent bid quotation on such exchange or OTC market as of the Value Time. In the
case of certain foreign exchanges or OTC markets, the closing price reported by
the exchange or OTC market (which may sometimes be referred to as the "official
close" or the "official closing price" or other similar term) will be considered
the most recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and the asked prices), if available, and otherwise at the mean of the most
recent bid and asked quotations or evaluated price obtained from a
broker-dealer. Other debt securities not addressed above are valued at prices
supplied by an approved pricing agent, if available, and otherwise at the most
recent bid quotation or evaluated price, as applicable, obtained from one or
more broker-dealers. If it is not possible to value a particular debt security
pursuant to the above methods, the security is valued on the basis of factors
including (but not limited to) maturity, coupon, creditworthiness, currency
denomination, and the movement of the market in which the security is normally
traded.

An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available, on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the New York Stock Exchange. For stock index futures contracts which trade on
the Chicago Mercantile Exchange, closing settlement prices are normally
available at approximately 4:20 Eastern time. If no settlement price is
available, the last traded price on such exchange will be used.

If market quotations for a portfolio asset are not readily available or the
value of a portfolio 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 Fund'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 Fund 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 Fund's Board and overseen primarily by the Fund's
Pricing Committee.

                             DIRECTORS AND OFFICERS

The following table presents certain information regarding the Board Members of
the Corporation. Each Board Member's year of birth is set forth in parentheses
after his or her name. Unless otherwise noted, (i) each Board Member has engaged
in the principal occupation(s) noted in the table for at least the most recent
five years, although not necessarily in the same capacity, and (ii) the address
of each Board Member that is not an "interested person" (as defined in the 1940
Act) of the Corporation 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 Corporation. Because the Fund does
not hold an annual meeting of shareholders, each Board Member will hold office
for an indeterminate period. The Board Members may also serve in similar
capacities with other funds in the DWS fund complex.

Independent Board Members

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Corporation and         Business Experience and                                        in DWS Fund
 Length of Time Served(1)         Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll (1946)        President, Driscoll Associates (consulting firm); Executive            133
Chairperson since 2004,(2) and    Fellow, Center for Business Ethics, Bentley College;
Board Member since 1987           formerly: Partner, Palmer & Dodge (1988-1990); Vice President
                                  of Corporate Affairs and General Counsel, Filene's
                                  (1978-1988); Directorships: Trustee of 8 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 College;
                                  Trustee, Southwest Florida Community Foundation (charitable
                                  organization); former Directorships: Investment Company
                                  Institute (audit, executive, nominating committees) and
                                  Independent Directors Council (governance, executive
                                  committees)
--------------------------------------------------------------------------------------------------------------------
Paul K. Freeman                   Consultant, World Bank/Inter-American Development Bank;                132
(1950)                            formerly: Project Leader, International Institute for Applied
Vice Chairperson since 2008, 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             133
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:               133
 Board Member since               Association of Public Television Stations; Becton Dickinson
 1990                             and Company(3) (medical technology company); Belo
                                  Corporation(3) (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
--------------------------------------------------------------------------------------------------------------------
Keith R. Fox (1954)               Managing General Partner, Exeter Capital Partners (a series           133
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           133
(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,         133
(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                     133
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             133
(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(3) (January 2007-June 2007)
--------------------------------------------------------------------------------------------------------------------
William N. Searcy, Jr.            Private investor since October 2003; Trustee of 8 open-end            133
(1946)                            mutual funds managed by Sun Capital Advisers, Inc. (since
Board Member since                October 1998); formerly: Pension & Savings Trust Officer,
1993                              Sprint Corporation(3) (telecommunications) (November
                                  1989-September 2003)
--------------------------------------------------------------------------------------------------------------------
Jean Gleason Stromberg            Retired; formerly: Consultant (1997-2001); Director, US                133
(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          136
Board Member since 1999           firm) (1983 to present).
--------------------------------------------------------------------------------------------------------------------

Interested Board Member

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position                                                                   Number of Funds
 with the Corporation and         Business Experience and                                        in DWS Fund
 Length of Time Served(1)         Directorships During the Past 5 Years                          Complex Overseen
--------------------------------------------------------------------------------------------------------------------
 Axel Schwarzer(4)                Managing Director(5), Deutsche Asset Management; Head of              133
 (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(6)

--------------------------------------------------------------------------------------------------------------------
 Name, Year of Birth, Position
 with the Corporation and         Business Experience and
 Length of Time Served(7)         Directorships During the Past 5 Years
--------------------------------------------------------------------------------------------------------------------
 Michael G. Clark(8) (1965)       Managing Director(5), 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(9) (1962)          Director(5), Deutsche Asset Management
 Vice President and Secretary,
 1999-present
--------------------------------------------------------------------------------------------------------------------
 Paul H. Schubert(8) (1963)       Managing Director(5), 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(10) (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)
--------------------------------------------------------------------------------------------------------------------
 Elisa D. Metzger(10)  (1962)     Director(5), Deutsche Asset Management (since September 2005); formerly:
 Assistant Secretary,             Counsel, Morrison and Foerster LLP (1999-2005)
 2005-present
--------------------------------------------------------------------------------------------------------------------
 Caroline Pearson(9) (1962)       Managing Director(5), Deutsche Asset Management
 Assistant Secretary,
 1997-present
--------------------------------------------------------------------------------------------------------------------
 Paul Antosca(9)                  Director(5), 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 (9)                   Director(5), Deutsche Asset Management (since 2007); formerly: Vice President,
 (1967)                           State Street Corporation (2002-2007)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Kathleen Sullivan D'Eramo(9)     Director(5), Deutsche Asset Management
 (1957)
 Assistant Treasurer,
 2003-present
--------------------------------------------------------------------------------------------------------------------
 Diane Kenneally(9)               Director(5), Deutsche Asset Management
 (1966)
 Assistant Treasurer,
 2007-present
--------------------------------------------------------------------------------------------------------------------
 Jason Vazquez(10) (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(10) (1962)          Managing Director(5), 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(10)       Director(5), 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)
--------------------------------------------------------------------------------------------------------------------

(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)  Represents the year in which Ms. Driscoll was first  appointed  Chairperson
     of certain DWS funds.

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

(4)  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 Fund.

(5)  Executive title, not a board directorship.

(6)  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 Fund.

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

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

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

(10) 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
 Caroline Pearson:                         Secretary

Board Members' Responsibilities. The officers of the Corporation 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 Fund and to
provide oversight of the management of the Fund.

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 Fund's accounting and
financial reporting policies and procedures, (3) the Fund'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 Fund. It also approves and recommends
to the Board the appointment, retention or termination of the independent
registered public accounting firm for the Fund, reviews the scope of audit and
internal controls, considers and reports to the Board on matters relating to the
Fund'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 2007, the Audit Committee of the Fund's Board held nine (9)
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 2007, the Nominating/Corporate Governance Committee of the Fund's
Board performed similar functions and held three (3) meetings.

Contract Committee: The Contract Committee, which consists entirely of
Independent Board Members, reviews at least annually, (a) the Fund's financial
arrangements with DIMA and its affiliates, and (b) the Fund'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.

Equity Oversight Committee: The Equity Oversight Committee reviews the
investment operations of those Funds 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 2007, the Equity Oversight
Committee of the Fund's Board performed similar functions and held six (6)
meetings.

Fixed-Income and Quant Oversight Committee: The Fixed-Income and Quant Oversight
Committee reviews the investment operations of those Funds 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, Paul K.
Freeman, Kenneth C. Froewiss and Robert H. Wadsworth. During the calendar year
2007, the Fixed-Income Oversight Committee of the Fund's Board performed similar
functions and held six (6) meetings.

Marketing and Shareholder Services Committee: The Marketing and Shareholder
Services Committee reviews the Fund'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), Paul K. Freeman, Rebecca W. Rimel, Jean Gleason Stromberg
and Robert H. Wadsworth. During the calendar year 2007, the
Marketing/Distribution/Shareholder Service Committee of the Fund's Board
performed similar functions and held seven (7) meetings.

The Operations Committee: The Operations Committee reviews the administrative
operations, legal affairs and general compliance matters of the Fund. The
Operations Committee reviews administrative matters related to the operations of
the Fund, policies and procedures relating to portfolio transactions, custody
arrangements, fidelity bond and insurance arrangements, valuation of Fund assets
and securities and such other tasks as the full Board deems necessary or
appropriate. The Operations Committee also oversees the valuation of the Fund's
securities and other assets and determines, as needed, the fair value of Fund
securities or other assets under certain circumstances as described in the
Fund'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 Paul K. Freeman (Chair), Dawn-Marie Driscoll (Vice Chair), John W.
Ballantine, 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), Paul K. Freeman (Alternate),
Rebecca W. Rimel (Alternate) and William N. Searcy, Jr. (Alternate). During the
calendar year 2007, the Expenses/Operations Committee and Valuation Committee
performed similar functions and each held nine (9) meetings and six (6)
meetings, respectively.

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 Fund
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 Fund 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 Fund,
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
Fund. The following tables show compensation from the Fund and aggregate
compensation from all of the funds in the DWS fund complex received by each
Independent Board Member during the calendar year 2007. Mr. Schwarzer is an
interested person of the Fund and received no compensation from the Fund or any
fund in the DWS fund complex during the relevant periods.

                                     Aggregate Compensation           Total Compensation
                                         from DWS Value                 from Fund and
  Name of Board Member                    Builder Fund               DWS Fund Complex(1)
  --------------------                    ------------               -------------------

  John W. Ballantine                               $0                      $215,000
  Henry P. Becton, Jr.(2)                        $952                      $200,000
  Dawn-Marie Driscoll(2)(3)                    $1,192                      $253,000
  Keith R. Fox(2)                                $958                      $203,000
  Paul K. Freeman(4)                               $0                      $265,000
  Kenneth C. Froewiss(2)                         $944                      $200,000
  Richard J. Herring(2)                          $920                      $195,000
  William McClayton(5)                             $0                      $205,000
  Rebecca W. Rimel(2)                            $897                      $194,000
  William N. Searcy, Jr.(2)                      $944                      $200,000
  Jean Gleason Stromberg(2)                      $893                      $189,000
  Robert H. Wadsworth                              $0                      $245,250

(1)  The DWS fund complex is composed of 138 funds as of December 31, 2007.

(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 Fund's direct shareholders (i.e., those shareholders
     who did not purchase shares through financial intermediaries). Such amounts
     totaled $1,000 for Mr. Becton, $1,000 for Ms. Driscoll, $1,000 for Mr. Fox,
     $1,000 for Mr.  Froewiss,  $1,000 for Dr.  Herring,  $5,000 for Ms.  Rimel,
     $1,000 for Mr. Searcy and $1,000 for Ms. Stromberg. These meeting fees were
     borne by the Advisor.

(3)  Includes  $50,000 in annual  retainer  fees  received  by Ms.  Driscoll  as
     Chairperson of certain DWS funds.

(4)  Includes $25,000 paid to Dr. Freeman for numerous special meetings of an ad
     hoc  committee  in  connection  with board  consolidation  initiatives  and
     $50,000 in annual  retainer fees received by Dr.  Freeman as Chairperson of
     certain DWS funds.

(5)  Does not include $15,000 to be paid to Mr.  McClayton in calendar year 2008
     for numerous  special meetings of an ad hoc committee of the former Chicago
     Board in connection with board consolidation initiatives.

Dr. Freeman, prior to his service as Independent Board Member, served as a board
member of certain funds in the Deutsche Bank complex ("DB Funds"). In connection
with his  resignation  and the resignation of certain other board members of the
DB  Funds  on  July  30,  2002  (the  "Effective  Date"),  which  was  part of a
restructuring of the boards overseeing the DB Funds,  Deutsche Asset Management,
Inc.  ("DAMI")  agreed to  recommend,  and, if necessary  obtain,  directors and
officers  ("D&O")  liability  insurance  coverage  for the prior board  members,
including Dr. Freeman, that is at least as equivalent in scope and amount to the
D&O  coverage  provided  to the prior  board  members  for the  six-year  period
following  the Effective  Date. In the event that D&O insurance  coverage is not
available in the commercial marketplace on commercially  reasonable terms from a
conventional   third  party   insurer,   DeAM  reserved  the  right  to  provide
substantially  equivalent  protection  in the form of an  indemnity or financial
guarantee  from an  affiliate  of DeAM.  The D&O  policy in effect  prior to the
Effective Date provided aggregate coverage of $25,000,000, subject to a $250,000
per claim deductible.

Board Member Ownership in the Fund

The following table shows the dollar range of equity securities beneficially
owned by each Board Member in the Fund and DWS fund complex as of June 30, 2008.

                                               Dollar Range of                Aggregate Dollar Range of
                                             Beneficial Ownership        Ownership in all Funds Overseen by
                                                 in DWS Value                       Board Member
Board Member                                     Builder Fund               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                                  $1-$10,000                           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 Fund, 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, 2007. 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 Fund 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 Fund (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

Securities Beneficially Owned

As of 07/9/2008, the Board Members and officers of the Corporation owned, as a
group, less than 1% of the outstanding shares of the Fund.

To the best of the Fund's knowledge, as of 07/09/2008, no person owned of record
or beneficially 5% or more of any class of the Fund's outstanding shares, except
as noted below.

DWS Value Builder Fund

Name and Address of Investor Ownership                          Shares                      % of Total Shares
--------------------------------------                          ------                      -----------------

CITIGROUP GLOBAL MARKETS INC                                  660,386.24                    6.13% of Class A
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

SEI PRIVATE TRUST CO                                          272,357.92              21.02% of Institutional Class
C/O M&T BANK ID 337
ATTN MUTUAL FUNDS
OAKS PA  19456

H BARRY LEVINE TTEE                                           260,982.16              20.14% of Institutional Class
W B DONER & CO CAPITAL ACCUMULATION
PLAN U/A/D 11/27/2000
SOUTHFIELD MI  48075-1067

PERSHING LLC                                                  147,897.85              11.41% of Institutional Class
JERSEY CITY NJ  07303-2052

DWS TRUST COMPANY CUST                                        121,329.96              9.36% of Institutional Class
FOR THE IRA ROLLOVER OF
JOHN T STOUGH JR
WASHINGTON DC  20004

PERSHING LLC                                                  118,785.55              9.17% of Institutional Class
JERSEY CITY NJ  07303-2052

PERSHING LLC                                                  115,005.87              8.88% of Institutional Class
JERSEY CITY NJ  07303-2052

CITIGROUP GLOBAL MARKETS INC                                   22,845.78                    9.11% of Class B
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

CITIGROUP GLOBAL MARKETS INC                                   75,059.00                    12.29% of Class C
ATTN PETER BOOTH 7TH FL
NEW YORK NY  10001-2402

PERSHING LLC                                                   60,000.28                    9.82% of Class C
JERSEY CITY NJ  07303-2052

MORGAN STANLEY & CO.                                           31,377.52                    5.14% of Class C
HARBORSIDE FINANCIAL CENTER
PLAZA II 3RD FLOOR
JERSEY CITY NJ  07311

Agreement to Indemnify Independent Directors 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 Directors of the Affected Funds, against certain
liabilities the Independent Directors 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 Directors 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 Directors ultimately would not be entitled to indemnification or (2)
for any liability of the Independent Directors to the Funds or their
shareholders to which the Independent Director would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the Independent Director'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
Directors 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.

Code of Ethics

The Fund, the Advisor, the Subadvisor and the Fund's principal underwriter have
each adopted codes of ethics under Rule 17j-1 under the 1940 Act. Directors,
officers of the Corporation and employees of the Advisor, Subadvisor and
principal underwriter are permitted to make personal securities transactions,
including transactions in securities that may be purchased or held by the Fund,
subject to requirements and restrictions set forth in the applicable Code of
Ethics. The Advisor's and Subadvisor's Codes of Ethics contain provisions and
requirements designed to identify and address certain conflicts of interest
between personal investment activities and the interests of the Fund. Among
other things, the Advisor's and Subadvisor's Codes of Ethics prohibit certain
types of transactions absent prior approval, imposes time periods during which
personal transactions may not be made in certain securities, and require the
submission of duplicate broker confirmations and quarterly reporting of
securities transactions. Additional restrictions apply to portfolio managers,
traders, research analysts and others involved in the investment advisory
process. Exceptions to these and other provisions of the Advisor's and
Subadvisor's Codes of Ethics may be granted in particular circumstances after
review by appropriate personnel.

                                FUND ORGANIZATION

DWS Value Builder Fund, formerly Scudder Flag Investors Value Builder Fund is an
open-end diversified management investment company. The Fund currently offers
four classes of shares: Class A Shares, Class B Shares, Class C Shares and
Institutional Class.

On August 19, 2002, the Deutsche Asset Management funds were combined with the
Scudder family of funds under the Scudder Investments brand. This change did not
affect the operations of the Fund, but resulted in modifications to the
presentation of the Fund's Prospectuses, periodic reports and other publications
on behalf of the Fund. On May 7, 2001, Deutsche Asset Management changed the
name of its "Flag Investors" family of mutual funds to "Deutsche Asset
Management." This change did not affect the name, management or operations of
the Fund, but resulted in modifications to the presentation of the Fund's
Prospectuses, periodic reports and other publications on behalf of the Fund.

On February 6, 2006, the names of "Scudder Flag Investors Value Builder Fund,
Inc." and its series "Scudder Flag Investors Value Builder Fund" were changed to
"DWS Value Builder Fund, Inc." and "DWS Value Builder Fund," respectively. This
change did not affect the operations of the Fund, but resulted in modifications
to the presentation of the Fund's Prospectuses, periodic reports and other
publications on behalf of the Fund.

The Corporation was incorporated under the laws of the State of Maryland on
March 5, 1992. The Corporation filed a registration statement with the SEC
registering itself as an open-end diversified management investment company
under the 1940 Act and its shares under the Securities Act of 1933, as amended
(the "1933 Act"), and began operations on June 15, 1992. The Fund began offering
the Class B Shares on January 3, 1995, the Institutional Class Shares on
November 2, 1995, and the Class C Shares on April 8, 1998.

Important information concerning the Fund is included in the Fund's Prospectuses
which may be obtained without charge from the Fund's distributor, DWS
Investments Distributors, Inc. (the "Distributor" or "DIDI"), or from
Participating Dealers (as defined in "Distribution of Fund Shares" section) that
offer shares to prospective investors. Prospectuses may also be obtained from
shareholder servicing agents. Some of the information required to be in this
Statement of Additional Information is also included in the Fund's current
Prospectuses. To avoid unnecessary repetition, references are made to related
sections of the Prospectuses. In addition, the Prospectuses and this Statement
of Additional Information omit certain information about the Fund and its
business that is contained in the Registration Statement for the Fund and its
Shares filed with the SEC. Copies of the Registration Statement as filed,
including such omitted items, may be obtained from the SEC by paying the charges
prescribed under its rules and regulations.

                             PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to the Advisor, subject to
the Board's general oversight. The Fund has delegated proxy voting to the
Advisor with the direction that proxies should be voted consistent with the
Fund's best economic interests. The Advisor has adopted its own Proxy Voting
Policies and Procedures ("Policies"), and Proxy Voting Guidelines ("Guidelines")
for this purpose. The Policies address, among other things, conflicts of
interest that may arise between the interests of the Fund, and the interests of
the Advisor and its affiliates, including the Fund's principal underwriter. The
Guidelines set forth the Advisor's general position on various proposals, such
as:

o    Shareholder  Rights -- The Advisor  generally votes against  proposals that
     restrict shareholder rights.

o    Corporate  Governance -- The Advisor  generally votes for  confidential and
     cumulative voting and against supermajority voting requirements for charter
     and bylaw amendments. The Advisor generally votes for proposals to restrict
     a chief executive officer from serving on more than three outside boards of
     directors.  The Advisor  generally  votes against  proposals that require a
     company to appoint a Chairman who is an independent director.

o    Anti-Takeover  Matters -- The Advisor  generally  votes for proposals  that
     require shareholder  ratification of poison pills or that request boards to
     redeem poison pills, and votes against the adoption of poison pills if they
     are submitted for shareholder ratification. The Advisor generally votes for
     fair price proposals.

o    Compensation  Matters -- The Advisor  generally  votes for  executive  cash
     compensation proposals, unless they are unreasonably excessive. The Advisor
     generally  votes  against stock option plans that do not meet the Advisor's
     criteria.

o    Routine  Matters -- The Advisor  generally  votes for the  ratification  of
     auditors,  procedural  matters related to the annual meeting and changes in
     company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment companies in accordance
with the recommendations of an independent third party, except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate serves as investment advisor or principal underwriter ("affiliated
investment companies"). The Advisor votes affiliated investment company proxies
in the same proportion as the vote of the investment company's other
shareholders (sometimes called "mirror" or "echo" voting). Master fund proxies
solicited from feeder funds are voted in accordance with applicable requirements
of the 1940 Act.

Although the Guidelines set forth the Advisor's general voting positions on
various proposals, the Advisor may, consistent with the Fund's best interests,
determine under some circumstances to vote contrary to those positions.

The Guidelines on a particular issue may or may not reflect the view of
individual members of the Board or of a majority of the Board. In addition, the
Guidelines may reflect a voting position that differs from the actual practices
of the public companies within the Deutsche Bank organization or of the
investment companies for which the Advisor or an affiliate serves as investment
advisor or sponsor.

The Advisor may consider the views of a portfolio company's management in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies describe the way in which the Advisor resolves
conflicts of interest. To resolve conflicts, the advisor, under normal
circumstances, votes proxies in accordance with its Guidelines. If the Advisor
departs from the Guidelines with respect to a particular proxy or if the
Guidelines do not specifically address a certain proxy proposal, a proxy voting
committee established by the advisor will vote the proxy. Before voting any such
proxy, however, the Advisor's conflicts review committee will conduct an
investigation to determine whether any potential conflicts of interest exist in
connection with the particular proxy proposal. If the conflicts review committee
determines that the Advisor has a material conflict of interest, or certain
individuals on the proxy voting committee should be recused from participating
in a particular proxy vote, it will inform the proxy voting committee. If
notified that the Advisor has a material conflict, or fewer than three voting
members are eligible to participate in the proxy vote, typically the Advisor
will engage an independent third party to vote the proxy or follow the proxy
voting recommendations of an independent third party.

Under certain circumstances, the Advisor may not be able to vote proxies or the
Advisor may find that the expected economic costs from voting outweigh the
benefits associated with voting. For example, the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs. The Advisor
generally does not vote proxies on securities subject to share blocking
restrictions.

                              FINANCIAL STATEMENTS

The financial statements of the Fund, together with the Report of Independent
Registered Public Accounting Firm, Financial Highlights and notes to financial
statements in the Annual Report to the Shareholders of the Fund dated March 31,
2008, are incorporated herein by reference and are hereby deemed to be a part of
this Statement of Additional Information.

                             ADDITIONAL INFORMATION

The CUSIP number of DWS Value Builder Fund, Class A:                  23339J102
The CUSIP number of DWS Value Builder Fund, Class B:                  23339J201
The CUSIP number of DWS Value Builder Fund, Class C:                  23339J300
The CUSIP number of DWS Value Builder Fund, Institutional Class:      23339J409

The Fund has a fiscal year end of March 31.

You may obtain information about how the Fund 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).

The Fund's Prospectuses and this Statement of Additional Information omit
certain information contained in the Registration Statement which the Fund has
filed with the SEC under the Securities Act of 1933 and reference is hereby made
to the Registration Statement for further information with respect to the Fund
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

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:

o    Leading market positions in well established industries.

o    High rates of return on funds employed.

o    Conservative  capitalization  structure with moderate  reliance on debt and
     ample  asset  protection.

o    Broad  margins in  earnings  coverage of fixed  financial  charges and high
     internal cash generation.

o    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.

**STATEMENT OF ADDITIONAL INFORMATION****DWS BALANCED FUND**345 Park AvenueNew York, NY 10154This statement of additional information is not a prospectus, but should be read in conjunction with the Prospectus/Proxy Statement dated ________ __, 2009 for the Special Meeting of Shareholders of DWS Value Builder Fund, Inc., to be held on March 27, 2009, into which this statement of additional information is hereby incorporated by reference. Copies of the Prospectus/Proxy
        Statement may be obtained at no charge by contacting DWS Investments Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, (800) 621-1048, or from the firm from which this statement of additional information was obtained and are available along with other materials on the Securities and Exchange Commission’s Internet website (http://www.sec.gov). Unless otherwise indicated,
        capitalized terms used herein and not otherwise defined have the same meanings as are given to them in the Prospectus/Proxy Statement.Further information about DWS Balanced Fund is contained in the statement of additional information (“SAI”) dated March 1, 2008 as supplemented from time to time, for Class A, Class B, Class C and Institutional Class shares, which is attached to this statement of additional information as Appendix A. The audited financial statements and related independent
        accountant’s report for DWS Balanced Fund contained in the Annual Report for the fiscal year ended October 31, 2008 is incorporated herein by reference insofar as it relates to the Fund’s participation in the merger. No other parts of the Annual Report are incorporated by reference herein.Further information about DWS Value Builder Fund, Inc. is contained in the statement of additional information dated August 1, 2008, as supplemented from time to time, for Class A, Class B, Class C and Institutional Class shares.The date of this statement of additional information is ___________, 2009. 
                                DWS BALANCED FUND

                     Class A, B, C and Institutional Shares

                       STATEMENT OF ADDITIONAL INFORMATION

                                  March 1, 2008

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectuses for DWS Balanced Fund (the "Fund"), dated
March 1, 2008 as amended from time to time, for Class A, B, C and Institutional
Class, copies of which may be obtained without charge by contacting DWS Scudder
Distributors, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, (800)
621-1148 or from the firm from which this Statement of Additional Information
was obtained. The prospectuses are also available along with the other materials
on the Securities and Exchange Commission's Internet Web site
(http://www.sec.gov).

The Annual Report to Shareholders of the Fund, dated October 31, 2007,
accompanies this Statement of Additional Information. The financial statements
contained therein, together with accompanying notes, are incorporated by
reference and are hereby deemed to be part of this Statement of Additional
Information.

This Statement of Additional Information ("SAI") is incorporated by reference
into the corresponding prospectuses for each class of shares of the Fund noted
above.

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

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

INVESTMENT POLICIES AND TECHNIQUES............................................3
   Portfolio Holdings........................................................29

MANAGEMENT OF THE FUND.......................................................30
   Investment Advisor........................................................30
   Compensation of Portfolio Managers........................................35

FUND SERVICE PROVIDERS.......................................................44
   Distributor...............................................................44
   Custodian.................................................................49
   Transfer Agent and Shareholder Service Agent..............................49
   Fund Accounting Agent.....................................................50
   Legal Counsel.............................................................50
   Independent Registered Public Accounting Firm.............................50

PORTFOLIO TRANSACTIONS.......................................................52

PURCHASE AND REDEMPTION OF SHARES............................................55

DIVIDENDS....................................................................74

TAXES........................................................................75

NET ASSET VALUE..............................................................78

TRUSTEES AND OFFICERS........................................................79

TRUST ORGANIZATION...........................................................92

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

FINANCIAL STATEMENTS.........................................................95

ADDITIONAL INFORMATION.......................................................95

APPENDIX.....................................................................96

                                       i

                             INVESTMENT RESTRICTIONS

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

Any investment restrictions herein which involve a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.

The Fund has elected to be classified as a diversified series of an open-end
management investment company. A diversified fund 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.

As a matter of fundamental policy, the Fund may not:

(1)      borrow money, except as permitted under the Investment Company Act of
         1940, as amended ("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)      concentrate its investments in a particular industry, as that term is
         used in the 1940 Act, and as interpreted or modified by regulatory
         authority having jurisdiction, from time to time;

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

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

(6)      purchase physical commodities or contracts relating to physical
         commodities; 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.

A fundamental policy may not be changed without the approval of a majority of
the Fund's outstanding voting shares. As used in this Statement of Additional
Information, a "majority" of the Fund's outstanding shares as defined under the
1940 Act, means the lesser of (a) 67% or more of the voting securities of the
Fund present at such meeting, if the holders of more than 50% of the outstanding
voting securities of the Fund are present in person or represented by proxy or
(b) more than 50% of the outstanding voting securities of the Fund.

The Trustees of the Trust have voluntarily adopted certain policies and
restrictions, which are observed in the conduct of the Fund's affairs.
Non-fundamental policies may be changed by the Trustees of the Trust without
requiring prior notice to or approval of shareholders.

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

(a)      borrow money in an amount greater than 5% of its total assets except
         (i) for temporary or emergency purposes and (ii) by engaging in reverse
         repurchase agreements, dollar rolls, or other investments or
         transactions described in the Fund's registration statement which may
         be deemed to be borrowings;

(b)      enter into either of reverse repurchase agreements or dollar rolls in
         an amount greater than 5% of its total assets;

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

(d)      purchase options, unless the aggregate premiums paid on all such
         options held by the Fund at any time do not exceed 20% of its total
         assets; or sell put options, if as a result, the aggregate value of the
         obligations underlying such put options would exceed 50% of its total
         assets;

(e)      purchase warrants if as a result, such securities, taken at the lower
         of cost or market value, would represent more than 5% of the value of
         the Fund's total assets (for this purpose, warrants acquired in units
         or attached to securities will be deemed to have no value);

(f)      invest more than 15% of net assets in illiquid securities, including
         repurchase agreements maturing in more than seven days.

(g)      lend portfolio securities in an amount greater than 33 1/3% of its
         total assets; and

(h)      acquire securities of registered open-end investment companies or
         registered unit investment trusts in reliance on Sections 12(d)(1)(F)
         or 12(d)(1)(G) of the 1940 Act.

To meet federal income tax requirements for qualification as a regulated
investment company, the Fund must, among other things, 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 the securities (other than
securities of the US government or a regulated investment company) of a single
issuer or two or more issuers which the Fund controls and which are engaged in
the same, similar or related trades or businesses or in the securities of one or
more qualified publicly traded partnerships, and (2) at least 50% of the value
of its total assets is represented by cash, cash items (including receivables),
US 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 Fund's total assets and not more than 10% of the issuer's outstanding
voting securities.

Master/feeder Fund Structure. The Board of Trustees has the discretion to retain
the current distribution arrangement for the Fund while investing in a master
fund in a master/feeder fund structure as described below.

A master/feeder fund structure is one in which a fund (a "feeder fund"), instead
of investing directly in a portfolio of securities, invests most or all of its
investment assets in a separate registered investment company (the "master
fund") with substantially the same investment objective and policies as the
feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.

                       INVESTMENT POLICIES AND TECHNIQUES

General

The Fund is an open-end management investment company which continuously offers
and redeems shares at net asset value (less applicable sales charges or fees).
The Fund is a company of the type commonly known as a mutual fund. The Fund is a
series of DWS Balanced Fund (the "Trust"). The Fund offers five classes of
shares: Class A, Class B, Class C, Class S and Institutional Class shares.

Investment Techniques

Descriptions in this SAI of a particular investment practice or technique in
which the Fund may engage are meant to describe the spectrum of investments that
Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor") in its
discretion might, but is not required to, use in managing the Fund's portfolio
assets. 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 Fund, but, to the extent employed, could from time to time have a material
impact on the Fund's performance.

In addition to the Fund's main investment strategy, the Advisor seeks to enhance
returns by employing a global tactical asset allocation (GTAA) overlay strategy.
The GTAA strategy, which Advisor calls iGAP (integrated Global Alpha Platform),
is a total return strategy designed to add value by benefiting from short-term
and medium-term mis-pricings within global equity, bond and currency markets.
iGAP is expected to have a low correlation to the fund's stock and bond
holdings.

The iGAP strategy combines diverse macro investment views from various
investment analysts within Deutsche Asset Management. Since a single investment
approach rarely works in all market conditions, the views 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, bonds and
currencies designed to generate excess returns that have little correlation to
major markets. The 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 instrument.

Borrowing. As a matter of fundamental policy, the 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 the Fund's
Board of Trustees does not currently intend to borrow for investment leveraging
purposes, if such a strategy were implemented in the future it would increase
the Fund's volatility and the risk of loss in a declining market. Borrowing by
the Fund will involve special risk considerations. Although the principal of the
Fund's borrowings will be fixed, the Fund's assets may change in value during
the time a borrowing is outstanding, thus increasing exposure to capital risk.

The Fund may borrow up to 5% of the Fund's net assets against called and
tendered bonds in the Fund.

Bank Loans. The Fund may invest in bank loans, which 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 generally rate bank loans a notch or two
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 the 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, the 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,
the 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 the 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 the 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 the 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.

US Government Securities. The Fund may invest in obligations issued or
guaranteed as to both principal and interest by the US Government, its agencies,
instrumentalities or sponsored enterprises ("US Government securities"). The
full faith and credit of the US support some US Government securities, such as
US Treasury bills, notes and bonds. Others, such as obligations issued or
guaranteed by US Government agencies or instrumentalities, are supported either
by (i) the full faith and credit of the US Government (such as securities of the
Small Business Administration), (ii) the right of the issuer to borrow from the
US Treasury (such as securities of the Federal Home Loan Banks), (iii) the
discretionary authority of the US Government to purchase the agency's
obligations (such as securities of the Federal National Mortgage Association),
or (iv) only the credit of the issuer. No assurance can be given that the US
Government will provide financial support to US Government agencies or
instrumentalities in the future.

The Fund may also invest in separately traded principal and interest components
of securities guaranteed or issued by the US Government or its agencies,
instrumentalities or sponsored enterprises if such components are traded
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS") or any similar program sponsored by the US
Government. STRIPS are sold as zero coupon securities. See "Zero Coupon
Securities."

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" above) are interests in accounts
sponsored by the US Treasury. Receipts are sold as zero coupon securities; for
more information, see "Zero Coupon Securities."

The 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 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 tax diversification requirements
applicable to regulated investment companies such as the Fund. 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 the
Fund. The Fund is not aware of any binding legislative, judicial or
administrative authority on this issue.

Zero Coupon Securities. STRIPS and custodial receipts (TRs, TIGRs and CATS) are
sold as zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are sold at
a (usually substantial) discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. The amount of this
discount is accreted over the life of the security, and the accretion
constitutes the income earned on the security for both accounting and tax
purposes. Because a Fund must distribute the accreted amounts in order to
qualify for favorable tax treatment, it may have to sell portfolio securities to
generate cash to satisfy the applicable distribution requirements. Because of
these features, the market prices of zero coupon securities are generally more
volatile than the market prices of securities that have similar maturity but
that pay interest periodically. Zero coupon securities are likely to respond to
a greater degree to interest rate changes than are non-zero coupon securities
with similar maturity and credit qualities.

Common Stocks. Common stock is issued by companies to raise cash for business
purposes and represents a proportionate interest in the issuing companies.
Therefore, the 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 and Preferred Securities. Subject to its investment objectives and
policies, the Fund may invest in convertible securities, which are ordinarily
preferred stock or long-term debt obligations of an issuer convertible at a
stated exchange rate into common stock of the issuer. The market value of
convertible securities tends to decline as interest rates increase and,
conversely, to increase as interest rates decline. Convertible securities
generally offer lower interest or dividend yields than non-convertible
securities of similar quality. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the price
of the convertible security tends to reflect the value of the underlying common
stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus may
not depreciate to the same extent as the underlying common stock. Convertible
securities generally rank senior to common stocks in an issuer's capital
structure, are consequently of higher quality, and entail less risk than the
issuer's common stock.

However, the extent to which such risk is reduced depends in large measure upon
the degree to which the convertible security sells above its value as a fixed
income security. The convertible debt securities in which the Fund may invest
are subject to the same rating criteria and downgrade policy as the Fund's
investments in fixed income securities.

The Fund, subject to its investment objectives, may purchase preferred stock.
Preferred stock is an equity security, but possesses certain attributes of debt
securities and is generally considered a fixed income security. Holders of
preferred stock normally have the right to receive dividends at a fixed rate
when and as declared by the issuer's board of directors, but do not participate
in other amounts available for distribution by the issuing corporation.
Dividends on the 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 stock generally entails less
risk than common stocks. Upon liquidation, preferred stock is entitled to a
specified liquidation preference, which is generally the same as the par or
stated value, and is senior in right of payment to common stock. However,
preferred stock is an equity security in that it does not represent a liability
of the issuer and therefore does not offer as great a degree of protection of
capital or assurance of continued income as investments in corporate debt
securities. In addition, preferred stock is subordinated in right of payment to
all debt obligations and creditors of the issuer, and convertible preferred
stocks may be subordinated to other preferred stock of the same issuer.

Debt Securities. The Fund may invest in debt securities, including bonds of
private issuers. Portfolio debt investments will be selected on the basis of,
among other things, credit quality, and the fundamental outlooks for currency,
economic and interest rate trends, taking into account the ability to hedge a
degree of currency or local bond price risk. The Fund may purchase
"investment-grade" bonds, 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.

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.

Depositary Receipts. The 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, EDR's, 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 US 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 US 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 US banks or trust companies, and evidence ownership of underlying
securities issued by either a foreign or a US corporation. Generally, Depositary
Receipts in registered form are designed for use in the US securities markets
and Depositary Receipts in bearer form are designed for use in securities
markets outside the US. For purposes of a Fund's investment policies, the 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, the Fund avoids currency risks during the
settlement period. In general, there is a large, liquid market in the US for
most ADRs. However, certain Depositary Receipts may not be listed on an exchange
and therefore may be illiquid securities.

Direct Debt Instruments. Direct debt instruments are interests in amounts owed
by a corporate, governmental or other borrower to lenders (direct loans), to
suppliers of goods or services (trade claims or other receivables) or to other
parties. The Fund may invest in all types of direct debt investments, but among
these investments the Fund currently intends to invest primarily in direct loans
and trade claims.

When the Fund participates in a direct loan it will be lending money directly to
an issuer. Direct loans generally do not have an underwriter or agent bank, but
instead, are negotiated between a company's management team and a lender or
group of lenders. Direct loans typically offer better security and structural
terms than other types of high yield securities. Direct debt obligations are
often the most senior-obligations in an issuer's capital structure or are
well-collateralized so that overall risk is lessened.

Trade claims are unsecured rights of payment arising from obligations other than
borrowed funds. Trade claims include vendor claims and other receivables that
are adequately documented and available for purchase from high-yield
broker-dealers. Trade claims typically may sell at a discount. In addition to
the risks otherwise associated with low-quality obligations, trade claims have
other risks, including the possibility that the amount of the claim may be
disputed by the obligor. Trade claims normally would be considered illiquid and
pricing can be volatile.

Direct debt instruments involve a risk of loss in case of default or insolvency
of the borrower. The Fund will rely primarily upon the creditworthiness of the
borrower and/or the collateral for payment of interest and repayment of
principal. The value of the Fund's investments may be adversely affected if
scheduled interest or principal payments are not made. Because most direct loans
will be secured, there will be a smaller risk of loss with direct loans than
with an investment in unsecured high yield bonds or trade claims. Indebtedness
of borrowers whose creditworthiness is poor involves substantially greater risks
and may be highly speculative. Borrowers that are in bankruptcy or restructuring
may never pay off their indebtedness or may pay only a small fraction of the
amount owed. Investments in direct debt instruments also involve interest rate
risk and liquidity risk. However, interest rate risk is lessened by the
generally short-term nature of direct debt instruments and their interest rate
structure, which typically floats. To the extent the direct debt instruments in
which the Fund invests are considered illiquid, the lack of a liquid secondary
market (1) will have an adverse impact on the value of such instruments, (2)
will have an adverse impact on the Fund's ability to dispose of them when
necessary to meet the Fund's liquidity needs or in response to a specific
economic event, such as a decline in creditworthiness of the issuer, and (3) may
make it more difficult for the Fund to assign a value of these instruments for
purposes of valuing the Fund's portfolio and calculating its net asset value. In
order to lessen liquidity risk, the Fund anticipates investing primarily in
direct debt instruments that are quoted and traded in the high yield market and
will not invest in these instruments if it would cause more than 15% of the
Fund's net assets to be illiquid. Trade claims may also present a tax risk to
the Fund. The Fund will not invest in trade claims if it effects the Fund's
qualification as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code").

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 fund will segregate cash, US government securities or other liquid assets in
an amount sufficient to meet its purchase obligations under the transactions.

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.

Foreign Currencies. Because investments in foreign securities usually will
involve currencies of foreign countries, and because the Fund may hold foreign
currencies and forward contracts, futures contracts and options on foreign
currencies and foreign currency futures contracts, the value of the assets of
the Fund as measured in US dollars may be affected favorably or unfavorably by
changes in foreign currency exchange rates and exchange control regulations, and
the Fund may incur costs and experience conversion difficulties and
uncertainties in connection with conversions between various currencies.
Fluctuations in exchange rates may also affect the earning power and asset value
of the foreign entity issuing the security.

The strength or weakness of the US dollar against these currencies is
responsible for part of the 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 remains unchanged. Conversely, if the dollar rises in value relative to
the yen, the dollar value of the Japanese stock will fall.

Although the 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 the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
resell that currency to the dealer. The 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
options or forward or futures contracts to purchase or sell foreign currencies.

Foreign Fixed Income Securities. Since most foreign fixed income securities are
not rated, the 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 the Fund's goals may depend more upon the abilities of the
Advisor than would otherwise be the case.

The value of the foreign fixed income securities held by the Fund, and thus the
net asset value of the 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 the 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 the Fund's
investments in foreign fixed income securities, and the extent to which the 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 the 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 the 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 Investment. While the Fund's investments in foreign countries offer the
potential for substantial appreciation over time, they also involve
above-average investment risk in comparison to a mutual fund investing in a
broad range of US equity securities. The Fund is designed as a long-term
investment and not for short-term trading purposes. The Fund should not be
considered a complete investment program. The Fund's net asset value, or price,
can fluctuate significantly with changes in stock market levels, political
developments, movements in currencies, global investment flows and other
factors.

Foreign Securities. Investing in foreign securities involves certain special
considerations, including those set forth below, which are not typically
associated with investing in US securities and which may favorably or
unfavorably affect the Fund's performance. As foreign companies are not
generally subject to uniform accounting, auditing and financial reporting
standards, practices and requirements comparable to those applicable to domestic
companies, there may be less publicly available information about a foreign
company than about a domestic company. Many foreign securities markets, while
growing in volume of trading activity, have substantially less volume than the
US market, and securities of some foreign issuers are less liquid and more
volatile than securities of domestic issuers. Similarly, volume and liquidity in
most foreign bond markets is less than in the US and, at times, volatility of
price can be greater than in the US Fixed commissions on some foreign securities
exchanges and bid to asked spreads in foreign bond markets are generally higher
than commissions or bid to asked spreads on US markets, although the Advisor
will endeavor to achieve the most favorable net results on its portfolio
transactions. There is generally less governmental supervision and regulation of
securities exchanges, brokers and listed companies in foreign countries than in
the US. It may be more difficult for the Fund's agents to keep currently
informed about corporate actions in foreign countries which may affect the
prices of portfolio securities. Communications between the US and foreign
countries may be less reliable than within the US, thus increasing the risk of
delayed settlements of portfolio transactions or loss of certificates for
portfolio securities. Payment for securities without delivery may be required in
certain foreign markets. In addition, with respect to certain foreign countries,
there is the possibility of expropriation or confiscatory taxation, political or
social instability, or diplomatic developments which could affect US investments
in those countries. Moreover, individual 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. The Advisor seeks to mitigate the risks associated
with the foregoing considerations through continuous professional management.

High Yield/High Risk Bonds. The Fund may 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 or Fitch and unrated securities
judged to be of equivalent quality as determined by the 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 the 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.

The 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, the 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 the
Fund's ability to dispose of particular issues and may also make it more
difficult for the Fund to obtain accurate market quotations for purposes of
valuing the 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 Advisor 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 the Fund's
investment objective by investment in such securities may be more dependent on
the Advisor's credit analysis than is the case for higher quality bonds. Should
the rating of a portfolio security be downgraded, the Advisor will determine
whether it is in the best interests of the 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 corporate tax deduction for interest
payments in 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 the Fund may be purchased
upon issuance, which may involve special risks because the securities so
acquired are new issues. In such instances, the 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 the Fund to seek
to protect itself against certain risks, the considerations discussed herein
would nevertheless remain applicable.

Restructuring Instruments. The Fund may hold distressed securities, which are
securities that are in default or in risk of being in default. In connection
with an exchange or workout of such securities, the Fund may accept various
instruments if the investment adviser determines it is in the best interests of
the Fund and consistent with the Fund's investment objective and policies. Such
instruments may include, but not limited to, warrants, rights, participation
interests in assets sales and contingent-interest obligations.

Illiquid Securities and Restricted Securities. The 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 Securities Act of 1933, as
amended. 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.

The Trust's Board has approved guidelines for use by the Advisor in determining
whether a security is liquid or illiquid. Among the factors the 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, the
Fund may be required to bear all or part of the registration expenses. The Fund
may be deemed to be an "underwriter" for purposes of the Securities Act of 1933,
as amended, when selling restricted securities to the public and, in such event,
the Fund may be liable to purchasers of such securities if the registration
statement prepared by the issuer is materially inaccurate or misleading.

The 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.

The 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 the Fund's decision to sell a restricted or illiquid security and
the point at which the Fund is permitted or able to sell such security, the Fund
might obtain a price less favorable than the price that prevailed when it
decided to sell. This investment practice, therefore, could have the effect of
increasing the level of illiquidity of the Fund.

Impact of Large Redemptions and Purchases of Fund shares. From time to time,
shareholders of the Fund (which may include affiliated and/or non-affiliated
registered investment companies that invest in the Fund) may make relatively
large redemptions or purchases of Fund shares. These transactions may cause the
Fund to have to sell securities or invest additional cash, as the case may be.
While it is impossible to predict the overall impact of these transactions over
time, there could be adverse effects on the Fund's performance to the extent
that the Fund may be required to sell securities or invest cash at times when it
would not otherwise do so. These transactions could also accelerate the
realization of taxable income if sales of securities resulted in capital gains
or other income and could also increase transaction costs, which may impact the
Fund's expense ratio.

Indexed Securities. The Fund may invest in indexed securities, the value of
which is linked to currencies, interest rates, commodities, indices or other
financial indicators ("reference instruments"). Most indexed securities have
maturities of three years or less.

Indexed securities differ from other types of debt securities in which the Fund
may invest in several respects. First, the interest rate or, unlike other debt
securities, the principal amount payable at maturity of an indexed security may
vary based on changes in one or more specified reference instruments, such as an
interest rate compared with a fixed interest rate or the currency exchange rates
between two currencies (neither of which need be the currency in which the
instrument is denominated). The reference instrument need not be related to the
terms of the indexed security. For example, the principal amount of a US dollar
denominated indexed security may vary based on the exchange rate of two foreign
currencies. An indexed security may be positively or negatively indexed; that
is, its value may increase or decrease if the value of the reference instrument
increases. Further, the change in the principal amount payable or the interest
rate of an indexed security may be a multiple of the percentage change (positive
or negative) in the value of the underlying reference instrument(s).

Investment in indexed securities involves certain risks. In addition to the
credit risk of the security's issuer and the normal risks of price changes in
response to changes in interest rates, the principal amount of indexed
securities may decrease as a result of changes in the value of reference
instruments. Further, in the case of certain indexed securities in which the
interest rate is linked to a reference instrument, the interest rate may be
reduced to zero, and any further declines in the value of the security may then
reduce the principal amount payable on maturity. Finally, indexed securities may
be more volatile than the reference instruments underlying the indexed
securities.

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. The 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 the Fund's portfolio as the Fund's assets increase (and thus have a more
limited effect on the Fund's performance).

Interfund Borrowing and Lending Program. The Trust has received exemptive relief
from the SEC, which permits the Fund 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, the
Fund may participate in the program only if and to the extent that such
participation is consistent with the 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. The 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 Board of the participating funds. To the extent the Fund is actually engaged
in borrowing through the interfund lending program, such borrowings will comply
with the Fund's fundamental and non-fundamental policies.

Investing in Emerging Markets. The Fund's investments in foreign securities may
be in developed countries or in countries considered by the Fund's Advisor to
have developing or "emerging" markets, which involve exposure to economic
structures that are generally less diverse and mature than in the US, 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 US, 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 the 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, the 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 believe 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 the Fund is uninvested and
therefore no return is earned thereon. The inability of the Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in losses to the Fund
due to subsequent declines in value of the portfolio security or, if the 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, particularly in emerging markets, are generally higher than costs
associated with transactions in US securities. Such transactions may 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. The 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 the Fund of any restrictions on investments.

In the course of investment in emerging markets, the Fund will be exposed to the
direct or indirect consequences of political, social and economic changes in one
or more emerging markets. While the 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 the Fund to suffer
a loss of value in respect of the securities in the Fund's holdings. 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 the Fund's securities in such markets may
not be readily available. The Fund may suspend redemption of its shares for any
period during which an emergency exists, as determined by the SEC. Accordingly,
if the 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 the Fund's identification of such condition until the
date of the SEC action, the Fund's securities in the affected markets will be
valued at fair value determined in good faith by or under the direction of the
Trust'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 the 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 the 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.

The 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 the Fund defaults, the 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. The 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 the Fund could be reduced by a withholding tax at
the source or other taxes imposed by the emerging market countries in which the
Fund makes its investments. The Fund's net asset value may also be affected by
changes in the rates or methods of taxation applicable to the Fund or to
entities in which the 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 the 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 the 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. The Fund may acquire securities of other
investment companies to the extent consistent with its investment objective and
subject to the limitations of the 1940 Act. The Fund will indirectly bear its
proportionate share of any management fees and other expenses paid by such other
investment companies.

For example, the 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 NAVs). 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. The 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, the Fund will not be able to avail itself of
opportunities for higher income which may be available at lower grades.

Investment of Uninvested Cash Balances. A Fund may have a cash balance that has
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 Funds 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).

Lending of Portfolio Securities. The 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, the 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 the Fund. The 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 that (a) the borrower pledge and maintain
with the 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 the Fund at any time, and (d) the Fund
receives reasonable interest on the loan (which may include the Fund investing
any cash collateral in interest bearing short-term investments), and
distributions on the loaned securities and any increase in their market value.
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 the Fund's delegate
after a commercially reasonable review of relevant facts and circumstances,
including the creditworthiness of the borrower.

At the present time, the staff of the SEC does not object if an investment
company pays reasonable negotiated fees in connection with loaned securities, so
long as such fees are set forth in a written contract and approved by the
investment company's Board of Trustees/Directors. 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 the Fund
may be invested in a money market fund managed by the Advisor (or one of its
affiliates).

Mortgage-Backed and Asset-Backed Securities

General. The Fund may invest in mortgage-backed securities, which represent
direct or indirect participations in, or are collateralized by and payable from,
mortgage loans secured by real property. The Fund may also invest in
asset-backed securities, which represent participations in, or are secured by
and payable from, assets such as motor vehicle installment sales, installment
loan contracts, leases of various types of real and personal property and
receivables from revolving credit (credit card) agreements and other categories
of receivables. Such securities are generally issued by trusts and special
purpose corporations.

Mortgage-backed and asset-backed securities are often subject to more rapid
repayment than their stated maturity date would indicate as a result of the
pass-through of prepayments of principal on the underlying loans. During periods
of declining interest rates, prepayment of loans underlying mortgage-backed and
asset-backed securities can be expected to accelerate, and thus impair the
Fund's ability to reinvest the returns of principal at comparable yields.
Accordingly, the market values of such securities will vary with changes in
market interest rates generally and in yield differentials among various kinds
of US Government securities and other mortgage-backed and asset-backed
securities. Asset-backed securities present certain risks that are not presented
by mortgage-backed securities because asset-backed securities generally do not
have the benefit of a security interest in collateral that is comparable to
mortgage assets. In addition, there is the possibility that, in some cases,
recoveries on repossessed collateral may not be available to support payments on
these securities. Many mortgage and asset-backed securities may be considered
derivative instruments.

Mortgage-Backed. The Fund may invest in mortgage-backed securities, including
derivative instruments. Mortgage-backed securities represent direct or indirect
participations in or obligations collateralized by and payable from mortgage
loans secured by real property. The Fund may invest in mortgage-backed
securities issued or guaranteed by US Government agencies or instrumentalities
such as the Government National Mortgage Association ("GNMA"), the Federal
National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
Corporation ("FHLMC"). Obligations of GNMA are backed by the full faith and
credit of the US Government. Obligations of FNMA and FHLMC are not backed by the
full faith and credit of the US Government but are considered to be of high
quality since they are considered to be instrumentalities of the US. The market
value and yield of these mortgage-backed securities can vary due to market
interest rate fluctuations and early prepayments of underlying mortgages. These
securities represent ownership in a pool of Federally insured mortgage loans
with a maximum maturity of 30 years. The scheduled monthly interest and
principal payments relating to mortgages in the pool will be "passed through" to
investors. Government mortgage-backed securities differ from conventional bonds
in that principal is paid back to the certificate holders over the life of the
loan rather than at maturity. As a result, there will be monthly scheduled
payments of principal and interest.

The Fund may invest in mortgage-backed securities issued by non-governmental
entities including collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs"). CMOs are securities collateralized by
mortgages, mortgage pass-throughs, mortgage pay-through bonds (bonds
representing an interest in a pool of mortgages where the cash flow generated
from the mortgage collateral pool is dedicated to bond repayment), and
mortgage-backed bonds (general obligations of the issuers payable out of the
issuers' general funds and additionally secured by a first lien on a pool of
single family detached properties). Many CMOs are issued with a number of
classes or series that have different maturities and are retired in sequence.
Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the unscheduled prepayments of principal
up to a predetermined portion of the total CMO obligation. Until that portion of
such CMO obligation is repaid, investors in the longer maturities receive
interest only. Accordingly, the CMOs in the longer maturity series are less
likely than other mortgage pass-throughs to be prepaid prior to their stated
maturity. Although some of the mortgages underlying CMOs may be supported by
various types of insurance, and some CMOs may be backed by GNMA certificates or
other mortgage pass-throughs issued or guaranteed by US Government agencies or
instrumentalities, the CMOs themselves are not generally guaranteed.

REMICs are private entities formed for the purpose of holding a fixed pool of
mortgages secured by an interest in real property. REMICs are similar to CMOs in
that they issue multiple classes of securities, including "regular" interests
and "residual" interests. The Fund does not intend to acquire residual interests
in REMICs, due to certain disadvantages for regulated investment companies that
acquire such interests. Mortgage-backed securities are subject to unscheduled
principal payments representing prepayments on the underlying mortgages.
Although these securities may offer yields higher than those available from
other types of securities, mortgage-backed securities may be less effective than
other types of securities as a means of "locking in" attractive long-term rates
because of the prepayment feature. For instance, when interest rates decline,
the value of these securities likely will not rise as much as comparable debt
securities due to the prepayment feature. In addition, these prepayments can
cause the price of a mortgage-backed security originally purchased at a premium
to decline in price to its par value, which may result in a loss.

Due to prepayments of the underlying mortgage instruments, mortgage-backed
securities do not have a known actual maturity. In the absence of a known
maturity, market participants generally refer to an estimated average life. The
Advisor believes that the estimated average life is the most appropriate measure
of the maturity of a mortgage-backed security. Accordingly, in order to
determine whether such security is a permissible investment, it will be deemed
to have a remaining maturity of three years or less if the average life, as
estimated by the Advisor, is three years or less at the time of purchase of the
security by the Fund. An average life estimate is a function of an assumption
regarding anticipated prepayment patterns. The assumption is based upon current
interest rates, current conditions in the relevant housing markets and other
factors. The assumption is necessarily subjective, and thus different market
participants could produce somewhat different average life estimates with regard
to the same security. Although the Advisor will monitor the average life of the
portfolio securities of the Fund with a portfolio maturity policy and make
needed adjustments to comply with the Fund's policy as to average dollar
weighted portfolio maturity, there can be no assurance that the average life of
portfolio securities as estimated by the Advisor will be the actual average life
of such securities.

Asset-Backed Securities. The Fund may invest in asset-backed securities, which
represent participations in, or are secured by and payable from, pools of assets
including company receivables, truck and auto loans, leases and credit card
receivables. The asset pools that back asset-backed securities are securitized
through the use of privately formed trusts or special purpose corporations.
Payments or distributions of principal and interest may be guaranteed up to
certain amounts and for a certain time period by a letter of credit or a pool
insurance policy issued by a financial institution unaffiliated with the trust
or corporation, or other credit enhancements may be present. Certain
asset-backed securities may be considered derivative instruments.

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. The 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 the Fund, to
participate in privatizations may be limited by local law, or the price or terms
on which the 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 the 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 the 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.

Real Estate Investment Trusts ("REITs"). REITs are sometimes informally
categorized into equity REITs, mortgage REITs and hybrid REITs. Investment in
REITs may subject the 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 the 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 to maintain exemption
from the registration requirements of the 1940 Act. By investing in REITs
indirectly through the Fund, a shareholder will bear not only his or her
proportionate share of the expenses of the 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. The Fund may invest in repurchase agreements pursuant to
its investment guidelines. In a repurchase agreement, the 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 the Fund to earn income on funds for
periods as short as overnight. It is an arrangement under which the purchaser
(i.e., the 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, as described in more detail below, 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 the Fund, or
the purchase and repurchase prices may be the same, with interest at a stated
rate due to the Fund together with the repurchase price upon repurchase. In
either case, the income to the 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 the
Fund subject to a repurchase agreement as being owned by that Fund or as being
collateral for a loan by that 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, the 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 the
Fund has not perfected a security interest in the Obligation, the 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, the 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 the 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 the Fund may incur a loss if the proceeds to the 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), the 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. The Fund may enter into "reverse repurchase
agreements," which are repurchase agreements in which the Fund, as the seller of
the securities, agrees to repurchase such securities at an agreed time and
price. The Fund segregates assets in an amount at least equal to obligations
under outstanding reverse repurchase agreements. The 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.

Short Sales Against the Box. The Fund may make short sales of common stocks if,
at all times when a short position is open, the Fund owns the stock or owns
preferred stocks or debt securities convertible or exchangeable, without payment
of further consideration, into the shares of common stock sold short. Short
sales of this kind are referred to as short sales "against the box." The Fund
will incur a loss as a result of the short sale if the price of the security
increases between the dates of the short sale and the date on which the Fund
replaces the borrowed security. The broker/dealer that executes a short sale
generally invests cash proceeds of the sale until they are paid to the Fund.
Arrangements may be made with the broker/dealer to obtain a portion of the
interest earned by the broker on the investment of short sale proceeds. The Fund
will segregate the common stock or convertible or exchangeable preferred stock
or debt securities in a special account with the custodian. The Fund will incur
transaction costs, including interest expenses in connection with opening,
maintaining, and closing short sales against the box. Uncertainty regarding the
tax effects of short sales of appreciated investments may limit the extent to
which a Fund may enter into short sales against the box.

Small Company Risk. 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.

Sovereign Debt. Investment in sovereign debt can involve a high degree of risk.
The governmental entity that controls the repayment of sovereign debt may not be
able or willing to repay the principal and/or interest when due in accordance
with the terms of such debt. A governmental entity's willingness or ability to
repay principal and interest due in a timely manner may be affected by, among
other factors, its cash flow situation, the extent of its foreign reserves, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of the debt service burden to the economy as a whole, the
governmental entity's policy toward the International Monetary Fund, and the
political constraints to which a governmental entity may be subject.
Governmental entities may also be dependent on expected disbursements from
foreign governments, multilateral agencies and others abroad to reduce principal
and interest arrearages on their debt. The commitment on the part of these
governments, agencies and others to make such disbursements may be conditioned
on a governmental entity's implementation of economic reforms and/or economic
performance and the timely service of such debtor's obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may result in the cancellation of such third
parties commitments to lend funds to the governmental entity, which may further
impair such debtor's ability or willingness to service its debts in a timely
manner. Consequently, governmental entities may default on their sovereign debt.
Holders of sovereign debt may be requested to participate in the rescheduling of
such debt and to extend further loans to governmental entities. There is no
bankruptcy proceeding by which sovereign debt on which governmental entities
have defaulted may be collected in whole or in part.

Strategic Transactions and Derivatives. The 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 the 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, the 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, 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 the Fund's
portfolio resulting from securities markets or currency exchange rate
fluctuations, to protect the 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 the 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, consistent with Fund's investment
objective. 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 the
Fund to utilize these Strategic Transactions successfully will depend on the
Advisor's ability to predict pertinent market movements, which cannot be
assured. The 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 the Fund, and the Fund will segregate assets (or as provided
by applicable regulations, enter into certain offsetting positions) to cover its
obligations under options, futures, swaps and other derivatives to limit
leveraging of the 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 the 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 the Fund can realize on its investments or
cause the Fund to hold a security it might otherwise sell. The use of currency
transactions can result in the 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 the
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the 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,
the 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 fund assets in special accounts, as described
below under "Use of Segregated and Other Special Accounts."

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, the 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 the 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. The Fund's purchase of a call option on a security, financial future,
index, currency or other instrument might be intended to protect the 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. The 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.

The 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 cannot 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. The
Fund will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula price within seven days. The
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 the Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, the 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. The 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 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 the Fund, and
portfolio securities "covering" the amount of the Fund's obligation pursuant to
an OTC option sold by it (the cost of the sell-back plus the in-the-money
amount, if any) are illiquid, and are subject to the Fund's limitation on
investing no more than 15% of its net assets in illiquid securities.

If the 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 the Fund's income. The sale of put options can also provide income.

The Fund may purchase and sell call options on securities including US Treasury
and agency securities, mortgage-backed securities, foreign sovereign debt,
corporate debt securities, equity securities (including convertible securities)
and 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. All calls sold by the Fund must be "covered"
(i.e., the 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 the Fund will receive the option premium to
help protect it against loss, a call sold by the Fund exposes the 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 the
Fund to hold a security or instrument which it might otherwise have sold.

The Fund may purchase and sell put options on securities including US Treasury
and agency securities, mortgage-backed securities, foreign sovereign debt,
corporate debt securities, equity securities (including convertible securities)
and 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. The
Fund will not sell put options if, as a result, more than 50% of the 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 the Fund may be
required to buy the underlying security at a disadvantageous price above the
market price.

General Characteristics of Futures. The Fund may enter into futures contracts or
purchase or sell put and call options on such futures as a hedge 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 the 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.

The Advisor has claimed an exclusion with respect to the Fund and is excluded
from the definition of the term "commodity pool operator" under the Commodity
Exchange Act and, therefore is not subject to commodity pool operator
registration and regulation under the Commodity Exchange Act. Futures and
options on futures may be entered into for bona fide hedging, risk management
(including duration management) or other portfolio and return enhancement
management purposes to the extent consistent with the exclusion from commodity
pool operator registration. Typically, maintaining a futures contract or selling
an option thereon requires the 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 marked 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 the Fund.
If the 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.

Options on Securities Indices and Other Financial Indices. The 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. The Fund may engage in currency transactions with
Counterparties in order to hedge, or manage the risk of the value of portfolio
holdings denominated in particular currencies against fluctuations in relative
value and to enhance return. 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. The 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 Advisor.

The Fund's dealings in forward currency contracts and other currency
transactions such as futures, options, options on futures and swaps may be used
for enhancing return or for 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
the 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.

The 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.

The 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 the fund has or in which the fund expects
to have portfolio exposure.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the 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 the 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 the Fund's securities
denominated in correlated currencies. Currency transactions involve some of the
same risks and considerations as other transactions with similar instruments.
Currency transactions can result in losses to the Fund if the currency
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 the Fund is engaging in proxy hedging. If the Fund enters into a currency
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 the 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.

Swaps, Caps, Floors and Collars. Among the Strategic Transactions into which the
Fund may enter are interest rate, currency, and other types of swaps and the
purchase or sale of related caps, floors and collars. The Fund expects to enter
into these transactions o preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
duration management technique, to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date or to enhance return.
The Fund will not sell interest rate caps or floors where it does not own
securities or other instruments providing the income stream the Fund may be
obligated to pay. Interest rate swaps involve the exchange by the 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 have special risks associated including possible default by the
counterparty to the transaction, illiquidity and, where swaps are used for
hedges, the risk that the use of a swap could result in losses greater than if
the swap had not been employed. Whether the use of swap agreements will be
successful in furthering its investment objective will depend on the Advisor's
ability to correctly predict whether certain types of investments are likely to
produce greater returns than other investments. Certain swap agreements may be
considered to be illiquid because they are two party contracts and because they
may have terms of greater than seven days. Moreover, the Fund bears the risk of
loss of the amount expected to be received under a swap agreement in the event
of the default or bankruptcy of a swap agreement counterparty.

The Fund will usually enter into swaps 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 a fund receiving or paying, as the case may
be, only the net amount of the two payments. Inasmuch as the Fund will segregate
assets (or enter into offsetting positions) to cover its obligations under
swaps, the Advisor and the Fund 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. The 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 a NRSRO or is determined to be of equivalent credit quality by the
Advisor. If there is a default by the Counterparty, a 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.

The Fund may invest up to 15% of its total assets in credit default swaps
(measured by the notional amount of the credit default swap). 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 the 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. No more than 5% of the Fund's total assets may be invested in credit
default swaps for purposes of buying credit protection on individual securities
if the Fund does not own the underlying security or securities at the time of
investment. Where the Fund is a seller of credit protection, it effectively adds
leverage to its portfolio because, in addition to its total net assets, the Fund
would be subject to investment exposure on the notional amount of the swap. The
Fund will only sell credit protection with respect to securities in which it
would be authorized to invest directly. The 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 the Fund's restrictions on
investing in illiquid securities.

If the Fund is a buyer of a credit default swap and no event of default occurs,
the Fund will lose its investment and recover nothing. However, if the Fund is a
buyer and an event of default occurs, the 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.

The 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.

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 the 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.

Eurodollar Instruments. The 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. The 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.

Combined Transactions. The 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 the 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.

Use of Segregated and Other Special Accounts. Many Strategic Transactions, in
addition to other requirements, require that the Fund segregate cash or liquid
assets with its custodian to the extent Fund obligations are not otherwise
"covered" through ownership of the underlying security, financial instrument or
currency. In general, either the full amount of any obligation by the Fund to
pay or deliver securities or assets must be covered at all times by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory restrictions, an amount of cash or liquid assets at least equal to
the current amount of the obligation must be segregated with the custodian. The
segregated assets cannot be sold or transferred unless equivalent assets are
substituted in their place or it is no longer necessary to segregate them. For
example, a call option written by the Fund will require the Fund to hold the
securities subject to the call (or securities convertible into the needed
securities without additional consideration) or to segregate cash or liquid
assets sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by the Fund on an index will require the Fund to
own portfolio securities which correlate with the index or to segregate cash or
liquid assets equal to the excess of the index value over the exercise price on
a current basis. A put option written by the Fund requires the Fund to segregate
cash or liquid assets equal to the exercise price.

Except when the Fund enters into a forward contract for the purchase or sale of
a security denominated in a particular currency, which requires no segregation,
a currency contract which obligates the Fund to buy or sell currency will
generally require the Fund to hold an amount of that currency or liquid assets
denominated in that currency equal to the Fund's obligations or to segregate
cash or liquid assets equal to the amount of the Fund's obligation.

OTC options entered into by the Fund, including those on securities, currency,
financial instruments or indices and OCC issued and exchange listed index
options, will generally provide for cash settlement. As a result, when the Fund
sells these instruments it will only segregate an amount of cash or liquid
assets equal to its accrued net obligations, as there is no requirement for
payment or delivery of amounts in excess of the net amount. These amounts will
equal 100% of the exercise price in the case of a non cash-settled put, the same
as an OCC guaranteed listed option sold by the Fund, or the in-the-money amount
plus any sell-back formula amount in the case of a cash-settled put or call. In
addition, when the Fund sells a call option on an index at a time when the
in-the-money amount exceeds the exercise price, the Fund will segregate, until
the option expires or is closed out, cash or cash equivalents equal in value to
such excess. OCC issued and exchange listed options sold by the Fund other than
those above generally settle with physical delivery, or with an election of
either physical delivery or cash settlement and the Fund will segregate an
amount of cash or liquid assets equal to the full value of the option. OTC
options settling with physical delivery, or with an election of either physical
delivery or cash settlement will be treated the same as other options settling
with physical delivery.

In the case of a futures contract or an option thereon, the Fund must deposit
initial margin and possible daily variation margin in addition to segregating
cash or liquid assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount owed at the expiration of an
index-based futures contract. Such liquid assets may consist of cash, cash
equivalents, liquid debt or equity securities or other acceptable assets.

With respect to swaps, the Fund will accrue the net amount of the excess, if
any, of its obligations over its entitlements with respect to each swap on a
daily basis and will segregate an amount of cash or liquid assets having a value
equal to the accrued excess. Caps, floors and collars require segregation of
assets with a value equal to the Fund's net obligation, if any.

Strategic Transactions may be covered by other means when consistent with
applicable regulatory policies. The Fund may also enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Strategic
Transactions. For example, the Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating cash or liquid assets if the
Fund held a futures or forward contract, it could purchase a put option on the
same futures or forward contract with a strike price as high or higher than the
price of the contract held. Other Strategic Transactions may also be offset in
combinations. If the offsetting transaction terminates at the time of or after
the primary transaction no segregation is required, but if it terminates prior
to such time, cash or liquid assets equal to any remaining obligation would need
to be segregated.

Sub-Prime Mortgage Exposure

The Fund may invest in companies that may be affected by the downturn in the
sub-prime mortgage lending market in the US. Sub-prime loans, which tend to have
higher interest rates, are made to borrowers who do not qualify for prime rate
loans because of their low credit ratings or other factors that suggest that
they have a higher probability of defaulting. The downturn in the sub-prime
mortgage-lending market has had, and may continue to have, a far-reaching impact
on the broader securities market, especially in the sub-prime, asset-backed and
other debt related securities markets. In addition to performance issues, the
reduced investor demand for sub-prime, asset-backed and other debt related
securities as a result of the downturn has created liquidity and valuation
issues for these securities. The Fund's investments related to or impacted by
the downturn in the sub-prime mortgage lending market may cause the overall
value of the Fund to decrease.

Variable Rate Securities. The Fund may invest in Variable Rate Securities,
instruments having rates of interest that are adjusted periodically or that
"float" continuously according to formulae intended to minimize fluctuation in
values of the instruments. The interest rate of Variable Rate Securities
ordinarily is determined by reference to or is a percentage of an objective
standard such as a bank's prime rate, the 90-day US Treasury Bill rate, or the
rate of return on commercial paper or bank certificates of deposit. Generally,
the changes in the interest rate on Variable Rate Securities reduce the
fluctuation in the market value of such securities. Accordingly, as interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than for fixed-rate obligations. Some Variable Rate Demand
Securities ("Variable Rate Demand Securities") have a demand feature entitling
the purchaser to resell the securities at an amount approximately equal to
amortized cost or the principal amount thereof plus accrued interest. As is the
case for other Variable Rate Securities, the interest rate on Variable Rate
Demand Securities varies according to some objective standard intended to
minimize fluctuation in the values of the instruments. The Fund determines the
maturity of Variable Rate Securities in accordance with Rule 2a-7, which allows
the Fund to consider certain of such instruments as having maturities shorter
than the maturity date on the face of the instrument.

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 the Fund were not exercised by the date of its expiration, the
Fund would lose the entire purchase price of the warrant.

When-Issued Securities. The 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 the Fund to the issuer and no interest accrues
to the Fund. When the 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 the Fund are held in cash pending the settlement of
a purchase of securities, the Fund would earn no income. While such securities
may be sold prior to the settlement date, the Fund intends to purchase them with
the purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time the 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. The Fund will segregate
cash or liquid assets at least equal in value to commitments for such
securities.

Portfolio Holdings

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

The Fund'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 Fund 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 Fund's procedures. This non-public information may also be disclosed,
subject to the requirements described below, to 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 Fund's non-public portfolio holdings information
to Authorized Third Parties, a person authorized by the Fund's Trustees must
make a good faith determination in light of the facts then known that the Fund
has a legitimate business purpose for providing the information, that the
disclosure is in the best interest of the Fund, 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 Fund or DeAM for disclosing non-public holdings
information. Periodic reports regarding these procedures will be provided to the
Fund's Trustees.

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 Fund and
information derived therefrom, including, but not limited to, how the Fund'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 Fund's
holdings could not be derived from such information.

Registered investment companies that are subadvised by DeAM may be subject to
different portfolio holdings disclosure policies, and neither DeAM nor the
Fund's Trustees exercise control over such policies. In addition, separate
account clients of DeAM have access to their portfolio holdings and are not
subject to the Fund's portfolio holdings disclosure policy. The portfolio
holdings of some of the funds subadvised by DeAM and some of the separate
accounts managed by DeAM may substantially overlap with the portfolio holdings
of the Fund.

DeAM also manages certain unregistered commingled trusts and creates model
portfolios, the portfolio holdings of which may substantially overlap with the
portfolio holdings of the Fund. To the extent that investors in these commingled
trusts or recipients of model portfolio holdings information may receive
portfolio holdings information of their trust or of a model portfolio on a
different basis from that on which Fund portfolio holdings information is made
public, DeAM has implemented procedures reasonably designed to encourage such
investors and recipients to keep such information confidential, and to prevent
those investors from trading on the basis of non-public holdings information.

There is no assurance that the Fund's policies and procedures with respect to
the disclosure of portfolio holdings information will protect the Fund from the
potential misuse of portfolio holdings information by those in possession of
that information.

                             MANAGEMENT OF THE FUND

Investment Advisor

DIMA, with headquarters at 345 Park Avenue, New York, New York, is part of
Deutsche Asset Management ("DeAM") the investment advisor for the Fund. Under
the supervision of the Board of Trustees of the Trust, DIMA makes the Fund's
investment decisions, buys and sells securities for the Fund and conducts
research that leads to these purchase and sale decisions. DIMA manages the
Fund's daily investment and business affairs subject to the policies established
by the Trust's Board of Trustees. DIMA, has more than 80 years of experience
managing mutual funds. DIMA provides a full range of investment advisory
services to institutional and retail clients. DIMA 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 Asset Management, Inc., 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. The term "DWS Scudder" is
the designation given to the products and services provided by DIMA and its
affiliates to the DWS Mutual Funds.

The Advisor provides investment counsel for many individuals and institutions,
including insurance companies, industrial corporations, and financial and
banking organizations, as well as providing investment advice to open- and
closed-end SEC registered funds.

The Advisor manages the Fund's daily investment and business affairs subject to
the policies established by the Fund's Board of Trustees. The Trustees of the
Trust have overall responsibility for the management of the Fund under
Massachusetts law.

Investment Management Agreement

Pursuant to an investment management agreement with the Fund (the "Agreement"),
the Advisor manages the Fund's investments, administers its business affairs,
furnishes office facilities and equipment, provides clerical and administrative
services and permits its officers and employees to serve without compensation as
trustees or officers of the Fund if elected to such positions. To the extent
permissible by law, the Advisor may appoint certain of its affiliates as
sub-advisors to perform certain of the Advisor's duties.

In certain cases, the investments for the Fund are managed by the same
individuals who manage one or more other mutual funds advised by the Advisor
that have similar names, objectives and investment styles. You should be aware
that the Fund is likely to differ from these other mutual funds in size, cash
flow pattern and tax matters. Accordingly, the holdings and performance of the
Fund can be expected to vary from those of these other mutual funds.

Certain investments may be appropriate for the Fund and also for other clients
advised by the Advisor. Investment decisions for the Fund 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. Frequently, 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, a particular security may be bought for one or more clients when one
or more other clients are selling the security. 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 equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by the Fund. Purchase and sale orders for the Fund may be combined with
those of other clients of the Advisor in the interest of achieving the most
favorable net results to the Fund.

The current Agreement dated April 5, 2002, was last renewed by the Trustees on
September 19, 2007. The Agreement continues in effect from year to year only if
its continuance is approved annually by the vote of a majority of those Trustees
who are not parties to such Agreement 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 Fund.

The Agreement may be terminated at any time without payment of penalty by either
party on sixty days written notice and automatically terminates in the event of
assignment.

Under the Agreement, the Advisor regularly provides the Fund with continuing
investment management consistent with the Fund's investment objective, policies
and restrictions and determines what securities shall be purchased, held or sold
and what portion of a Fund's assets shall be held uninvested, subject to the
Trust's Declaration of Trust, By-Laws, the 1940 Act, the Code and to the Fund's
investment objective, policies and restrictions, and subject, further, to such
policies and instructions as the Board of Trustees of the Trust may from time to
time establish. The Advisor also advises and assists the officers of the Trust
in taking such steps as are necessary or appropriate to carry out the decisions
of the Trustees and the appropriate committees of the Trustees regarding the
conduct of the business of the Fund. Under the Agreement, the Advisor may
delegate its duties to a subadvisor.

Under the Agreement, the Advisor also renders administrative services (not
otherwise provided by third parties) necessary for the Fund's operations as an
open-end investment company including, but not limited to, preparing reports and
notices to the Trustees and shareholders; supervising, negotiating contractual
arrangements with, and monitoring various third-party service providers to the
Fund (such as the Fund's transfer agent, pricing agents, custodian, accountants
and others); preparing and making filings with the SEC and other regulatory
agencies; assisting in the preparation and filing of the Fund's federal, state
and local tax returns; preparing and filing the Fund's federal excise tax
returns; assisting with investor and public relations matters; monitoring the
valuation of securities and the calculation of net asset value; monitoring the
registration of shares of the Fund under applicable federal and state securities
laws; maintaining the Fund's books and records to the extent not otherwise
maintained by a third party; assisting in establishing accounting policies of
the Fund; assisting in the resolution of accounting and legal issues;
establishing and monitoring the Fund's operating budget; processing the payment
of the Fund's bills; assisting the Fund in, and otherwise arranging for, the
payment of distributions and dividends; and otherwise assisting the Fund in the
conduct of its business, subject to the direction and control of the Trustees.

The Advisor pays the compensation and expenses of all Trustees, officers and
executive employees of the Fund affiliated with the Advisor and makes available,
without expense to the Trust, the services of such Trustees, officers and
employees of the Advisor as may duly be elected officers or Trustees of the
Trust, subject to their individual consent to serve and to any limitations
imposed by law and provides the Fund's office space and facilities.

Under its Agreement, the Fund is responsible for all of its other expenses
including: organizational costs, fees and expenses incurred in connection with
membership in investment company organizations; brokers' commissions; legal,
auditing and accounting expenses; insurance; taxes and governmental fees; the
fees and expenses of the Transfer Agent; any other expenses of issue, sale,
underwriting, distribution, redemption or repurchase of shares; the expenses of
and the fees for registering or qualifying securities for sale; the fees and
expenses of Trustees, officers and employees of the Fund who are not affiliated
with the Advisor; the cost of printing and distributing reports and notices to
shareholders; and the fees and disbursements of custodians. The Fund may arrange
to have third parties assume all or part of the expenses of sale, underwriting
and distribution of shares of the Fund. The Fund is also responsible for its
expenses of shareholders' meetings, the cost of responding to shareholders'
inquiries, and its expenses incurred in connection with litigation, proceedings
and claims and the legal obligation it may have to indemnify its officers and
Trustees of the Fund with respect thereto.

Pursuant to a sub-accounting and administrator agreement among the Advisor, DWS
Scudder Fund Accounting Corporation ("DWS-SFAC") and State Street Bank and Trust
Company ("SSB"), the Advisor has delegated certain administrative functions to
SSB under the Agreement. The costs and expenses of such delegation are borne by
the Advisor, not by the Fund.

The current advisory fee rates are payable monthly at the annual rate shown
below.

Average Daily Net Assets                                     DWS Balanced Fund
------------------------                                     -----------------

$0 - $1.50 billion                                                0.470%
$1.5 billion - $2 billion                                         0.445%
$2 billion - $3.5 billion                                         0.410%
$3.5 billion - $5.5 billion                                       0.400%
$5.5 billion - $7.5 billion                                       0.390%
$7.5 billion - $10 billion                                        0.380%
$10 billion - $12.5 billion                                       0.370%
Over $12.5 billion                                                0.360%

The advisory fee is payable monthly provided that the Fund will make such
interim payments as may be requested by the Advisor, not to exceed 75% of the
amount of the unpaid fee then accrued on the books of the Fund. All of the
Fund's expenses are paid out of gross investment income.

The advisory fees paid by the Fund for its last three fiscal years are shown in
the table below.

      Fiscal 2007            Fiscal 2006           Fiscal 2005
      -----------            -----------           -----------

      $ 8,509,900           $9,131,853           $10,227,855

Through November 17, 2008 for Class A shares and March 13, 2008 for Class B and
Class C shares, respectively, the Advisor has contractually agreed to waive all
or a portion of its management fee and reimburse or pay operating expenses of
the fund to the extent necessary to maintain the fund's total operating expenses
at 0.93%, 1.88% and 1.80% for Class A, Class B and Class C shares, respectively,
excluding certain expenses such as extraordinary expenses, taxes, brokerage and
interest.

In reviewing the terms of the Agreement and in discussions with the Advisor
concerning such Agreement, the Independent Trustees of the Trust, are
represented by independent counsel at the Fund's expense.

The 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 Fund in connection
with matters to which the Agreement relates, except a loss resulting from
willful misfeasance, 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 Agreement.

Officers and employees of the Advisor from time to time may have transactions
with various banks, including the Fund'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 Fund
relationships.

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

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

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.

Subadvisor to the Fund

Deutsche Asset Management International GmbH ("DeAMi"), an investment advisor
registered with the US Securities and Exchange Commission, will be the
subadvisor for a portion of the large cap value allocation of the Fund upon
shareholder approval of the sub-advisory agreement (the "Sub-Advisory
Agreement"). DeAMi, Mainzer Landstrasse 178-190, 60325 Frankfurt am Main,
Germany, will render investment advisory and management services to the Fund
pursuant to the terms of the Sub-Advisory Agreement between DeAMi and DIMA.
DeAMi is an affiliate of DIMA and a subsidiary of Deutsche Bank AG. Under the
terms of the Sub-Advisory Agreement, DeAMi will manage the investment and
reinvestment of a portion of the large cap value allocation of the Fund's
portfolio and will provide such investment advice, research and assistance as
DIMA may, from time to time, reasonably request.

DIMA will pay a fee to DeAMi for serving as subadvisor to the Fund at the annual
rates shown below:

                                                     Sub-Advisory Fee
Assets Managed by DeAMi (in Euros)         (as a % of average daily net assets)
----------------------------------         ------------------------------------

(euro)0 - (euro)250 million                                    0.300%
(euro)250 million - (euro)500 million                          0.200%
(euro)500 million - (euro)1 billion                            0.120%
(euro)1 billion - (euro)2.5 billion                            0.080%
(euro)2.5 billion - (euro)5 billion                            0.055%
(euro)5 billion - (euro)25 billion                             0.035%
(euro)25 billion - (euro)50 billion                            0.025%
over (euro)50 billion                                          0.015%

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.

The Sub-Advisory Agreement provides that DeAMi will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Sub-Advisory Agreement relates, except a loss
resulting from willful misconduct, bad faith or gross negligence on the part of
DeAMi in the performance of its duties or from reckless disregard by DeAMi of
its obligations and duties under the Sub-Advisory Agreement.

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 or 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 that 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 Fund's portfolio management team in the Fund 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 the Fund's most
recent fiscal year end.

                                                   Dollar Range of                    Dollar Range of All DWS
Name of Portfolio Manager                         Fund Shares Owned                      Fund Shares Owned
-------------------------                         -----------------                      -----------------

Gary Sullivan                                            $0                             $50,001 - $100,000
Inna Okounkova                                    $10,001 - $50,000                     $100,001 - $500,000
J. Richard Robben                                        $0                                $1 - $10,000
Jin Chen                                            $1 - $10,000                        $100,001 - $500,000
John Brennan                                             $0                                     $0
Julie Abbett                                             $0                             $50,001 - $100,000
Matthew MacDonald                                        $0                              $10,001 - $50,000
Matthias Knerr                                           $0                            $500,001 - $1,000,000
Robert Wang                                       $10,001 - $50,000                     $100,001 - $500,000
Thomas Picciochi                                  $10,001 - $50,000                     $50,001 - $100,000
William Chepolis                                         $0                             $100,001 - $500,000
Julie M. Van Cleave                                      $0                               Over $1,000,000
Thomas Schuessler*                                       $0                             $50,001 - $100,000

*        Thomas Schuessler is expected to join the Fund as a portfolio manager
         when the shareholders approve of the Sub-Advisory Agreement with DeAMi.

Conflicts of Interest

In addition to managing the assets of the Fund, the Fund'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
the Fund's most recent fiscal year end.

Other SEC Registered Investment Companies Managed:

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

Gary Sullivan                             11            $9,337,180,213               0                    $0
Inna Okounkova                            11            $2,745,352,575               0                    $0
J. Richard Robben                          1              $565,362,202               0                    $0
Jin Chen                                  23            $9,966,187,216               0                    $0
John Brennan                               1              $565,362,202               0                    $0
Julie Abbett                              23            $9,966,187,216               0                    $0
Matthew MacDonald                         15            $7,625,532,798               0                    $0
Matthias Knerr                             4            $3,908,616,290               0                    $0
Robert Wang                               39           $15,424,577,293               0                    $0
Thomas Picciochi                           9             $5,727,459,87               0                    $0
William Chepolis                          15            $7,625,532,798               0                    $0
Julie M. Van Cleave                        4            $4,014,609,038               0                    $0
Thomas Schuessler*                         2            $2,152,173,064               0                    $0

*        Thomas Schuessler is expected to join the Fund as a portfolio manager
         when the shareholders approve of the Sub-Advisory Agreement with DeAMi.

Other Pooled Investment Vehicles Managed:

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

Gary Sullivan                               0                       $0               0                         $0
Inna Okounkova                              4              $97,548,824               0                         $0
J. Richard Robben                           0                       $0               0                         $0
Jin Chen                                   12             $230,948,460               0                         $0
John Brennan                                0                       $0               0                         $0
Julie Abbett                               12             $230,948,460               0                         $0
Matthew MacDonald                           0                       $0               0                         $0
Matthias Knerr                              4              $92,233,860               0                         $0
Robert Wang                                26           $1,528,385,778               2               $460,266,313
Thomas Picciochi                            7           $1,136,657,103               2               $460,266,313
William Chepolis                            0                       $0               0                         $0
Julie M. Van Cleave                         1               $7,102,066               0                         $0
Thomas Schuessler*                          0                       $0               0                         $0

*         Thomas Schuessler is expected to join the Fund as a portfolio manager
          when the shareholders approve of the Sub-Advisory Agreement with
          DeAMi.

Other Accounts Managed:

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

Gary Sullivan                                0                      $0               0                        $0
Inna Okounkova                               0                      $0               0                        $0
J. Richard Robben                            0                      $0               0                        $0
Jin Chen                                     7            $604,328,039               0                        $0
John Brennan                                 0                      $0               0                        $0
Julie Abbett                                 7            $604,328,039               0                        $0
Matthew MacDonald                            0                      $0               0                        $0
Matthias Knerr                               2            $120,181,881               0                        $0
Robert Wang                                 47         $10,957,290,112               2               $89,740,331
Thomas Picciochi                            11            $490,011,315               2               $89,740,331
William Chepolis                             0                      $0               0                        $0
Julie M. Van Cleave                          9            $703,140,652               0                        $0
Thomas Schuessler*                           2          $6,500,000,000               1             $1,200,000,00

*         Thomas Schuessler is expected to join the Fund as a portfolio manager
          when the shareholders approve of the Sub-Advisory Agreement with
          DeAMi.

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 Fund. 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 Fund
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 Fund and also for other
         clients advised by the Advisor, including other client accounts managed
         by the Fund's portfolio management team. Investment decisions for the
         Fund 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 Fund 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 Fund. Purchase and sale orders for the Fund may be combined
         with those of other clients of the Advisor in the interest of achieving
         the most favorable net results to the Fund 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 Fund 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.

Codes of Ethics

The Fund, the Advisor and the Fund's principal underwriter have each adopted
codes of ethics under Rule 17j-1 under the 1940 Act. Board members, officers of
the Trust and employees of the Advisor and principal underwriter are permitted
to make personal securities transactions, including transactions in securities
that may be purchased or held by the Fund, subject to requirements and
restrictions set forth in the applicable Code of Ethics. The Advisor's

Code of Ethics contains provisions and requirements designed to identify and
address certain conflicts of interest between personal investment activities and
the interests of the Fund. Among other things, the Advisor's Code of Ethics
prohibits certain types of transactions absent prior approval, imposes time
periods during which personal transactions may not be made in certain
securities, and requires the submission of duplicate broker confirmations and
quarterly reporting of securities transactions. Additional restrictions apply to
portfolio managers, traders, research analysts and others involved in the
investment advisory process. Exceptions to these and other provisions of the
Advisor's Code of Ethics may be granted in particular circumstances after review
by appropriate personnel.

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 Scudder 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 overseeing the DWS Funds continue to be independent of
DeAM; the Chairmen of the DWS Funds' Boards of Trustees 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 FINRA) announced final agreements in which
Deutsche Investment Management Americas Inc. ("DIMA"), Deutsche Asset
Management, Inc. ("DAMI") and Scudder Distributors, Inc. ("DWS-SDI") (now known
as DWS Scudder Distributors, Inc.) settled administrative proceedings regarding
disclosure of brokerage allocation practices in connection with sales of the
Scudder Funds' (now known as the DWS Scudder 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 DWS-SDI'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
Scudder Fund shares. These directed brokerage practices were discontinued in
October 2003.

Under the terms of the settlements, in which DIMA, DAMI and DWS-SDI neither
admitted nor denied any of the regulators' findings, DIMA, DAMI and DWS-SDI
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 DWS-SDI 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-scudder.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.

                             FUND SERVICE PROVIDERS

Distributor

Pursuant to the Underwriting and Distribution Services Agreement (the
"Distribution Agreement"), DWS Scudder Distributors, Inc. ("DWS-SDI" or the
"Distributor"), 222 South Riverside Plaza, Chicago, Illinois 60606, an affiliate
of the Advisor, is the principal underwriter, distributor and administrator for
the Class A, Class B, Class C and Institutional Class shares of the Fund and
acts as the agent of the Fund in the continuous offering of its shares. The
continuance of the Distribution Agreement for the Fund, dated April 5, 2002, was
last continued by the Trustees on September 18, 2007.

The Distribution Agreement continues in effect from year to year so long as such
continuance is approved for each class at least annually by a vote of the Board
of Trustees of the Trust, including the Independent Trustees who have no direct
or indirect financial interest in the Distribution Agreement.

The Distribution Agreement automatically terminates in the event of its
assignment and may be terminated for a class at any time without penalty by the
Fund or by DWS-SDI upon 60 days notice. Termination by the Fund with respect to
a class may be by vote of (i) a majority of the Independent Trustees and who
have no direct or indirect financial interest in the Distribution Agreement, or
(ii) a "majority of the outstanding voting securities" of the class of the Fund,
as defined under the 1940 Act. All material amendments must be approved by the
Board of Trustees in the manner described above with respect to the continuation
of the Agreement. The provisions concerning continuation, amendment and
termination of a Distribution Agreement are on a series by series and
class-by-class basis.

DWS-SDI bears all of its expenses of providing services pursuant to the
Distribution Agreement, including the payment of any commissions. The Fund pays
the cost for the prospectuses and shareholder reports to be typeset and printed
for existing shareholders, and DWS-SDI, as principal underwriter, pays for the
printing and distribution of copies thereof used in connection with the offering
of shares to prospective investors. DWS-SDI also pays for supplementary sales
literature and advertising costs. As indicated under "Purchase and Redemption of
Shares," DWS-SDI retains the sales charge upon the purchase of Class A shares
and pays or allows concessions or discounts to firms for the sale of the Fund's
shares. DWS-SDI receives compensation from the Fund as principal underwriter for
Class A Class B, Class C and Institutional shares.

Shareholder and administrative services are provided to the Fund on behalf of
Class A, Class B and Class C shareholders, under a Shareholder Services
Agreement (the "Services Agreement") with DWS-SDI. The Services Agreement
continues in effect from year to year so long as such continuance is approved
for the Fund at least annually by a vote of the Board of the Trust, including
the Independent Trustees who have no direct or indirect financial interest in
the Services Agreement. The Services Agreement automatically terminates in the
event of its assignment and may be terminated at any time without penalty by the
Fund or by DWS-SDI upon 60 days notice. Termination with respect to the Class A,
B or C shares of the Fund may be by a vote of (i) the majority of the
Independent Trustees who have no direct or indirect financial interest in the
Services Agreement, or (ii) a "majority of the outstanding voting securities" of
the Class A, B or C shares, as defined under the 1940 Act. The Services
Agreement may not be amended for a class to increase materially the fee to be
paid by the Fund without approval of a majority of the outstanding voting
securities of such class of the Fund, and all material amendments must in any
event be approved by the Board of Trustees in the manner described above with
respect to the continuation of the Services Agreement.

Under the Services Agreement, DWS-SDI may provide or appoint various
broker-dealer firms and other service or administrative firms ("firms") to
provide information and services to investors in the Fund. Typically, DWS-SDI
appoints firms that provide services and facilities for their customers or
clients who are investors in the Fund. Firms appointed by DWS-SDI provide such
office space and equipment, telephone facilities and personnel as is necessary
or beneficial for providing information and services to their clients. Such
services and assistance may include, but are not limited to, establishing and
maintaining accounts and records, processing purchase and redemption
transactions, answering routine inquiries regarding the Fund, providing
assistance to clients in changing dividend and investment options, account
designations and addresses and such other administrative services as may be
agreed upon from time to time and permitted by applicable statute, rule or
regulation.

DWS-SDI bears all of its expenses of providing those services pursuant to the
Services Agreement, including the payment of a service fee to firms (as defined
below). As indicated under the Rule 12b-1 Plan, DWS-SDI receives compensation
from the Fund for its services under the Services Agreement.

Rule 12b-1 Plans

The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (the "Rule
12b-1 Plan") that provides for fees payable as an expense of the Class B shares
and Class C shares, that are used by DWS-SDI to pay for distribution services
for those classes. Pursuant to the Rule 12b-1 Plan, shareholder and
administrative services are provided to the Fund on behalf of its Class A, B and
C shareholders under the Fund's Services Agreement with DWS-SDI. Because 12b-1
fees are paid out of Fund assets on an ongoing basis, they will, over time,
increase the cost of an investment and may cost more than other types of sales
charges.

The Rule 12b-1 distribution plans for Class B and Class C shares provide
alternative methods for paying sales charges and may help the Fund grow or
maintain asset levels to provide operational efficiencies and economies of
scale. Rule 12b-1 service plans provide compensation to DWS-SDI or
intermediaries for post-sales servicing. Since the Distribution Agreement
provides for fees payable as an expense of Class B shares and Class C shares
that are used by DWS-SDI to pay for distribution and services for those classes,
the Distribution Agreement is approved and reviewed separately for Class B
shares and Class C shares in accordance with Rule 12b-1 under the 1940 Act,
which regulates the manner in which an investment company may, directly or
indirectly, bear the expenses of distributing its shares. The Distribution
Agreements may not be amended to increase the fee to be paid by the Fund with
respect to a class without approval by a majority of the outstanding voting
securities of such class of the Fund. Similarly, the Services Agreement is
approved and reviewed separately for Class A shares, Class B shares and Class C
shares in accordance with Rule 12b-1.

If a Rule 12b-1 Plan is terminated in accordance with its terms, the obligation
of the Fund to make payments to DWS-SDI pursuant to the Rule 12b-1 Plan will
cease and the Fund will not be required to make any payments not previously
accrued past the termination date. Thus, there is no legal obligation for the
Fund to pay any expenses incurred by DWS-SDI other than fees previously accrued
and payable under a Rule 12b-1 Plan, if for any reason the Rule 12b-1 Plan is
terminated in accordance with its terms. Future fees under the Rule 12b-1 Plan
may or may not be sufficient to cover DWS-SDI for its expenses incurred. On the
other hand, under certain circumstances, DWS-SDI might collect in the aggregate
over certain periods more in fees under the Rule 12b-1 Plan than it has expended
over that same period in providing distribution services for the Fund. In
connection with Class B shares, for example, if shares of the Fund were to
appreciate (resulting in greater asset base against which Rule 12b-1 fees are
charged) and sales of the Fund's shares were to decline (resulting in lower
expenditures by DWS-SDI under the Rule 12b-1 Plan), fees payable could exceed
expenditures. This may also happen over certain periods shorter than the life of
the Rule 12b-1 Plan simply due to the timing of expenses incurred by DWS-SDI
that is not matched to the timing of revenues received (e.g., a sales commission
may be paid by DWS-SDI related to an investment in year 1, while the Rule 12b-1
fee to DWS-SDI related to that investment may accrue during year 1 through year
6 prior to conversion of the investment to Class A shares). As a result, if
DWS-SDI's expenses are less than the Rule 12b-1 fees, DWS-SDI will retain its
full fees and make a profit.

Class B and Class C Shares

Distribution Services. For its services under the Distribution Agreement,
DWS-SDI receives a fee from the Fund under its Rule 12b-1 Plan, payable monthly,
at the annual rate of 0.75% of average daily net assets of the Fund attributable
to its Class B shares. This fee is accrued daily as an expense of Class B
shares. DWS-SDI also receives any contingent deferred sales charges paid with
respect to Class B shares. DWS-SDI currently compensates firms for sales of
Class B shares at a commission rate of 3.75%.

For its services under the Distribution Agreement, DWS-SDI receives a fee from
the Fund under its Rule 12b-1 Plan, payable monthly, at the annual rate of 0.75%
of average daily net assets of the Fund attributable to Class C shares. This fee
is accrued daily as an expense of Class C shares. DWS-SDI generally advances to
firms the first year distribution fee at a rate of 0.75% of the purchase price
of Class C shares. However, DWS-SDI does not advance the first year distribution
fee to firms for sales of Class C shares to employer sponsored employee benefit
plans using the OmniPlus subaccount record keeping system made available through
ADP, Inc. under an alliance with DWS-SDI and its affiliates. For periods after
the first year, DWS-SDI currently pays firms for sales of Class C shares a
distribution fee, payable quarterly, at an annual rate of 0.75% of net assets
attributable to Class C shares maintained and serviced by the firm. This fee
continues until terminated by DWS-SDI or the applicable Fund. DWS-SDI also
receives any contingent deferred sales charges paid with respect to Class C
shares.

The Distributor has temporarily agreed to eliminate the 12b-1 distribution fee
for Class B shares only.

Class A, Class B and Class C Shares

Shareholder Services. For its services under the Services Agreement, DWS-SDI
receives a shareholder services fee from the Fund under a Rule 12b-1 Plan,
payable monthly, at an annual rate of up to 0.25% of the average daily net
assets of Class A, B and C shares of the Fund.

With respect to Class A shares of the Fund, DWS-SDI pays each firm a service
fee, payable quarterly, at an annual rate of up to 0.25% of the net assets in
Fund accounts that it maintains and services attributable to Class A shares of
the Fund, commencing with the month after investment. With respect to Class B
and Class C shares of the Fund, DWS-SDI generally advances to firms the
first-year service fee at a rate of up to 0.25% of the purchase price of such
shares. However, DWS-SDI does not advance the first year service fee to firms
for sales of Class C shares to employer sponsored employee benefit plans using
the OmniPlus subaccount record keeping system made available through ADP, Inc.
under an alliance with DWS-SDI and its affiliates. For periods after the first
year, DWS-SDI currently intends to pay firms a service fee at a rate of up to
0.25% (calculated monthly and paid quarterly) of the net assets attributable to
Class B and Class C shares of the Fund maintained and serviced by the firm.
Firms to which service fees may be paid include affiliates of DWS-SDI. In
addition DWS-SDI may, from time to time, pay certain firms from it own resources
additional amounts for ongoing administrative services and assistance provided
to their customers and clients who are shareholders of the Fund.

DWS-SDI also may provide some of the above services and may retain any portion
of the fee under the Services Agreement not paid to firms to compensate itself
for shareholder or administrative functions performed for the Fund. Currently,
the shareholder services fee payable to DWS-SDI is payable at an annual rate of
up to 0.25% of net assets based upon Fund assets in accounts for which a firm
provides administrative services and at the annual rate of 0.15% of net assets
based upon Fund assets in accounts for which there is no firm of record (other
than DWS-SDI) listed on a Fund's records. The effective shareholder services fee
rate to be charged against all assets of the Fund while this procedure is in
effect will depend upon the proportion of Fund assets that is held in accounts
for which a firm of record provides shareholder services. The Board of the
Trust, in its discretion, may approve basing the fee to DWS-SDI at the annual
rate of 0.25% on all Fund assets in the future.

Expenses of the Fund paid in connection with the Rule 12b-1 Plans for each class
of shares are set forth below. A portion of the marketing and sales and
operating expenses shown below could be considered overhead expenses.

                                             12b-1 Compensation to Underwriter for the
                                            Twelve-Month Period Ended September 30, 2007
                                            --------------------------------------------

                                           12b-1           12b-1
                                        Distribution    Shareholder        12b-1 Compensation
                                            Fees       Services Fees       Paid to Firms
                                            ----       -------------       -------------

DWS Balanced     Class A                         $347              $0              $3,226,998
Fund
                 Class B                           $0        $146,242                $160,742
                 Class C                     $241,482          $2,478                 $78,179

                                                      Other Expenses Paid by Underwriter for the
                                                     Twelve-Month Period Ended September 30, 2007
                                                     --------------------------------------------

                                          Advertising,
                                        Sales, Literature                   Marketing
                                         and Promotional     Prospectus     and Sales     Postage    Imputed
                                            Materials         Printing      Expenses     and Mailing   Interest
                                            ---------         --------      --------     -----------   --------

DWS Balanced     Class A                        $3,154,789      $180,102        $15,410      $40,494     $12,334
Fund
                 Class B                          $251,583       $15,980         $1,405       $3,543      $1,109
                 Class C                          $344,937       $17,157         $1,504       $3,753      $1,154

The following table shows, for Class A shares, the aggregate amount of
underwriting commissions paid to DWS-SDI, the amount in commissions it paid out
to brokers and the amount of underwriting commissions retained by DWS-SDI.

                                                             Aggregate                              Aggregate
                                                         Commissions Paid       Aggregate          Commissions
                                        Aggregate Sales  to Unaffiliated   Commissions Paid to    Retained by
Fund                       Fiscal Year    Commissions          Firms         Affiliated Firms        DWS-SDI
----                       -----------    -----------          -----         ----------------        -------

DWS Balanced Fund
                              2007         $222,000          $174,000            $18,000             $30,000
                              2006         $311,000          $226,000            $43,000             $42,000
                              2005         $347,000          $272,000            $27,000             $48,000

Certain Trustees of the Trust or officers of the Fund are also directors or
officers of the Advisor or DWS-SDI, as indicated under "Officers and Trustees."

Custodian

The Fund employs SSB, 225 Franklin Street, Boston, Massachusetts 02110, as
custodian. SSB has entered into agreements with foreign subcustodians approved
by the Trustees pursuant to Rule 17f-5 under the 1940 Act. SSB uses Deutsche
Bank AG, an affiliate of the Advisor, as subcustodian ("DB Subcustodian") in
certain countries. To the extent the Fund holds any securities in the countries
in which SSB uses DB Subcustodian as a subcustodian, those securities will be
held by DB Subcustodian as part of a larger omnibus account in the name of SSB
(the "Omnibus Account"). For its services, DB Subcustodian receives (1) an
annual fee based on a percentage of the average daily net assets of the Omnibus
Account and (2) transaction charges with respect to transactions that occur
within the Omnibus Account. For the fiscal year ended October 31, 2007 the
custodian received $100,356.

Transfer Agent and Shareholder Service Agent

DWS Scudder Investments Service Company ("DWS-SISC"), 210 West 10th Street,
Kansas City, Missouri 64105-1614, an affiliate of the Advisor, is the transfer
agent, dividend-paying agent and shareholder service agent for all classes of
DWS funds.

The Transfer Agent receives an annual service fee for each account of the Fund,
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 $3.46 per account
(as of October 2006, 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 Fund. 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 Fund or
are paid directly by the Fund. 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 Fund with the
prior approval of the Fund's Board.

Pursuant to a sub-transfer agency agreement between DWS-SISC and DST Systems,
Inc. ("DST") 333 West 11th Street, Kansas, Missouri 64105, DWS-SISC has
delegated certain transfer agent, dividend-paying agent and shareholder
servicing agent functions to DST. The costs and expenses of such delegation are
borne by DWS-SISC, not by the Fund.

The Fund, or the Advisor (including any affiliate of the Advisor), or both, may
pay unaffiliated third parties for providing recordkeeping and other
administrative services with respect to accounts of participants in retirement
plans or other beneficial owners of Fund shares whose interests are generally
held in an omnibus account.

Fund Accounting Agent

DWS Scudder Fund Accounting Corporation ("DWS-SFAC"), Two International Place,
Boston, Massachusetts, 02110, a subsidiary of the Advisor, is responsible for
determining net asset value per share of the Fund and maintaining the portfolio
and general accounting records for the Fund. Currently, DWS-SFAC receives no fee
for its services to the Fund. However, subject to Board approval, at some time
in the future, DWS-SFAC may seek payment for its services under this agreement.

Pursuant to an agreement between DWS-SFAC and State Street Bank and Trust
Company ("SSB"), DWS-SFAC has delegated certain fund accounting functions to SSB
under the fund accounting agreement. The costs and expenses of such delegation
are borne by the DWS-SFAC, not by the Fund.

Legal Counsel

Vedder Price P.C., 222 North LaSalle Street, Chicago, IL 60601, serves as legal
counsel to the Fund and its Independent Trustees.

Independent Registered Public Accounting Firm

The financial highlights of the Fund included in the Fund's prospectuses and the
financial statements of the Fund incorporated by reference in this Statement of
Additional Information have been so included or incorporated by reference in
reliance on the report of Ernst & Young LLP, independent registered public
accounting firm, 200 Clarendon Street, Boston, MA 02116, given on the authority
of said firm as experts in auditing and accounting. Ernst & Young LLP audits the
financial statements of the Fund and provides other audit, tax and related
services. Shareholders will receive annual audited financial statements and
semi-annual unaudited financial statements.

                             PORTFOLIO TRANSACTIONS

The Advisor is generally responsible for placing the orders for the purchase and
sale of portfolio securities, including the allocation of brokerage. With
respect to those funds for which a sub-investment advisor manages the fund's
investments, references in this section to the "Advisor" should be read to mean
the Sub-Advisor, except as noted below.

The policy of the Advisor in placing orders for the purchase and sale of
securities for the Fund 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 Fund 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 Fund
to their customers. However, the Advisor does not consider sales of shares of
the Fund as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund and, accordingly, has implemented policies and
procedures reasonably designed to prevent its traders from considering sales of
shares of the Fund as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund.

The Advisor is permitted by Section 28(e) of the Securities Exchange Act of
1934, as amended ("1934 Act"), when placing portfolio transactions for a Fund,
to cause the Fund 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 a Fund 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 a Fund. Services received from
broker-dealers that executed securities transactions for a Portfolio will not
necessarily be used by the Advisor specifically to service such Fund.

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 Funds 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 Fund 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 the Fund 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 Fund, in other cases it is believed that the ability to
engage in volume transactions will be beneficial to the Fund.

DIMA and its affiliates and the Fund'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, the
Sub-Advisor or one of its affiliates) may act as a broker for the Fund and
receive brokerage commissions or other transaction-related compensation from the
Fund 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 Fund's 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 Fund a rate
consistent with that charged to comparable unaffiliated customers in similar
transactions.

The following shows total brokerage commissions paid for the past three fiscal
years.

For the fiscal years ended October 31, 2007, October 31, 2006 and October 31,
2005, the Fund paid $294,635, $1,534,763 and $221,400, respectively, in total
brokerage commissions.

Securities of Regular Broker-Dealers. The Fund is required to identify any
securities of its "regular brokers or dealers" (as such term is defined in Rule
10b-1 of the 1940 Act) that the Fund has acquired during the most recent fiscal
year. As of October 31, 2007 the Fund held the following securities of its
regular brokers or dealers:

Name of Regular Broker or Dealer or Parent (Issuer)              Value of Securities Owned as of October 31, 2007
---------------------------------------------------              ------------------------------------------------

AMERICAN INTERNATIONAL GROUP, INC.                                              $1,477,000
AMERIPRISE FINANCIAL, INC.                                                      $3,640,000
APOLLO INVESTMENT CORP.                                                         $1,081,000
BANCFIRST CORP.                                                                    $55,000
BANK OF AMERICA CORP.                                                          $18,008,000
CENTER FINANCIAL CORP.                                                             $58,000
CITIGROUP INC.                                                                 $50,124,000
CITY HOLDINGS CO.                                                                 $178,000
COHEN & STEERS, INC.                                                               $98,000
E*TRADE FINANCIAL CORP.                                                         $1,260,000
FIRST NIAGARA FINANCIAL GROUP INC.                                                $165,000
FIRSTMERIT CORP.                                                                  $426,000
THE GOLDMAN SACHS GROUP, INC.                                                  $10,512,000
HANCOCK HOLDING CO.                                                               $164,000
IRWIN FINANCIAL CORP.                                                             $126,000
JPMORGAN CHASE & CO.                                                           $34,133,000
LEHMAN BROTHERS HOLDINGS, INC.                                                  $9,343,000
MORGAN STANLEY                                                                 $13,342,000
PACIFIC CAPITAL BANCORP                                                           $958,000
POPULAR NORTH AMERICA INC.                                                      $2,957,000
PROSPECT CAPITAL CORP.                                                            $244,000
STATE STREET CORP.                                                              $5,073,000
STERLING BANCSHARES INC.                                                          $956,000
STERLING FINANCIAL CORP.                                                          $702,000
SUNTRUST BANKS, INC.                                                            $6,650,000
SVB FINANCIAL GROUP                                                               $684,000
TAYLOR CAP GROUP INC.                                                             $124,000
TRUSTMARK CORP.                                                                    $51,000
UBS AG                                                                          $7,034,000
WACHOVIA CORP.                                                                 $25,959,000
WADDELL & REED FINANCIAL, INC.                                                  $1,026,000
WELLS FARGO & CO.                                                              $32,222,000
WEST COAST BANCORP                                                                 $60,000
WSFS FINANCIAL CORP                                                               $271,000
AMERICANWEST BANCORP.                                                             $122,000
CATHAY GENERAL BANCORP.                                                           $551,000
CITIZENS REPUBLIC BANCORP., INC.                                                  $365,000
DOWNEY FINANCIAL CORP.                                                            $888,000
FIRST MIDWEST BANCORP., INC.                                                      $455,000
NATIONAL PENN BANCSHARES, INC.                                                    $150,000
UCBH HOLDINGS, INC.                                                               $567,000

Portfolio Turnover

Portfolio turnover rate is defined by the SEC as the ratio of the lesser of
sales or purchases to the monthly average value of such securities owned during
the year, excluding all securities whose remaining maturities at the time of
acquisition were one year or less.

Higher levels of activity by the Fund result in higher transaction costs and may
also result in taxes on realized capital gains to be borne by the Fund's
shareholders. Purchases and sales are made whenever necessary, in the Advisor's
discretion, to meet the Fund's objective.

Portfolio turnover rates for the two most recent fiscal periods for the Fund are
as follows:

                           Fiscal Year Ended               Fiscal Year Ended
                           October 31, 2007*               October 31, 2006
                           -----------------               ----------------

DWS Balanced Fund                188%                             98%

*        The portfolio turnover increase was in part due to the fund's portfolio
         management change in December of 2007. The Fund also has established a
         10% allocation to international equities and added new underlying
         sleeves within the US equities.

                        PURCHASE AND REDEMPTION OF SHARES

General Information

Policies and procedures affecting transactions in Fund shares can be changed at
any time without notice, subject to applicable law. Transactions may be
contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the Fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

A distribution will be reinvested in shares of the same Fund and class if the
distribution check is returned as undeliverable.

Orders will be confirmed at a price based on the net asset value of the Fund
(including any applicable sales charge) next determined after receipt in good
order by DWS-SDI of the order accompanied by payment. Orders received by dealers
or other financial services firms prior to the determination of net asset value
and received in good order by DWS-SDI prior to the determination of net asset
value will be confirmed at a price based on the net asset value next determined
after receipt by DWS-SDI ("trade date").

Certificates. Share certificates will not be issued. Share certificates now in a
shareholder's possession may be sent to the Transfer Agent for cancellation and
book-entry credit to such shareholder's account. Certain telephone and other
procedures require book-entry holdings. Shareholders with outstanding
certificates bear the risk of loss.

Use of Financial Services Firms. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem the Fund's shares,
including higher minimum investments, and may assess transaction or other fees.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services. Firms also may hold a Fund's shares in
nominee or street name as agent for and on behalf of their customers. In such
instances, the Fund's transfer agent, DWS-SISC (the "Transfer Agent") or
sub-transfer agent will have no information with respect to or control over the
accounts of specific shareholders. Such shareholders may obtain access to their
accounts and information about their accounts only from their firm. Certain of
these firms may receive compensation from the Fund through the Shareholder
Service Agent for record-keeping and other expenses relating to these nominee
accounts. In addition, certain privileges with respect to the purchase and
redemption of shares or the reinvestment of dividends may not be available
through such firms. Some firms may participate in a program allowing them access
to their clients' accounts for servicing including, without limitation,
transfers of registration and dividend payee changes; and may perform functions
such as generation of confirmation statements and disbursement of cash
dividends. Such firms, including affiliates of DWS-SDI, may receive compensation
from the Fund through the Shareholder Service Agent for these services.

The Fund has authorized one or more financial service institutions, including
certain members of the Financial Industry Regulatory Authority ("FINRA") other
than the Distributor ("financial institutions"), to accept purchase and
redemption orders for the Fund's shares. Such financial institutions may also
designate other parties, including plan administrator intermediaries, to accept
purchase and redemption orders on the Fund's behalf. Orders for purchases or
redemptions will be deemed to have been received by the Fund when such financial
institutions or, if applicable, their authorized designees accept the orders.
Subject to the terms of the contract between the Fund and the financial
institution, ordinarily orders will be priced at the Fund's net asset value next
computed after acceptance by such financial institution or its authorized
designees and accepted by the Fund. Further, if purchases or redemptions of the
Fund's shares are arranged and settlement is made at an investor's election
through any other authorized financial institution, that financial institution
may, at its discretion, charge a fee for that service. The Board of Trustees and
the Distributor, also the Fund's principal underwriter, each has the right to
limit the amount of purchases by, and to refuse to sell to, any person. The
Trustees and the Distributor may suspend or terminate the offering of shares of
the Fund at any time for any reason.

DWS-SDI has adopted an Incentive Plan (the "Plan") covering wholesalers that are
regional vice presidents ("DWS Scudder Wholesalers"). Generally, DWS Scudder
Wholesalers market shares of the DWS funds to financial advisors, who in turn
may recommend that investors purchase shares of a DWS fund. The Plan is an
incentive program that combines a monthly incentive component with a quarterly
strategic bonus component. Under the Plan, DWS Scudder Wholesalers will receive
a monetary monthly incentive based on the amount of sales generated from their
marketing of the funds, and that incentive will differ depending on the product
category of the fund. Each fund is assigned to one of four product categories --
"Core," "Strategic," "Satellite" or "Non-CSS" -- taking into consideration,
among other things, the following criteria, where applicable:

o        The Fund's 3-year performance;
o        The Fund's Morningstar rating;
o        Market size for the fund category;
o        The Fund's size, including sales and redemptions of the Fund's shares;
o        The length of time the Fund's Portfolio Managers have managed the Fund;
         and
o        The Fund's consistency with DWS Scudder's branding.

This information and other factors are presented to a committee comprised of
representatives from various groups within DWS Scudder, who review on a
quarterly basis the funds assigned to each product category described above, and
make any changes to those assignments at that time. No one factor, whether
positive or negative, determines a fund's placement in a given category; all
these factors together are considered, and the designation of funds in the Core,
Strategic and Satellite categories represents management's judgment based on the
above criteria. In addition, management may consider a fund's profile over the
course of several review periods before making a change to its category
assignment. These category assignments will be posted quarterly to the DWS
funds' Web site at www.dws-scudder.com, approximately one month after the end of
each quarter. DWS Scudder Wholesalers will receive the highest compensation for
Core and Strategic funds, less for Satellite funds and the lowest for Non-CSS
funds. The level of compensation among these categories may differ
significantly.

In the normal course of business, DWS Scudder will from time to time introduce
new funds into the DWS family of funds. As a general rule, all new funds will be
placed in the Strategic compensation category for a minimum period of four
consecutive quarters, and DWS Scudder Wholesalers will be paid at a rate that is
equivalent to that of the Core Fund category. After that four quarter period,
each new fund in the Strategic category will be reviewed by the committee and
either assigned to one of the four categories or continued as a Strategic fund
at that time.

The prospect of receiving, or the receipt of, additional compensation by a DWS
Scudder Wholesaler under the Plan may provide an incentive to favor marketing
the Core, Strategic or Satellite funds over the Non-CSS funds. The Plan,
however, will not change the price that you pay for shares of a fund. The DWS
Scudder Compliance Department monitors DWS Scudder Wholesaler sales and other
activity in an effort to detect unusual activity in the context of the
compensation structure under the Plan. However, investors may wish to take the
Plan and the product category of the fund into account when considering
purchasing a fund or evaluating any recommendations relating to fund shares.

Telephone and Electronic Transaction Procedures. Shareholders have various
telephone, Internet, wire and other electronic privileges available. The Fund or
its agents will not be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized instructions pursuant to these privileges if the Fund
or its agents reasonably believe, based upon reasonable verification procedures,
that the instructions were genuine. Verification procedures may include
recording instructions, requiring certain identifying information before acting
upon instructions and sending written confirmations. During periods when it is
difficult to contact the Shareholder Service Agent, it may be difficult to use
telephone, wire and other privileges.

QuickBuy and QuickSell. QuickBuy and QuickSell permits the transfer of money via
the Automated Clearing House System (minimum $50 and maximum $250,000) from or
to a shareholder's bank, savings and loan, or credit union account in connection
with the purchase or redemption of Fund shares. Shares purchased by check or
through QuickBuy and QuickSell or Direct Deposit may not be redeemed under this
privilege until such Shares have been owned for at least 10 calendar days.
QuickBuy and QuickSell cannot be used with passbook savings accounts or for
certain tax-deferred plans.

Share Pricing. Purchases will be filled at the net asset value per share next
computed after receipt of the application in good order. The net asset value of
shares of each Fund is calculated at 4:00 p.m. Eastern time or the close of
business on each day the New York Stock Exchange (the "Exchange") is open for
trading. Orders received after the close of regular trading on the Exchange will
be executed at the next business day's net asset value. If the order has been
placed by a member of FINRA, other than the Distributor, it is the
responsibility of the member broker, rather than the Fund, to forward the
purchase order to Transfer Agent in Kansas City by the close of regular trading
on the Exchange.

Dividend Payment Option. Investors may have dividends and distributions
automatically deposited to their predesignated bank account through DWS
Scudder's Dividend Payment Option request form. Shareholders whose predesignated
checking account of record is with a member bank of Automated Clearing House
Network (ACH) can have income and capital gain distributions automatically
deposited to their personal bank account usually within three business days
after the Fund pays its distribution. A Dividend Payment Option request form can
be obtained by visiting our Web site at: www.dws-scudder.com or calling (800)
621-1048. Confirmation Statements will be mailed to shareholders as notification
that distributions have been deposited.

Tax-Sheltered Retirement Plans. The Shareholder Service Agent provides
retirement plan services and documents and DWS-SDI can establish investor
accounts in any of the following types of retirement plans:

o        Traditional, Roth and Education IRAs. This includes Savings Incentive
         Match Plan for Employees of Small Employers ("SIMPLE"), Simplified
         Employee Pension Plan ("SEP") IRA accounts and prototype documents.

o        403(b)(7) Custodial Accounts. This type of plan is available to
         employees of most non-profit organizations.

o        Prototype money purchase pension and profit-sharing plans may be
         adopted by employers.

Brochures describing these plans as well as model defined benefit plans, target
benefit plans, 457 plans, 401(k) plans, simple 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
Additional fees and transaction policies and procedures may apply to such plans.
Investors should consult with their own tax advisors before establishing a
retirement plan.

Purchases

The Fund reserves the right to withdraw all or any part of the offering made by
its prospectuses and to reject purchase orders for any reason. Also, from time
to time, the Fund may temporarily suspend the offering of any class of its
shares to new investors. During the period of such suspension, persons who are
already shareholders of such class of the Fund may be permitted to continue to
purchase additional shares of such class and to have dividends reinvested.

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 person who opens an account. For
more information, please see "Policies You Should Know About" in the Fund's
prospectuses.

The Fund may waive the minimum for purchases by Trustees, directors, officers or
employees of the Fund or the Advisor, subadvisors and their affiliates.

Financial Services Firms' Compensation. Banks and other financial services firms
may provide administrative services related to order placement and payment to
facilitate transactions in shares of the Fund for their clients, and DWS-SDI may
pay them a transaction fee up to the level of the discount or commission
allowable or payable to dealers.

DWS-SDI may, from time to time, pay or allow to firms a 1% commission on the
amount of shares of the Fund sold under the following conditions: (i) the
purchased shares are held in a DWS Scudder IRA account, (ii) the shares are
purchased as a direct "roll over" of a distribution from a qualified retirement
plan account maintained on the subaccount record keeping system maintained for
DWS-branded plans by ADP, Inc. under an alliance with DWS-SDI and its
affiliates, (iii) the registered representative placing the trade is a member of
Executive Council, a group of persons designated by DWS-SDI in acknowledgment of
their dedication to the employee benefit plan area; and (iv) the purchase is not
otherwise subject to a commission.

In addition to the discounts or commissions described herein and in the
prospectuses, DWS-SDI, the Advisor, or its affiliates may pay or allow
additional discounts, commissions or promotional incentives, in the form of
cash, to firms that sell shares of the Fund. In some instances, such amounts may
be offered only to certain firms that sell or are expected to sell during
specified time periods certain minimum amounts of shares of the Fund, or other
funds underwritten by DWS-SDI.

Upon notice to all dealers, DWS-SDI may re-allow to dealers up to the full
applicable Class A sales charge during periods and for transactions specified in
such notice and such re-allowances may be based upon attainment of minimum sales
levels. During periods when 90% or more of the sales charge is re-allowed, such
dealers may be deemed to be underwriters as that term is defined in the 1933
Act.

DWS-SDI may at its discretion compensate investment dealers or other financial
services firms in connection with the sale of Class A shares of the Fund in
accordance with the Large Order NAV Purchase Privilege and one of the three
compensation schedules up to the following amounts:

               Compensation Schedule #1:                     Compensation Schedule #2: DWS
               -------------------------                     -----------------------------
        Retail Sales and DWS Scudder Flex Plan(1)              Scudder Retirement Plans(2)
        -----------------------------------------              ---------------------------
                                                                            As a Percentage of
Amount of                         As a Percentage of Net     Amount of             Net
Shares Sold                             Asset Value         Shares Sold        Asset Value
-----------                             -----------         -----------        -----------
$1 million to $3 million                   1.00%          Over $3 million      0.00%-0.50%
Over $3 million to $50 million             0.50%                 --                  --
Over $50 million                           0.25%                 --                  --

                Compensation Schedule #3:
                -------------------------
                DWS Scudder Choice Plan(3)
                --------------------------
                                  As a Percentage of Net
Amount of Shares Sold                   Asset Value
---------------------                   -----------

All Amounts                                1.00%

(1)      For purposes of determining the appropriate commission percentage to be
         applied to a particular sale under the foregoing schedule, DWS-SDI will
         consider the cumulative amount invested by the purchaser in a Fund and
         other DWS Funds including purchases pursuant to the "Combined
         Purchases," "Letter of Intent" and "Cumulative Discount" features
         referred to below.

(2)      Compensation Schedules 2 and 3 apply to employer sponsored employee
         benefit plans using the OmniPlus subaccount record keeping system made
         available through ADP, Inc. under an alliance with DWS-SDI and its
         affiliates.

(3)      DWS-SDI compensates UBS Financial 0.50%.

DWS-SDI compensates firms for sales of Class B shares at the time of sale at a
commission rate of up to 3.75% of the amount of Class B shares purchased.
DWS-SDI is compensated by the Fund for services as distributor and principal
underwriter for Class B shares. Except as provided below, for sales of Class C
shares, DWS-SDI advances to firms the first year distribution fee at a rate of
0.75% of the purchase price of such shares, and, for periods after the first
year, DWS-SDI currently pays firms for sales of Class C shares a distribution
fee, payable quarterly, at an annual rate of 0.75% of net assets attributable to
Class C shares maintained and serviced by the firm. For sales of Class C shares
to employer sponsored employee benefit plans using the OmniPlus subaccount
record keeping system made available through ADP, Inc. under an alliance with
DWS-SDI and its affiliates, DWS-SDI does not advance the first year distribution
fee and for periods after the date of sale, DWS-SDI currently pays firms a
distribution fee, payable quarterly, at an annual rate of 0.75% based on net
assets as of the last business day of the month attributable to Class C shares
maintained and serviced by the firm. DWS-SDI is compensated by the Fund for
services as distributor and principal underwriter for Class C shares.

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 Fund shares or the retention and/or servicing of
investors and Fund 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 each
Fund, to financial advisors in connection with the sale and/or distribution of
Fund shares or the retention and/or servicing of Fund investors and Fund 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 each Fund (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 each Fund with "shelf space" or access to a
third party platform or fund offering list, or other marketing programs
including, without limitation, inclusion of each Fund 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 each Fund 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 Fund serviced and maintained by the financial advisor, .10% to
..25% of sales of the Fund attributable to the financial advisor, a flat fee of
$12,500 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 Fund or of any particular share class
of the Fund. 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
Fund.

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, each Fund 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

A G Edwards & Sons Inc.
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
First Clearing/Wachovia Securities
HD Vest Investment Securities, Inc.
ING group
John Hancock Distributors LLC
LaSalle Financial Services, Inc. (dba ABN Amro)
Linsco/Private Ledger Corp.
M.L. Stern & Co.
Marsh Insurance and Investment Company
Meridien Financial Group
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley
Oppenheimer & Co., Inc.
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.)
Bear, Stearns Securities Corp.
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
Huntleigh Securities
Lincoln Investment Planning
LPL Financial Services
Mellon Financial Markets LLC
Penson Financial Services
Pershing Choice Platform
ProFunds Distributors, Inc.
Ridge Clearing & Outsourcing Solutions
Romano Brothers and Company
SAMCO Capital Markets
Smith Moore & Company
Sungard Institutional Brokerage Inc.
US Bancorp
UBS
William Blair & Company

Channel: Third Party Insurance Platforms

Allstate Life Insurance Company of New York
Ameritas Life Insurance Group
American General Life Insurance Company
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
Mutual of America 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.

Class A Purchases. The public offering price of Class A shares for purchasers
choosing the initial sales charge alternative is the net asset value plus a
sales charge, as set forth below.

                                                           Sales Charge
                                                           ------------
                                                                                         Allowed to Dealers
                                           As a Percentage of    As a Percentage of     as a Percentage of
Amount of Purchase                         Offering Price*,**    Net Asset Value***        Offering Price
------------------                         ------------------    ------------------        --------------
Less than $50,000                                 5.75%                 6.10%                   5.20%
$50,000 but less than $100,000                    4.50                  4.71                    4.00
$100,000 but less than $250,000                   3.50                  3.63                    3.00
$250,000 but less than $500,000                   2.60                  2.67                    2.25
$500,000 but less than $1 million                 2.00                  2.04                    1.75
$1 million and over                                 .00****               .00****              *****

*        The offering price includes the sales charge.

**       Because of rounding in the calculation of the offering price, the
         actual front-end sales charge paid by an investor may be higher or
         lower than the percentage noted above.

***      Rounded to the nearest one-hundredth percent.

****     Redemption of shares may be subject to a contingent deferred sales
         charge as discussed below.

*****    Commission is payable by DWS-SDI as discussed below.

Class A Quantity Discounts. An investor or the investor's dealer or other
financial services firm must notify the Shareholder Service Agent or DWS-SDI
whenever a quantity discount or reduced sales charge is applicable to a
purchase. In order to qualify for a lower sales charge, all orders from an
organized group will have to be placed through a single investment dealer or
other firm and identified as originating from a qualifying purchaser.

Combined Purchases. The Fund's Class A shares may be purchased at the rate
applicable to the sales charge discount bracket attained by combining same day
investments in Class A shares of any DWS Funds that bear a sales charge.

Letter of Intent. The reduced sales charge for Class A shares, as shown in the
applicable prospectus, also apply to the aggregate amount of purchases of Class
A shares of DWS Funds that bear a sales charge made by any purchaser within a
24-month period under a written Letter of Intent ("Letter") provided by DWS-SDI.
The Letter, which imposes no obligation to purchase or sell additional Class A
shares, provides for a price adjustment depending upon the actual amount
purchased within such period. The Letter provides that the first purchase
following execution of the Letter must be at least 5% of the amount of the
intended purchase, and that 5% of the amount of the intended purchase normally
will be held in escrow in the form of shares pending completion of the intended
purchase. If the total investments under the Letter are less than the intended
amount and thereby qualify only for a higher sales charge than actually paid,
the appropriate number of escrowed shares are redeemed and the proceeds used
toward satisfaction of the obligation to pay the increased sales charge. The
Letter for an employer-sponsored employee benefit plan maintained on the
subaccount record keeping system available through ADP, Inc. under an alliance
with DWS-SDI and its affiliates may have special provisions regarding payment of
any increased sales charge resulting from a failure to complete the intended
purchase under the Letter. A shareholder may include the value (at the maximum
offering price, which is determined by adding the maximum applicable sales load
charged to the net asset value) of all Class A shares of such DWS Funds held of
record as of the initial purchase date under the Letter as an "accumulation
credit" toward the completion of the Letter, but no price adjustment will be
made on such shares.

Class A Cumulative Discount. Class A shares of the Fund may also be purchased at
the rate applicable to the discount bracket attained by adding to the cost of
shares being purchased, the value of all Class A shares of DWS Funds that bear a
sales charge (computed at the maximum offering price at the time of the purchase
for which the discount is applicable) already owned by the investor or his or
her immediate family member (including the investor's spouse or life partner and
children or stepchildren age 21 or younger).

For purposes of the Combined Purchases, Letter of Intent and Cumulative Discount
features described above, employer sponsored employee benefit plans using the
Flex subaccount record keeping system available through ADP, Inc. under an
alliance with DWS-SDI and its affiliates may include: (a) Money Market Funds as
"DWS Funds," (b) all classes of shares of any DWS Fund and (c) the value of any
other plan investments, such as guaranteed investment contracts and employer
stock, maintained on such subaccount record keeping system. Once eligible plan
assets under this provision reach the $1,000,000 threshold, a later decline in
assets below the $1,000,000 threshold will not affect the plan's ability to
continue to purchase Class A shares at net asset value.

Class A NAV Sales. Class A shares may be sold at net asset value to:

(a)      a current or former director or trustee of Deutsche or DWS mutual
         funds;

(b)      an employee (including the employee's spouse or life partner and
         children or stepchildren age 21 or younger) of Deutsche Bank or its
         affiliates or of a subadvisor to any fund in the DWS family of funds or
         of a broker-dealer authorized to sell shares of the Fund or service
         agents of the Fund;

(c)      certain professionals who assist in the promotion of DWS mutual funds
         pursuant to personal services contracts with DWS-SDI, for themselves or
         members of their families. DWS-SDI in its discretion may compensate
         financial services firms for sales of Class A shares under this
         privilege at a commission rate of 0.50% of the amount of Class A shares
         purchased;

(d)      any trust, pension, profit-sharing or other benefit plan for only such
         persons listed under the preceding paragraphs (a) and (b);

(e)      persons who purchase such shares through bank trust departments that
         process such trades through an automated, integrated mutual fund
         clearing program provided by a third party clearing firm;

(f)      selected employees (including their spouses or life partners and
         children or stepchildren age 21 or younger) of banks and other
         financial services firms that provide administrative services related
         to order placement and payment to facilitate transactions in shares of
         the Fund for their clients pursuant to an agreement with DWS-SDI or one
         of its affiliates. Only those employees of such banks and other firms
         who as part of their usual duties provide services related to
         transactions in Fund shares qualify;

(g)      unit investment trusts sponsored by Ranson & Associates, Inc. and
         unitholders of unit investment trusts sponsored by Ranson & Associates,
         Inc. or its predecessors through reinvestment programs described in the
         prospectuses of such trusts that have such programs;

(h)      through certain investment advisors registered under the Investment
         Advisers Act of 1940 and other financial services firms acting solely
         as agent for their clients, that adhere to certain standards
         established by DWS-SDI, including a requirement that such shares be
         sold for the benefit of their clients participating in an investment
         advisory program or agency commission program under which such clients
         pay a fee to the investment advisor or other firm for portfolio
         management or agency brokerage services. Such shares are sold for
         investment purposes and on the condition that they will not be resold
         except through redemption or repurchase by the Fund;

(i)      employer sponsored employee benefit plans using the Flex subaccount
         recordkeeping system ("Flex Plans") made available through ADP under an
         alliance with DWS-SDI and its affiliates, established prior to October
         1, 2003, provided that the Flex Plan is a participant-directed plan
         that has not less than 200 eligible employees;

(j)      investors investing $1 million or more, either as a lump sum or through
         the "Combined Purchases," "Letter of Intent" and "Cumulative Discount"
         features referred to above (collectively, the "Large Order NAV Purchase
         Privilege"). The Large Order NAV Purchase Privilege is not available if
         another net asset value purchase privilege is available;

(k)      defined contribution investment only plans with a minimum of $1,000,000
         in plan assets regardless of the amount allocated to the DWS funds;

In addition, Class A shares may be sold at net asset value in connection with:

(l)      the acquisition of the assets of or merger or consolidation with
         another investment company, or to shareholders in connection with the
         investment or reinvestment of income and capital gain dividends, and
         under other circumstances deemed appropriate by DWS-SDI and consistent
         with regulatory requirements; and

(m)      a direct "roll over" of a distribution from a Flex Plan or from
         participants in employer sponsored employee benefit plans maintained on
         the OmniPlus subaccount record keeping system made available through
         ADP, Inc. under an alliance with DWS-SDI and its affiliates into a DWS
         Scudder IRA;

(n)      reinvestment of fund dividends and distributions;

(o)      exchanging an investment in Class A shares of another fund in the DWS
         family of funds for an investment in the fund.

Class A shares also may be purchased at net asset value in any amount by members
of the plaintiff class in the proceeding known as Howard and Audrey Tabankin, et
al. v. Kemper Short-Term Global Income Fund, et al., Case No. 93 C 5231 (N.D.
IL). This privilege is generally non-transferable and continues for the lifetime
of individual class members and for a ten-year period for non-individual class
members. To make a purchase at net asset value under this privilege, the
investor must, at the time of purchase, submit a written request that the
purchase be processed at net asset value pursuant to this privilege specifically
identifying the purchaser as a member of the "Tabankin Class." Shares purchased
under this privilege will be maintained in a separate account that includes only
shares purchased under this privilege. For more details concerning this
privilege, class members should refer to the Notice of (i) Proposed Settlement
with Defendants; and (ii) Hearing to Determine Fairness of Proposed Settlement,
dated August 31, 1995, issued in connection with the aforementioned court
proceeding. For sales of Fund shares at net asset value pursuant to this
privilege, DWS-SDI may in its discretion pay investment dealers and other
financial services firms a concession, payable quarterly, at an annual rate of
up to 0.25% of net assets attributable to such shares maintained and serviced by
the firm. A firm becomes eligible for the concession based upon assets in
accounts attributable to shares purchased under this privilege in the month
after the month of purchase and the concession continues until terminated by
DWS-SDI. The privilege of purchasing Class A shares of the Fund at net asset
value under this privilege is not available if another net asset value purchase
privilege also applies.

Class B Purchases. Class B shares of the Fund are offered at net asset value. No
initial sales charge is imposed. Class B shares sold without an initial sales
charge allow the full amount of the investor's purchase payment to be invested
in Class B shares for his or her account. Class B shares have a contingent
deferred sales charge of 4.00% that declines over time (for shares sold within
six years of purchase) and Rule 12b-1 fees, as described in the Fund's
Prospectus and SAI. Class B shares automatically convert to Class A shares after
six years.

Class C Purchases. Class C shares of the Fund are offered at net asset value. No
initial sales charge is imposed which allows the full amount of the investor's
purchase payment to be invested in Class C shares for his or her account. Class
C shares are subject to a contingent deferred sales charge of 1.00% (for shares
sold within one year of purchase) and Rule 12b-1 fees, as described in the
Fund's prospectus and this SAI.

Multi-Class Suitability. DWS-SDI has established the following procedures
regarding the purchase of Class A, Class B and Class C shares. Orders to
purchase Class B shares of $100,000 or more and orders to purchase Class C
shares of $500,000 or more will be declined with the exception of orders
received from financial representatives acting for clients whose shares will be
held in an omnibus account and employer-sponsored employee benefit plans using
the subaccount record keeping system ("System") maintained for DWS-branded plans
under an alliance with DWS-SDI and its affiliates ("DWS Scudder Flex Plans" and
"DWS Scudder Choice Plans").

The following provisions apply to DWS Scudder Flex Plans and DWS Scudder Choice
Plans.

a.       Class B Share DWS Scudder Flex Plans. Class B shares have not been sold
         to DWS Scudder Flex Plans that were established on the System after
         October 1, 2003. Orders to purchase Class B shares for a DWS Scudder
         Flex Plan established on the System prior to October 1, 2003 that has
         regularly been purchasing Class B shares will be invested instead in
         Class A shares at net asset value when the combined subaccount value in
         DWS Funds or other eligible assets held by the plan is $100,000 or
         more. This provision will be imposed for the first purchase after
         eligible plan assets reach the $100,000 threshold. A later decline in
         assets below the $100,000 threshold will not affect the plan's ability
         to continue to purchase Class A shares at net asset value.

 b.      Class C Share DWS Scudder Flex Plans. Orders to purchase Class C shares
         for a DWS Scudder Flex Plan, regardless of when such plan was
         established on the System, will be invested instead in Class A shares
         at net asset value when the combined subaccount value in DWS Funds or
         other eligible assets held by the plan is $1,000,000 or more. This
         provision will be imposed for the first purchase after eligible plan
         assets reach the $1,000,000 threshold. A later decline in assets below
         the $1,000,000 threshold will not affect the plan's ability to continue
         to purchase Class A shares at net asset value.

c.       Class C Share DWS Scudder Choice Plans. Orders to purchase Class C
         shares for a DWS Scudder Choice Plan that has been regularly purchasing
         Class C shares will be invested instead in Class A shares at net asset
         value when the combined subaccount value in DWS Funds or other eligible
         assets held by the plan is $1,000,000 or more. This provision will be
         imposed for purchases made beginning in the month after eligible plan
         assets reach the $1,000,000 threshold. In addition, as a condition to
         being permitted to use the Choice Plan platform, plans must agree that,
         within one month after eligible plan assets reach the $1,000,000
         threshold, all existing Class C shares held in the plan will be
         automatically converted to Class A shares.

The procedures above do not reflect in any way the suitability of a particular
class of shares for a particular investor and should not be relied upon as such.
A suitability determination must be made by investors with the assistance of
their financial representative.

Purchase of Institutional Class Shares. Information on how to buy Institutional
Class shares is set forth in the section entitled "Buying and Selling Shares" in
the Fund's prospectus. The following supplements that information. The minimum
initial investment for Institutional Class shares is $1,000,000. There is no
minimum subsequent investment requirement for the Institutional Class shares.
The minimum initial investment may be waived in certain circumstances. The
minimum amounts may be changed at any time in management's discretion.

To sell shares in a retirement account other than an IRA, your request must be
made in writing, except for exchanges to other eligible funds in the DWS family
of funds, which can be requested by phone or in writing.

Automatic Investment Plan. A shareholder may purchase additional shares of the
Fund through an automatic investment program. With the Direct Deposit Purchase
Plan ("Direct Deposit"), investments are made automatically (minimum $500 and
maximum $250,000 for initial investments and a minimum of $50 and maximum of
$250,000 for subsequent investments) from the shareholder's account at a bank,
savings and loan or credit union into the shareholder's Fund account.
Termination by a shareholder will become effective within thirty days after the
Shareholder Service Agent has received the request. The Fund may immediately
terminate a shareholder's Direct Deposit in the event that any item is unpaid by
the shareholder's financial institution.

Minimum Subsequent Investment Policies. For current shareholders of Class A, B
or C shares there is a $50 minimum investment requirement for subsequent
investments in the fund. There is no minimum subsequent investment requirement
in Class A shares for investments on behalf of participants in certain fee-based
and wrap programs offered through financial intermediaries approved by the
Advisor or for Institutional Class shareholders. There is no minimum subsequent
investment required for Institutional Class Shares.

Payroll Investment Plans. A shareholder may purchase Class A, B, or C shares of
the Fund through Payroll Direct Deposit or Government Direct Deposit. Under
these programs, all or a portion of a shareholder's net pay or government check
is invested each payment period. A shareholder may terminate participation in
these programs by giving written notice to the shareholder's employer or
government agency, as appropriate. (A reasonable time to act is required.) The
Fund is not responsible for the efficiency of the employer or government agency
making the payment or any financial institutions transmitting payments.

It is our policy to offer purchase privileges to current or former directors or
trustees of the Deutsche or DWS mutual funds, employees, their spouses or life
partners and children or stepchildren age 21 or younger of Deutsche Bank or its
affiliates or a subadvisor to any fund in the DWS family of funds or a
broker-dealer authorized to sell shares of the Fund. Qualified individuals will
generally be allowed to purchase shares in the class with the lowest expense
ratio, usually the Institutional Class shares. If the Fund does not offer
Institutional Class shares, these individuals will be allowed to buy Class A
shares at NAV. The Fund also reserves the right to waive the minimum account
balance requirement for employee and director accounts. Fees generally charged
to IRA accounts will be charged to accounts of employees and directors.

Expedited Purchase Procedures for Existing Shareholders. Shareholders of other
DWS Funds who have submitted an account application and have certified a tax
identification number, clients having a regular investment counsel account with
the Advisor or its affiliates and members of their immediate families, officers
and employees of the Advisor or of any affiliated organization and their
immediate families, members of FINRA, and banks may open an account by wire by
calling (800) 621-1048 for instructions. The investor must send a duly completed
and signed application to the Fund promptly. A subsequent purchase order may be
placed by established shareholders (except by DWS Scudder Individual Retirement
Account (IRA), DWS Scudder Horizon Plan, DWS Scudder Profit Sharing and Money
Purchase Pension Plans, DWS Scudder 401(k) and DWS Scudder 403(b) Plan holders),
members of FINRA, and banks.

Redemptions

Redemption fee. The Fund imposes a redemption fee of 2% of the total redemption
amount (calculated at net asset value, without regard to the effect of any
contingent deferred sales charge; any contingent deferred sales charge is also
assessed on the total redemption amount without regard to the assessment of the
2% redemption fee) on all fund shares redeemed or exchanged within 15 days of
buying them (either by purchase or exchange). The redemption fee is paid
directly to the Fund, and is designed to encourage long-term investment and to
offset transaction and other costs associated with short-term or excessive
trading. For purposes of determining whether the redemption fee applies, shares
held the longest time will be treated as being redeemed first and shares held
the shortest time will be treated as being redeemed last. The redemption fee is
applicable to fund shares purchased either directly or through a financial
intermediary, such as a broker-dealer. Transactions through financial
intermediaries typically are placed with the Fund on an omnibus basis and
include both purchase and sale transactions placed on behalf of multiple
investors. These purchase and sale transactions are generally netted against one
another and placed on an aggregate basis; consequently the identities of the
individuals on whose behalf the transactions are placed generally are not known
to a fund. For this reason, the Fund has undertaken to notify financial
intermediaries of their obligation to assess the redemption fee on customer
accounts and to collect and remit the proceeds to the Fund. However, due to
operational requirements, the intermediaries' methods for tracking and
calculating the fee may be inadequate or differ in some respects from the Fund's
method.

General. Policies and procedures affecting transactions in Fund shares can be
changed at any time without notice, subject to applicable law. Transactions may
be contingent upon proper completion of application forms and other documents by
shareholders and their receipt by the Fund's agents. Transaction delays in
processing (and changing account features) due to circumstances within or beyond
the control of the Fund and its agents may occur. Shareholders (or their
financial service firms) are responsible for all losses and fees resulting from
bad checks, cancelled orders or the failure to consummate transactions effected
pursuant to instructions reasonably believed to be genuine.

The fund 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 portfolio or the fair
determination of the value of a 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. A request for
repurchase (confirmed redemption) may be communicated by a shareholder through a
financial services firm to DWS-SDI, which firms must promptly submit orders to
be effective.

Redemption requests must be unconditional. Redemption requests (and a stock
power for certificated shares) must be duly endorsed by the account holder. As
specified in the prospectuses, signatures may need to be guaranteed by a
commercial bank, trust company, savings and loan association, federal savings
bank, member firm of a national securities exchange or other financial
institution permitted by SEC rule. Additional documentation may be required,
particularly from institutional and fiduciary account holders, such as
corporations, custodians (e.g., under the Uniform Transfers to Minors Act),
executors, administrators, trustees or guardians.

If the proceeds of the redemption (prior to the imposition of any contingent
deferred sales charge) are $100,000 or less and the proceeds are payable to the
shareholder of record at the address of record, normally a telephone request or
a written request by any one account holder without a signature guarantee is
sufficient for redemptions by individual or joint account holders, and trust,
executor and guardian account holders, provided the trustee, executor or
guardian is named in the account registration. Other institutional account
holders may exercise this special privilege of redeeming shares by telephone
request or written request without signature guarantee subject to the same
conditions as individual account holders, provided that this privilege has been
pre-authorized by the institutional account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. This privilege may not be
used to redeem shares held in certificated form and may not be used if the
shareholder's account has had an address change within 15 days of the redemption
request.

Wires. Delivery of the proceeds of a wire redemption of $250,000 or more may be
delayed by the Fund for up to seven days if the Fund or the Shareholder Service
Agent deems it appropriate under then-current market conditions. The ability to
send wires is limited by the business hours and holidays of the firms involved.
The Fund is not responsible for the efficiency of the federal wire system or the
account holder's financial services firm or bank. The account holder is
responsible for any charges imposed by the account holder's firm or bank. To
change the designated account to receive wire redemption proceeds, send a
written request to the Fund Shareholder Service Agent with signatures guaranteed
as described above or contact the firm through which Fund shares were purchased.

Automatic Withdrawal Plan. An owner of $5,000 or more of a class of the Fund's
shares at the offering price (net asset value plus, in the case of Class A
shares the initial sales charge) may provide for the payment from the owner's
account of any requested dollar amount to be paid to the owner or a designated
payee monthly, quarterly, semiannually or annually. The $5,000 minimum account
size is not applicable to IRAs. The minimum periodic payment is $50. The maximum
annual rate at which shares, subject to CDSC may be redeemed is 12% of the net
asset value of the account. Shares are redeemed so that the payee should receive
payment approximately the first of the month. Investors using this Plan must
reinvest Fund distributions.

Non-retirement plan shareholders may establish an Automatic Withdrawal Plan (the
"Withdrawal Plan") to receive monthly, quarterly or periodic redemptions from
his or her account for any designated amount of $50 or more. Shareholders may
designate which day they want the automatic withdrawal to be processed. The
check amounts may be based on the redemption of a fixed dollar amount, fixed
share amount, percent of account value or declining balance. The Withdrawal Plan
provides for income dividends and capital gains distributions, if any, to be
reinvested in additional shares. Shares are then liquidated as necessary to
provide for withdrawal payments. Since the withdrawals are in amounts selected
by the investor and have no relationship to yield or income, payments received
cannot be considered as yield or income on the investment and the resulting
liquidations may deplete or possibly extinguish the initial investment and any
reinvested dividends and capital gains distributions. Any such requests must be
received by a Fund's transfer agent ten days prior to the date of the first
automatic withdrawal. An Automatic Withdrawal Plan may be terminated at any time
by the shareholder, the Trust or its agent on written notice, and will be
terminated when all shares of the Fund under the Withdrawal Plan have been
liquidated or upon receipt by the Trust of notice of death of the shareholder.

The purchase of Class A shares while participating in an automatic withdrawal
plan will ordinarily be disadvantageous to the investor because the investor
will be paying a sales charge on the purchase of shares at the same time that
the investor is redeeming shares upon which a sales charge may have already been
paid. Therefore, the Fund will not knowingly permit additional investments of
less than $2,000 if the investor is at the same time making systematic
withdrawals.

Contingent Deferred Sales Charge (CDSC). The following example will illustrate
the operation of the CDSC. Assume that an investor makes a single purchase of
$10,000 of the Fund's Class B shares and that 16 months later the value of the
shares has grown by $1,000 through reinvested dividends and by an additional
$1,000 of share appreciation to a total of $12,000. If the investor were then to
redeem the entire $12,000 in share value, the CDSC would be payable only with
respect to $10,000 because neither the $1,000 of reinvested dividends nor the
$1,000 of share appreciation is subject to the charge. The charge would be at
the rate of 3.00% ($300) because it was in the second year after the purchase
was made.

The rate of the CDSC is determined by the length of the period of ownership.
Investments are tracked on a monthly basis. The period of ownership for this
purpose begins the first day of the month in which the order for the investment
is received. For example, an investment made in March of the year of investment
will be eligible for the second year's charge if redeemed in or after March of
the following year. In the event no specific order is requested when redeeming
shares subject to a CDSC, the redemption will be made first from shares
representing reinvested dividends and then from the earliest purchase of shares.
DWS-SDI receives any CDSC directly. The charge will not be imposed upon
redemption of reinvested dividends or share appreciation.

The Class A CDSC will be waived in the event of:

(a)      redemptions by a participant-directed qualified retirement plan
         described in Code Section 401(a), a participant-directed non-qualified
         deferred compensation plan described in Code Section 457 or a
         participant-directed qualified retirement plan described in Code
         Section 403(b)(7) which is not sponsored by a K-12 school district;

(b)      redemptions by employer-sponsored employee benefit plans using the
         subaccount record keeping system made available through ADP, Inc. under
         an alliance with DWS-SDI and its affiliates;

(c)      redemption of shares of a shareholder (including a registered joint
         owner) who has died or is disabled (under certain circumstances);

(d)      redemption of shares of a shareholder (including a registered joint
         owner) who after purchase of the shares being redeemed becomes totally
         disabled (as evidenced by a determination by the federal Social
         Security Administration);

(e)      redemptions under the Fund's Automatic Withdrawal Plan at a maximum of
         12% per year of the net asset value of the account;

(f)      redemptions of shares whose dealer of record at the time of the
         investment notifies DWS-SDI that the dealer waives the discretionary
         commission applicable to such Large Order NAV Purchase; and

(g)      redemptions for certain loan advances, hardship provisions or returns
         of excess contributions from retirement plans.

The Class B CDSC will be waived for the circumstances set forth in items (c),
(d), (e) and (g) for Class A shares. In addition, this CDSC will be waived:

(h)      for redemptions made pursuant to any IRA systematic withdrawal based on
         the shareholder's life expectancy including, but not limited to,
         substantially equal periodic payments described in Internal Revenue
         Code Section 72(t)(2)(A)(iv) prior to age 59 1/2;

(i)      for redemptions to satisfy required minimum distributions after age 70
         1/2 from an IRA account (with the maximum amount subject to this waiver
         being based only upon the shareholder's DWS Scudder IRA accounts); and

(j)      in connection with the following redemptions of shares held by employer
         sponsored employee benefit plans maintained on the subaccount record
         keeping system made available through ADP under an alliance with
         DWS-SDI and its affiliates: (1) to satisfy participant loan advances
         (note that loan repayments constitute new purchases for purposes of the
         CDSC and the conversion privilege), (2) in connection with retirement
         distributions (limited at any one time to 12% of the total value of
         plan assets invested in the Fund), (3) in connection with distributions
         qualifying under the hardship provisions of the Internal Revenue Code,
         (4) representing returns of excess contributions to such plans and (5)
         in connection with direct "roll over" distributions from a Flex Plan
         into a DWS Scudder IRA under the Class A net asset value purchase
         privilege.

The Class C CDSC will be waived for the circumstances set forth in items (b),
(c), (d), (e) and (g) for Class A shares and for the circumstances set forth in
items (h) and (i) for Class B shares. In addition, this CDSC will be waived for:

(k)      redemption of shares by an employer sponsored employee benefit plan
         that offers funds in addition to DWS Funds and whose dealer of record
         has waived the advance of the first year administrative service and
         distribution fees applicable to such shares and agrees to receive such
         fees quarterly; and

(l)      redemption of shares purchased through a dealer-sponsored asset
         allocation program maintained on an omnibus record-keeping system
         provided the dealer of record had waived the advance of the first year
         administrative services and distribution fees applicable to such shares
         and has agreed to receive such fees quarterly.

In-kind Redemptions. The Fund reserves the right to honor any request for
redemption or repurchase by making payment in whole or in part in readily
marketable securities. These securities will be chosen by the Fund and valued as
they are for purposes of computing the Fund's net asset value. A redeeming
shareholder who receives such securities will be subject to federal income tax
in the same manner as if a cash distribution had been received. A shareholder
may incur transaction expenses in converting these securities to cash.

Exchanges

Shareholders may request a exchange of their shares for shares of the
corresponding class of other DWS Funds without imposition of a sales charge,
subject to the provisions below. For purposes of calculating any CDSC, amounts
exchanged retain their original cost and purchase date.

Shares of money market funds that were acquired by purchase (not including
shares acquired by dividend reinvestment) are subject to the applicable sales
charge on exchange. Certain series of DWS Target Fund are available on exchange
only during the offering period for such series as described in the applicable
prospectus. Tax Free Money Fund -- Investment Class, NY Tax-Free Money Fund --
Investment Class, Treasury Money Fund -- Investment Class, Money Market Fund --
Investment Class, Cash Management Fund Institutional, Cash Reserves Fund
Institutional, Treasury Money Fund -- Institutional Class, Cash Reserve Fund,
Inc. Prime Series, Tax-Exempt California Money Market Fund, Cash Account Trust
and Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with DWS-SDI. All exchanges among
money funds must meet applicable investor eligibility and investment
requirements. Exchanges may only be made for funds that are available for sale
in the shareholder's state of residence. Currently, Tax-Exempt California Money
Market Fund is available for sale only in California.

Shareholders must obtain prospectuses of the funds they are exchanging into from
dealers, other firms or DWS-SDI. Exchanges are taxable transactions for federal
income tax purposes.

Automatic Exchange Plan. The owner of $1,000 or more of any class of shares of a
DWS Fund may authorize the automatic exchange of a specified amount ($50
minimum) of such shares for shares of the same class of another such DWS Fund.
Exchanges will be made automatically until the shareholder or the Fund
terminates the privilege. Exchanges are subject to the terms and conditions
described above.

Multi-Class Conversions. For purposes of conversion to Class A shares, shares
purchased through the reinvestment of dividends and other distributions paid
with respect to Class B shares in a shareholder's fund account will be converted
to Class A shares on a pro rata basis.

                                    DIVIDENDS

The Fund intends to distribute dividends from its net investment income
(excluding short-term capital gains) quarterly in March, June, September and
December. The Fund intends to distribute net realized capital gains after
utilization of capital loss carryforwards, if any, in December to prevent
application of a federal excise tax. An additional distribution may be made, if
necessary.

Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared.

Dividends paid by the Fund with respect to each class of its shares will be
calculated in the same manner, at the same time and on the same day.

The level of income dividends per share (as a percentage of net asset value)
will be lower for Class B and Class C shares than for Class A shares primarily
as a result of the distribution fee applicable to Class B and Class C.
Distributions of capital gains, if any, will be paid in the same amount for each
class.

Income and capital gain dividends, if any, of the Fund will be credited to
shareholder accounts in full and fractional shares of the same class of the Fund
at net asset value on the reinvestment date, except that, upon written request
to the Shareholder Service Agent, a shareholder may select one of the following
options:

1.       To receive income and short-term capital gain dividends in cash and
         long-term capital gain dividends in shares of the same class at net
         asset value; or

2.       To receive income and capital gain dividends in cash.

Dividends will be reinvested in shares of the same class of the Fund unless
shareholders indicate in writing that they wish to receive them in cash. The
Fund will reinvest dividend checks (and future dividends) in shares of that same
Fund and class if checks are returned as undeliverable. Dividends and other
distributions of the Fund in the aggregate amount of $10 or less are
automatically reinvested in shares of the Fund unless the shareholder requests
that such policy not be applied to the shareholder's account.

If an investment is in the form of a retirement plan, all dividends and capital
gains distributions must be reinvested into the shareholder's account.

If a shareholder has elected to reinvest any dividends and/or other
distributions, such distributions will be made in shares of the Fund and
confirmations will be mailed to the shareholder. If a shareholder has chosen to
receive cash, a check will be sent. Distributions of investment company taxable
income and net realized capital gains are taxable, whether made in shares or
cash.

The distribution is accompanied by a brief explanation of the form and character
of the distribution. The characterization of distributions on such
correspondence may differ from the characterization for federal tax purposes. In
January of each year the Fund issues to each shareholder a statement of the
federal income tax status of all distributions in the prior calendar year.

The Fund may at any time vary its foregoing dividend practices 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 its Board determines appropriate under the then
current circumstances. In particular, and without limiting the foregoing, the
Fund may make additional distributions of net investment income or net capital
gain in order to satisfy the minimum distribution requirements contained in the
Code.

                                      TAXES

The following is intended to be a general summary of certain US federal income
tax consequences of investing in the Fund. It is not intended as a complete
discussion of all such consequences, nor does it purport to deal with all
categories of investors. This discussion reflects the applicable tax laws of the
United States as of the date of this Statement of Additional Information, which
tax laws may change or be subject to new interpretation by the courts or the
IRS, possibly with retroactive effect. Investors are therefore advised to
consult with their tax advisors before making an investment in the Fund.

Federal Taxation. The Fund has elected to be treated as a regulated investment
company under Subchapter M of the Code, and has qualified each year as such
since its inception. The Fund intends to continue to so qualify in each taxable
year as required under the Code so that it will not be subject to federal income
tax on the income and gains that it distributes to shareholders. In order to
qualify as a regulated investment company, the Fund must meet certain
requirements regarding the source of its income, the diversification of its
assets and the distribution of its income. The Fund must derive at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, gains from the sale of stock, securities and foreign
currencies and other income (including but not limited to gains from options,
futures, or forward contracts) derived with respect to its business of investing
in such stock, securities, or currencies and net income derived from qualified
publicly traded partnerships. The Fund must diversify its holdings so that, at
the end of each quarter of its taxable year, (i) at least 50% of the market
value of the Fund's assets is represented by cash and cash items, US government
securities, securities of other regulated investment companies, and other
securities limited in respect of any one issuer to a value not greater than 5%
of the value of the Fund's total assets and to not more than 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities (other than those of the US
government or other regulated investment companies) of any one issuer or of two
or more issuers which the Fund controls and which are engaged in the same,
similar, or related trades or businesses. The Fund is required to distribute to
its shareholders at least 90% of its taxable (including the excess of net
short-term capital gain over net long-term capital losses) and tax-exempt net
investment income and generally is not subject to federal income tax to the
extent that it distributes annually such net investment income and net realized
capital gains in the manner required under the Code.

If for any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income will be subject to federal income tax at
regular corporate rates (without any deduction for distributions to its
shareholders), and all distributions from earnings and profits, including any
distributions of net tax-exempt income and net long-term capital gains, will be
taxable to shareholders as dividends. Such dividends, however, would generally
be eligible (i) to be treated as "qualified dividend income," in the case of
individual and other noncorporate shareholders, subject to reduced rates of
federal income taxation for taxable years beginning before January 1, 2011, and
(ii) for the 70% dividends received deduction in the case of corporate
shareholders. In addition, the Fund could be required to recognize unrealized
gains, pay substantial taxes and interest and make substantial distributions
before requalifying as a regulated investment company that is accorded special
federal income tax treatment.

The Fund is subject to a nondeductible 4% federal excise tax on amounts required
to be, but not, distributed under a prescribed formula. The formula requires
payment to shareholders during a calendar year of distributions representing at
least 98% of the Fund's taxable ordinary income for the calendar year and at
least 98% of the excess of its capital gains over capital losses realized during
the one-year period ending October 31 (in most cases) of such year as well as
amounts that were neither distributed nor taxed to the Fund during the prior
calendar year. Although each Fund's distribution policies should enable it to
avoid excise tax liability, the Fund may retain (and be subject to income or
excise tax on) a portion of its capital gain or other income if it appears to be
in the interest of such Fund.

Taxation of Distributions from the Fund. For federal income tax purposes,
distributions of investment income are generally taxable as ordinary income.
Taxes on distributions of capital gains are determined by how long the Fund
owned the investments that generated the income, rather than how long a
shareholder has owned his or her shares. Distributions of net capital gains from
the sale of investments that the Fund owned for more than one year and that are
properly designated by the Fund as capital gain dividends ("Capital Gain
Dividends") will be taxable as long-term capital gains. Distributions of gains
from the sale of investments that the Fund owned for one year or less will be
taxable as ordinary income. For taxable years beginning on or before December
31, 2010, distributions of investment income designated by the Fund as derived
from "qualified dividend income" will be taxed in the hands of individuals at
the rates applicable to long-term capital gain, provided certain holding period
and other requirements are met at both the shareholder and Fund level. A
dividend will not be treated as qualified dividend income (at either the Fund or
shareholder level) (1) if the dividend is received with respect to any share of
stock held for fewer than 61 days during the 120-day period beginning on the
date which is 60 days before the date on which such share becomes ex-dividend
with respect to such dividend (or, in the case of certain preferred stock, 91
days during the 180-day period beginning 90 days before such date), (2) to the
extent that the recipient is under an obligation (whether pursuant to a short
sale or otherwise) to make related payments with respect to positions in
substantially similar or related property, (3) if the recipient elects to have
the dividend income treated as investment income for purposes of the limitation
investment interest limitation, or (4) if the dividend is received from a
foreign corporation that is (a) not eligible for the benefits of a comprehensive
income tax treaty with the United States (with the exception of dividends paid
on stock of such a foreign corporation readily tradable on an established
securities market in the United States) or (b) treated as a foreign personal
holding company, foreign investment company, or passive foreign investment
company.

Distributions are taxable to shareholders even if they are paid from income or
gains earned by the Fund before a shareholder's investment (and thus were
included in the price the shareholder paid). Distributions are taxable whether
shareholders receive them in cash or reinvest them in additional shares through
the reinvestment privilege. A shareholder whose distributions are reinvested in
shares will be treated as having received a dividend equal to the fair market
value of the new shares issued to the shareholder. Any gain resulting from the
sale or exchange of Fund shares generally will be taxable as capital gain.

In general, distributions of investment income designated by the Fund as derived
from qualified dividend income will be treated as qualified dividend income by a
shareholder taxed as an individual provided the shareholder meets the holding
period and other requirements described above with respect to the Fund's shares.
Only qualified dividend income received by the Fund after December 31, 2002 is
eligible for pass-through treatment. If the aggregate qualified dividend
received by the Fund during any taxable year is 95% or more of its gross income,
then 100% of the Fund's dividends (other than dividends properly designated as
Capital Gain Dividends) will be eligible to be treated as qualified dividend
income. For this purpose, the only gain included in the term "gross income" is
the excess of net short-term capital gain over net long-term capital loss.

Special federal income tax rules apply to investments though defined
contribution plans and other tax-qualified plans. Shareholders should consult
their tax adviser to determine the suitability of shares of the Fund as an
investment through such plans and the precise effect of and investment on their
particular tax situation.

Dividends from domestic corporations may comprise a substantial part of each
Fund's gross income. If any such dividends constitute a portion of the Fund's
gross income, a portion of the income distributions of such Fund may be eligible
for the 70% deduction for dividends received by corporations. Shareholders will
be informed of the portion of dividends which so qualify. The dividends-received
deduction is reduced to the extent the shares of the Fund with respect to which
the dividends are received are treated as debt-financed under federal income tax
law and is eliminated if either those shares or the shares of the Fund are
deemed to have been held by the Fund or the shareholder, as the case may be, for
less than 46 days during the 91-day period beginning 45 days before the shares
become ex-dividend.

Transactions in Fund Shares. Any loss realized upon the redemption of shares
held for six months or less at the time of redemption will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gain during such six-month period. Furthermore, any loss from
the sale or redemption of shares held six months or less generally will be
disallowed to the extent that tax-exempt interest dividends were paid on such
shares.

Under certain circumstances, shareholders of the Fund may exchange their shares
for shares of the same class of certain other funds (the "reinvested shares").
If a shareholder (other than tax-exempt accounts) makes such an exchange, the
shareholder will recognize a capital gain or loss for federal income tax
purposes measured by the difference between the value of the reinvested shares
and the basis of the exchanged shares. Upon the exchange of shares (or the
reinvestment in shares of the same Fund) that were purchased subject to a sales
charge and held for less than 91 days, the lesser of (i) the sales charge
incurred on the exchanged shares or (ii) the sales charge waived on the
reinvested shares is included in the basis of the reinvested shares and is not
included in the basis of the exchanged shares.

Foreign Taxation. Foreign withholding or other foreign taxes with respect to
income (possibly including, in some cases, capital gains) on certain foreign
securities may occur. These taxes may be reduced or eliminated under the terms
of an applicable US income tax treaty. As it is not expected that more than 50%
of the value of the Fund's total assets will consist of securities issued by
foreign corporations, the Fund will not be eligible to pass through to
shareholders their proportionate shares of any foreign taxes paid, with the
result that shareholders will not be required to include in income, and will not
be entitled to take any credits or deductions for such foreign taxes.

Passive Foreign Investment Companies. Equity investments by the Fund in certain
"passive foreign investment companies" ("PFICs") could potentially subject the
Fund to a US federal income tax (including interest charges) on distributions
received from the company or on proceeds received from the disposition of shares
in the company, which tax cannot be eliminated by making distributions to Fund
shareholders. However, the Fund may elect to avoid the imposition of that tax.
For example, the Fund may elect to treat a PFIC as a "qualified electing fund"
(a "QEF election"), in which case the Fund would be required to include its
share of the company's income and net capital gains annually, regardless of
whether it receives any distribution from the company. Such Fund also may make
an election to mark the gains (and to a limited extent losses) in such holdings
"to the market" as though it had sold and repurchased its holdings in those
PFICs on the last day of the Fund's taxable year. Such gains and losses are
treated as ordinary income and loss. The QEF and mark-to-market elections may
accelerate the recognition of income (without the receipt of cash) and increase
the amount required to be distributed by the Fund to avoid taxation. Making
either of these elections therefore may require such Fund to liquidate other
investments (including when it is not advantageous to do so) to meet its
distribution requirement, which also may accelerate the recognition of gain and
affect the Fund's total return. Dividends paid by PFICs will not be eligible to
be treated as "qualified dividend income."

Other Federal Income Tax Considerations. The Fund's use of options, futures
contracts, forward contracts (to the extent permitted) and certain other
Strategic Transactions will be subject to special tax rules (including
mark-to-market, constructive sale, straddle, wash sale, short sale and other
rules), the effect of which may be to accelerate the recognition of income,
defer losses, cause adjustments in the holding periods of portfolio securities,
convert capital gains into ordinary income and convert short-term capital losses
into long-term capital losses. These rules could therefore affect the amount,
timing and character of distributions to investors.

The Fund's investment in zero coupon bonds and other debt obligations having
original issue discount may cause the Fund to recognize taxable income in excess
of any cash received from the investment.

Under the backup withholding provisions of the Code, redemption proceeds as well
as distributions (including exempt interest dividends) may be subject to federal
income tax withholding for certain shareholders, including those who fail to
furnish the Fund with their correct taxpayer identification numbers and
certifications as to their tax status.

Shareholders of the Fund may be subject to state and local taxes on
distributions received from the Fund and on redemptions of the Fund's shares.
Any shareholder who is not a US Person (as such term is defined in the Code)
should consider the US and foreign tax consequences of ownership of shares of
the Fund, including the possibility that such a shareholder may be subject to a
flat US withholding tax rate of 30% (or a potentially lower rate under an
applicable income tax treaty) on amounts received by him or her. Recently
enacted legislation, however, modifies the tax treatment of certain dividends
paid by the Fund to non-US persons. Effective for taxable years of the Fund
beginning after December 31, 2004 and before January 1, 2008, a Fund will
generally not be required to withhold tax on any amounts paid to a non-US person
with respect to dividends attributable to "qualified short-term gain" (i.e., the
excess of short-term capital gain over net long-term capital loss) designated as
such by the Fund and dividends attributable to certain US source interest income
that would not be subject to federal withholding tax if earned directly by a
non-US person, provided such amounts are properly designated by the Fund.

Capital gains distributions may be reduced if Fund capital loss carryforwards
are available. Any capital loss carryforwards to which the Fund is entitled are
disclosed in the Fund's annual and semiannual reports to shareholders.

All distributions by the Fund result in a reduction in the net asset value of
that Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time includes the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will receive a partial return of capital upon the
distribution, which will nevertheless be taxable to them.

Treasury Regulations provide that if a shareholder recognizes a loss with
respect to Fund shares of $2 million or more in a single taxable year (or $4
million or more in any combination of taxable years) for shareholders who are
individuals, S corporations or trusts, or $10 million or more in a single
taxable year (or $20 million or more in any combination of taxable years) for a
corporate shareholder, the shareholder must file with the Internal Revenue
Service a disclosure statement on Form 8886. Direct shareholders of portfolio
securities are in many cases excepted from this reporting requirement, but under
current guidance, shareholders of a regulated investment company are not
excepted. Future guidance may extend the current exception from this reporting
requirement to shareholders of most or all regulated investment companies. The
fact that a loss is reportable under these regulations does not affect the legal
determination of whether the taxpayer's treatment of the loss is proper.
Shareholders should consult their tax advisors to determine the applicability of
these regulations in light of their particular circumstances.

Investors are advised to consult their own tax advisors with respect to the
application to their own circumstances of the above-described general federal
income taxation rules and with respect to other federal, state, local or foreign
tax consequences to them on an investment in shares of the Fund.

                                 NET ASSET VALUE

The net asset value of shares of the Fund 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 Fund attributable to the shares of
that class, less all liabilities attributable to that class, by the total number
of shares of that class outstanding. The per share net asset value may be lower
for certain classes of the Fund because of higher expenses borne by these
classes.

An equity security is valued at its most recent sale price on the security's
primary exchange or OTC market as of the Value Time. Lacking any sales, the
security is valued at the calculated mean between the most recent bid quotation
and the most recent asked quotation (the "Calculated Mean") on such exchange or
OTC market as of the Value Time. If it is not possible to determine the
Calculated Mean, the security is valued at the most recent bid quotation on such
exchange or OTC market as of the Value Time. In the case of certain foreign
exchanges or OTC markets, the closing price reported by the exchange or OTC
market (which may sometimes be referred to as the "official close" or the
"official closing price" or other similar term) will be considered the most
recent sale price.

Debt securities are valued as follows. Money market instruments purchased with
an original or remaining maturity of 60 days or less, maturing at par, are
valued at amortized cost. Other money market instruments are valued based on
information obtained from an approved pricing agent or, if such information is
not readily available, by using matrix pricing techniques (formula driven
calculations based primarily on current market yields). Bank loans are valued at
prices supplied by an approved pricing agent (which are intended to reflect the
mean between the bid and asked prices), if available, and otherwise at the mean
of the most recent bid and asked quotations or evaluated prices, as applicable,
based on quotations or evaluated prices obtained from one or more
broker-dealers. Privately placed debt securities, other than Rule 144A debt
securities, initially are valued at cost and thereafter based on all relevant
factors, including type of security, size of holding and restrictions on
disposition. Municipal debt securities are valued at prices supplied by an
approved pricing agent (which are intended to reflect the mean between the bid
and asked prices), if available, and otherwise at the mean of the most recent
bid and asked quotations or evaluated price obtained from a broker-dealer. Other
debt securities are valued at prices supplied by an approved pricing agent, if
available, and otherwise at the most recent bid quotation or evaluated price, as
applicable, obtained from one or more broker-dealers. If it is not possible to
value a particular debt security pursuant to the above methods, the security is
valued on the basis of factors including (but not limited to) maturity, coupon,
creditworthiness, currency denomination, and the movement of the market in which
the security is normally traded.

An exchange-traded option contract on securities, currencies and other financial
instruments is valued at its most recent sale price on the relevant exchange.
Lacking any sales, the option contract is valued at the Calculated Mean. If it
is not possible to determine the Calculated Mean, the option contract is valued
at the most recent bid quotation in the case of a purchased option contract or
the most recent asked quotation in the case of a written option contract, in
each case as of the Value Time. An option contract on securities, currencies and
other financial instruments traded in the OTC market is valued on the Value Date
at the evaluated price provided by the broker-dealer with which it was traded.
Futures contracts (and options thereon) are valued at the most recent settlement
price, if available on the exchange on which they are traded most extensively.
With the exception of stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement times are prior to the close of trading
on the Exchange. For stock index futures contracts which trade on the Chicago
Mercantile Exchange, closing settlement prices are normally available at
approximately 4:20 Eastern time. If no settlement price is available, the last
traded price on such exchange will be used.

If market quotations for portfolio assets are not readily available or the value
of a portfolio 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 Fund'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
Fund 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 Fund's Board and overseen primarily by the Fund's Pricing
Committee.

                              TRUSTEES AND OFFICERS

The following table presents certain information regarding the Board Members and
Officers of the Fund as of March 1, 2008. Each individual's year of birth is set
forth in parentheses after his or her name. Unless otherwise noted, (i) each
individual 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) unless otherwise noted, the address of each individual is c/o Deutsche
Asset Management, 222 South Riverside Plaza, Chicago, Illinois 60606. Each Board
Member's term of office extends until the next shareholder's meeting called for
the purpose of electing such Board Member and until the election and
qualification of a successor, or until such Board Member sooner dies, retires,
resigns or is removed as provided in the governing documents of the Trust.

The following individuals hold the same position with the Fund and the Trust.

Independent Board Members

---------------------------------------------------------------------------------------------------------------------
Name, Year of Birth,
Position(s) Held with the                                                                          Number of Funds
Trust and Length of Time       Principal Occupation(s) During Past 5 Years and                     in DWS Fund
Served(1)                      Other Directorships Held                                            Complex Overseen
---------------------------------------------------------------------------------------------------------------------
Paul K. Freeman (1950)         Consultant, World Bank/Inter-American Development Bank; formerly,          59
Chairperson since 2007, and    Project Leader, International Institute for Applied Systems
Board Member, 2002-present     Analysis (1998-2001); Chief Executive Officer, The Eric Group,
                               Inc. (environmental insurance) (1986-1998)
---------------------------------------------------------------------------------------------------------------------
John W. Ballantine (1946)      Retired; formerly, Executive Vice President and Chief Risk                 59
Board Member, 1999-present     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
---------------------------------------------------------------------------------------------------------------------
Donald L. Dunaway (1937)       Retired; formerly, Executive Vice President, A. O. Smith                   59
Board Member, 1980-present     Corporation (diversified manufacturer) (1963-1994)
---------------------------------------------------------------------------------------------------------------------
James R. Edgar (1946)          Distinguished Fellow, University of Illinois, Institute of                 59
Board Member, 1999-present     Government and Public Affairs (1999-present); formerly, Governor,
                               State of Illinois (1991-1999). Directorships:  John B. Sanfilippo
                               & Son, Inc. (processor/packager/marketer of nuts, snacks and candy
                               products); Horizon Group Properties, Inc.; Youbet.com (online
                               wagering platform); Alberto-Culver Company (manufactures,
                               distributes and markets health and beauty care products)
---------------------------------------------------------------------------------------------------------------------
Robert B. Hoffman (1936)       Retired; formerly, Chairman, Harnischfeger Industries, Inc.                59
Board Member, 1981-present     (machinery for the mining and paper industries) (1999-2001); prior
                               thereto, Vice Chairman and Chief Financial Officer, Monsanto
                               Company (agricultural, pharmaceutical and nutritional/food
                               products) (1994-1999). Directorship:  RCP Advisors, LLC (a private
                               equity investment advisory firm)
---------------------------------------------------------------------------------------------------------------------
William McClayton (1944)       Chief Administrative Officer, Diamond Management & Technology              59
Board Member, 2004-present     Consultants, Inc. (global management consulting firm)
                               (2001-present); formerly, Senior Partner, Arthur Andersen LLP
                               (accounting) (1966-2001). Directorship: Board of Managers, YMCA of
                               Metropolitan Chicago. Formerly Trustee, Ravinia Festival
---------------------------------------------------------------------------------------------------------------------
Shirley D. Peterson (1941)     Retired; formerly, President, Hood College (1995-2000); prior              59
Board Member, 1995-present     thereto, Partner, Steptoe & Johnson (law firm); Commissioner,
                               Internal Revenue Service; Assistant Attorney General (Tax), US
                               Department of Justice. Directorships:  Federal Mogul Corp.
                               (supplier of automotive components and subsystems); AK Steel
                               (steel production); Goodyear Tire & Rubber Co.
                               (April 2004-present); Champion Enterprises, Inc. (manufactured
                               home building); Wolverine World Wide, Inc. (designer, manufacturer
                               and marketer of footwear) (April 2005-present); Trustee, Bryn Mawr
                               College. Former Directorship:  Bethlehem Steel Corp.
---------------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth (1940)     President, Robert H. Wadsworth & Associates, Inc. (consulting              62
Board Member, 2004-present     firm) (1983 to present). Formerly, Trustee of New York Board DWS
                               Funds.
---------------------------------------------------------------------------------------------------------------------

Officers(2)

---------------------------------------------------------------------------------------------------------------------
Name, Date of Birth,
Position(s) Held with the
Trust and Length of Time       Principal Occupation(s) During Past 5 Years and
Served(1)                      Other Directorships Held
---------------------------------------------------------------------------------------------------------------------
Michael G. Clark(4) (1965)     Managing Director(3), Deutsche Asset Management (2006-present); President of DWS
President, 2006-present        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(5) (1962)        Director(3), Deutsche Asset Management
Vice President 2008 -
present, Secretary,
2001-present
---------------------------------------------------------------------------------------------------------------------
Paul H. Schubert(4) (1963)     Managing Director(3), Deutsche Asset Management (since July 2004); formerly,
Chief Financial Officer,       Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of
2004-present                   Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global
Treasurer, 2005-present        Asset Management (1994-1998)
---------------------------------------------------------------------------------------------------------------------
Patricia DeFilippis(4) (1963)  Vice President, Deutsche Asset Management (since June 2005); formerly, Counsel, New
Assistant Secretary,           York Life Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co.
2005-present                   LLC (1998-2003)
---------------------------------------------------------------------------------------------------------------------
Elisa D. Metzger(4) (1962)     Director(3), Deutsche Asset Management (since September 2005); formerly, Counsel,
Assistant Secretary,           Morrison and Foerster LLP (1999-2005)
2005-present
---------------------------------------------------------------------------------------------------------------------
Caroline Pearson(5) (1962)     Managing Director(3), Deutsche Asset Management
Assistant Secretary,
1998-present
---------------------------------------------------------------------------------------------------------------------
Paul Antosca(5)                Director(3), Deutsche Asset Management (since 2006); formerly, Vice President, The
(1957)                         Manufacturers Life Insurance Company (U.S.A.) (1990-2006)
Assistant Treasurer,
2007-present
---------------------------------------------------------------------------------------------------------------------
Jack Clark (5) (1967)          Director(3), Deutsche Asset Management (since 2007); formerly, Vice President, State
Assistant Treasurer,           Street Corporation (2002-2007)
2008-present
---------------------------------------------------------------------------------------------------------------------
Kathleen Sullivan D'Eramo(5)   Director(3), Deutsche Asset Management
(1957)
Assistant Treasurer,
2003-present
---------------------------------------------------------------------------------------------------------------------
Diane Kenneally(5) (1966)      Director(3), Deutsche Asset Management
Assistant Treasurer,
2008-present
---------------------------------------------------------------------------------------------------------------------
Jason Vazquez(4) (1972)        Vice President, Deutsche Asset Management (since 2006); formerly, AML Operations
Anti-Money Laundering          Manager for Bear Stearns (2004-2006), Supervising Compliance Principal and
Compliance Officer,            Operations Manager for AXA Financial (1999-2004)
2007-present
---------------------------------------------------------------------------------------------------------------------
Robert Kloby(4) (1962)         Managing Director(3), Deutsche Asset Management (2004-present); formerly, Chief
Chief Compliance Officer,      Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President, The
2006-present                   Prudential Insurance Company of America (1988-2000); E.F. Hutton and Company
                               (1984-1988)
---------------------------------------------------------------------------------------------------------------------

(1)       Length of time served represents the date that each Board Member was
          first elected to the common Board which oversees a number of
          investment companies, including the Fund, managed by the Advisor. For
          the officers of the Fund, length of time served represents the date
          that each officer was first elected to serve as an officer of any fund
          overseen by the aforementioned common Board.

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

(3)       Executive title, not a board directorship.

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

(5)       Address: Two International Place, Boston, Massachusetts 02110.

Officers' Role with Principal Underwriter:  DWS Scudder Distributors, Inc.

Paul H. Schubert:                        Vice President
Caroline Pearson:                        Secretary
Philip J. Collora:                       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 shareholders of the Fund and to
provide oversight of the management of the Fund. All of the Board Members are
not "interested persons" of the Advisor.

The Board has adopted its own Governance Procedures and Guidelines and has
established a number of committees, as described below. For each of the
following committees, the Board has adopted a written charter setting forth the
committees' responsibilities.

Board Committees. The Board oversees a number of investment companies managed by
the Advisor. Information shown below represents meetings held on behalf of all
such funds. The common Board has the following committees:

Audit Committee: The Audit Committee, which consists entirely of Independent
Board Members, makes recommendations regarding the selection of independent
registered public accounting firm for the funds, confers with the independent
registered public accounting firm regarding the funds' financial statements, the
results of audits and related matters, 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),
Donald L. Dunaway and Robert B. Hoffman. The Audit Committee held eight (8)
meetings during calendar year 2007.

Nominating and Governance Committee: The Nominating and Governance Committee,
which consists entirely of Independent Board Members, seeks and reviews
candidates for consideration as nominees for membership on the Board and
oversees the administration of the funds' Governance Procedures and Guidelines.
The members of the Nominating and Governance Committee are Shirley D. Peterson
(Chair), James R. Edgar and William McClayton. Shareholders wishing to submit
the name of a candidate for consideration as a Board member by the committee
should submit their recommendation(s) and resume to the Secretary of the Trust.
The Nominating and Governance Committee held six (6) meetings during calendar
year 2007.

Contract Review Committee: The Contract Review Committee, which consists
entirely of Independent Board Members, oversees the annual contract review
process. The members of the Contract Review Committee are Paul K. Freeman
(Chair), John W. Ballantine, Donald L. Dunaway, William McClayton and Robert H.
Wadsworth. The Contract Review Committee held two (2) meetings during calendar
year 2007.

Valuation Committee: The Valuation Committee reviews valuation procedures
adopted by the Board, determines fair value of the Fund's securities as needed
in accordance with the valuation procedures and performs such other tasks as the
full Board deems necessary. The members of the Valuation Committee are John W.
Ballantine (Chair), Robert H. Wadsworth, Donald L. Dunaway (alternate) and
William McClayton (alternate). The Valuation

Committee held one (1) meeting during calendar year 2007.

Equity Oversight Committee: The Equity Oversight Committee oversees investment
activities of the DWS equity funds overseen by the Board, such as investment
performance and risk, expenses and services provided under the investment
management agreement. The members of the Equity Oversight Committee are John W.
Ballantine (Chair), James R. Edgar and Robert B. Hoffman. The Equity Oversight
Committee held five (5) meetings during calendar year 2007.

Operations Committee: The Operations Committee oversees the operations of the
funds, such as reviewing administrative fees and expenses, distribution
arrangements, portfolio transaction policies, custody and transfer agency
arrangements and shareholder services. Currently, the members of the Operations
Committee are Robert H. Wadsworth (Chair), John W. Ballantine and James R.
Edgar. The Operations Committee held six (6) meetings during calendar year 2007.

Fixed-Income Oversight Committee: The Fixed-Income Oversight Committee oversees
investment activities of the DWS fixed-income funds overseen by the Board, such
as investment performance and risk, expenses and services provided under the
investment management agreement. The members of the Fixed-Income Oversight
Committee are Donald L. Dunaway (Chair), Shirley D. Peterson and Robert H.
Wadsworth. The Fixed-Income Oversight Committee held five (5) meetings during
calendar year 2007.

Remuneration. Each Independent Board Member receives an annual base retainer,
paid quarterly, and, as applicable, an additional annual fixed fee(s) for
serving as committee member, committee chairperson and/or as the Independent
Board chairperson. The Board Members serve as board members of various other
funds advised by the Advisor. The Advisor supervises a Fund's investments, pays
the compensation and expenses of its personnel who serve as Board Members and
officers on behalf of the Fund and receives a management fee for its services.

The Board established a deferred compensation plan for the Independent Board
Members ("Deferred Compensation Plan"). Under the Deferred Compensation Plan,
the Independent Board Members may defer receipt of all, or a portion, of the
compensation they earn for their services to the Fund, in lieu of receiving
current payments of such compensation. Any deferred amount is treated as though
an equivalent dollar amount has been invested in shares of one or more funds
advised by the Advisor ("Shadow Shares"). Governor Edgar currently has elected
to defer at least a portion of his fees. In addition, previously, Mr. Dunaway
elected to defer fees that were payable, which are now included under the
Deferred Compensation Plan. The equivalent Shadow Shares are reflected below in
the table describing the Board Member's share ownership.

Members of the Board who are officers, directors, employees or stockholders of
the Advisor or its affiliates receive no direct compensation from the Fund,
although they are compensated as employees of the Advisor, or its affiliates,
and as a result may be deemed to participate in fees paid by the Fund. The
Independent Board Members are not entitled to benefits under any fund pension or
retirement plan. The following table shows compensation received by each Board
Member from the Fund and aggregate compensation from the DWS Fund complex during
the calendar year 2007.

                                                            Pension or Retirement
                                                               Benefits Accrued         Total Compensation Paid to
Name of                          Compensation from                as Part of           Board Member from DWS Fund
Board Member                     DWS Balanced Fund              Fund Expenses                   Complex(2)
------------                     -----------------              -------------                   ----------
John W. Ballantine                     $6,340                         $0                          $215,000
Donald L. Dunaway                      $5,970                         $0                          $202,500
James R. Edgar(1)                      $5,626                         $0                          $190,000
Paul K. Freeman(3)                     $7,826                         $0                          $265,000
Robert B. Hoffman                      $5,450                         $0                          $185,000
William McClayton((4))                 $6,050                         $0                          $205,000
Shirley D. Peterson                    $5,530                         $0                          $187,500
Robert H. Wadsworth                    $6,050                         $0                          $245,250

(1)       Includes deferred fees. Pursuant to a Deferred Compensation Plan, as
          discussed above, deferred amounts are treated as though an equivalent
          dollar amount has been invested in Shadow Shares (as defined above) of
          funds managed by the Advisor in which compensation may be deferred by
          Governor Edgar. Total deferred fees (including interest thereon and
          the return from the assumed investment in the funds managed by the
          Advisor) payable from the Fund to Governor Edgar are $53,109.

(2)       For each Board Member, except Mr. Wadsworth, total compensation for
          calendar year 2007 includes compensation, as of December 31, 2007, for
          service on the boards of 21 trusts/corporations comprised of 59
          funds/portfolios. Mr. Wadsworth's total compensation for calendar year
          2007 was for service on the boards of 24 trusts/corporations comprised
          of 62 funds/portfolios.

((3))     Aggregate compensation includes $25,000 paid to Dr. Freeman for
          numerous special meetings of an ad hoc committee of the Board in
          connection with board consolidation initiatives and $50,000 in annual
          retainer fees received by Dr. Freeman as Chairperson of the Board, for
          which he served through December 31, 2007.

((4))     Does not include $15,000 to be paid to Mr. McClayton in calendar year
          2008 for numerous special meetings of an ad hoc committee of the Board
          in connection with board consolidation initiatives.

Mr.       Freeman, prior to his service as Independent Board Member, served as a
          board member of certain funds in the Deutsche Bank complex ("DB
          Funds"). In connection with his resignation and the resignation of
          certain other board members of the DB Funds on July 30, 2002 (the
          "Effective Date"), which was part of a restructuring of the boards
          overseeing the DB Funds, Deutsche Asset Management, Inc. ("DAMI")
          agreed to recommend, and, if necessary obtain, directors and officers
          ("D&O") liability insurance coverage for the prior board members,
          including Mr. Freeman, that is at least as equivalent in scope and
          amount to the D&O coverage provided to the prior board members for the
          six-year period following the Effective Date. In the event that D&O
          insurance coverage is not available in the commercial marketplace on
          commercially reasonable terms from a conventional third party insurer,
          DeAM reserved the right to provide substantially equivalent protection
          in the form of an indemnity or financial guarantee from an affiliate
          of DeAM. The D&O policy in effect prior to the Effective Date provided
          aggregate coverage of $25,000,000, subject to a $250,000 per claim
          deductible.

Board Member Fund Ownership. Under the Trust's Governance Procedures and
Guidelines, the Independent Board Members have established the expectation that
within three years of becoming a Board Member, an Independent Board Member will
have invested an amount in those funds he or she oversees (which shall include
amounts held under a deferred fee agreement that are valued based on "shadow
shares" in such funds) in the aggregate in excess of $150,000. Each interested
Board Member is also encouraged to own an amount of shares (based upon their own
individual judgment) of those funds that he or she oversees that is suitable for
his or her own appropriate investment needs. The following tables set forth each
Board Member's share ownership of the Fund and all funds in the DWS Fund complex
overseen by each Board Member as of December 31, 2007.

                                                                        Aggregate Dollar Range of Securities
                                             Dollar Range of                        Owned in All
                                           Securities Owned in             Funds in the DWS Fund Complex
Name of Board Member                        DWS Balanced Fund                 Overseen by Board Member
--------------------                        -----------------                 ------------------------
John W. Ballantine                                None                           Over $100,000
Donald L. Dunaway*                                None                           Over $100,000
James R. Edgar*                                   None                           Over $100,000
Paul K. Freeman                                   None                           Over $100,000
Robert B. Hoffman                            $10,001-$50,000                     Over $100,000
William McClayton                                 None                           Over $100,000
Shirley D. Peterson                               None                           Over $100,000
Robert H. Wadsworth                               None                           Over $100,000

*         The dollar range of shares shown includes shadow shares of certain DWS
          family of funds in which Governor Edgar is deemed to be invested
          pursuant to the Fund's Deferred Compensation Plan as more fully
          described above under "Remuneration."

Ownership in Securities of the Advisor and Related Companies

As reported to the Fund, 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, 2007. An immediate family member 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 Fund 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 Fund (including
Deutsche Bank AG).

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

John W. Ballantine                                    None
Donald L. Dunaway                                     None
James R. Edgar                                        None
Paul K. Freeman                                       None
Robert B. Hoffman                                     None
William McClayton                                     None
Shirley D. Peterson                                   None
Robert H. Wadsworth                                   None

Securities Beneficially Owned

As of February 11, 2008, all Board Members and Officers of the Fund as a group
owned beneficially (as that term is defined is section 13(d) of the Securities
Exchange Act of 1934) less than 1% of the outstanding securities of the Fund.

To the best of the Fund's knowledge, as of February 11, 2008, no person owned of
record or beneficially 5% or more of any class of the Fund's outstanding shares,
except as noted below.

Name and Address of Investor Ownership                        Shares                               % of Total Shares
--------------------------------------                        ------                               -----------------
MLPF&S FOR THE SOLE BENEFIT OF                                205,857.83                    6.89% of class C
ITS CUSTOMERS
ATTN FUND ADMINISTRATION 97D63
JACKSONVILLE FL  32246-6484

DWS TRUST COMPANY CUST                                         18,550.76              49.92% of Institutional class
FOR THE IRA ROLLOVER OF
NELSON E DAUS
CYPRESS TX  77433-1282

DWS TRUST COMPANY CUST                                         5,940.78               15.99% of Institutional class
FOR THE IRA ROLLOVER OF
SUSAN MCCRINDLE PETRARCA
LEMONT IL  60439-4619

REBECCA W RIMEL                                                1,998.80               5.38% of Institutional class
KENNEDYVILLE MD  21645-3322

DWS TRUST COMPANY CUST                                         1,909.43               5.14% of Institutional class
FOR THE IRA ROLLOVER OF
GLORIA JEAN GEMMILL
KANSAS CITY MO  64118-4846

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 Messrs. Ballantine, Dunaway, Edgar, Freeman,
Hoffman and Ms. Peterson, each of whom is an independent trustee and was a
trustee at the time DIMA entered into the Fund Indemnification Agreement (the
"Covered Trustees"), against certain liabilities the Covered 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 Covered
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 Covered Trustees ultimately would not be entitled to
indemnification or (2) for any liability of the Covered Trustees to the Affected
Funds or their shareholders to which the Covered Trustee would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the Covered Trustee's duties as a 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 Covered Trustees or
indemnity that may be payable under the indemnity agreements is currently
unknown. This undertaking by DIMA will survive the termination of the investment
management agreements between DIMA and the Affected Funds.

                               TRUST ORGANIZATION

The Fund is a registered open-end management investment company organized as a
business trust under the laws of Massachusetts on October 24, 1985, and
effective January 31, 1986, the Fund pursuant to a reorganization succeeded to
the assets and liabilities of Kemper Total Return Fund, Inc., a Maryland
corporation organized in 1963.

Effective March 14, 2005, the Fund succeeded to the assets and liabilities of
the Scudder Balanced Fund, a Massachusetts business trust.

Organizational Description

The Trustees have the authority to create additional funds and to designate the
relative rights and preferences as between the different funds. The Trustees
also may authorize the division of shares of the Fund into different classes,
which may bear different expenses. All shares issued and outstanding are fully
paid and non-assessable, transferable, have no pre-emptive or conversion rights
and are redeemable as described in the SAI and in the Fund's prospectuses. Each
share has equal rights with each other share of the same class of the Fund as to
voting, dividends, exchanges, conversion features and liquidation. Shareholders
are entitled to one vote for each full share held and fractional votes for
fractional shares held. The Trustees may also terminate any fund or class by
notice to the shareholders without shareholder approval. Currently, the Fund
offers Class A, Class B, Class C, Institutional Class and S shares.

The Fund generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Trust, as amended, (the
"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 by shareholders is required by the 1940 Act; (c) any termination
or reorganization of the Fund or a class to the extent and as provided in the
Declaration of Trust; (d) certain material amendments of the Declaration of
Trust (such as other than amendments changing the name of a Trust, supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision thereof); and (e) such additional matters as
may be required by law, the Declaration of Trust, the By-laws of the Fund, or
any registration of the Fund with the SEC or as the trustees may consider
necessary or desirable. Shareholders also vote upon changes in fundamental
investment policies or restrictions.

The Declaration of Trust for the Trust provides that obligations of the Trust
are not binding upon the Trustees individually but only upon the property of the
Trust, that the Trustees and officers will not be liable for errors of judgment
or mistakes of fact or law, and that the Trust will indemnify its Trustees and
officers against liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the Trust except if
it is determined in the manner provided in the Declarations of Trust that they
have not acted in good faith in the reasonable belief that their actions were in
the best interests of the Trust. However, nothing in the Declaration of Trust
protects or indemnifies a Trustee or officer against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of their
office.

Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of a
Trust. The Declarations of Trust, however, disclaim shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trust or the Trust's Trustees. Moreover, the Declaration of Trust provide
for indemnification out of Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Trust
may be covered by insurance. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered remote and not material,
since it is limited to circumstances in which a disclaimer is inoperative and
such Trust itself is unable to meet its obligations.

If a series were unable to meet its obligations, the assets of all other series
may in some circumstances be available to creditors for that purpose, in which
case the assets of such other series could be used to meet liabilities which are
not otherwise properly chargeable to them.

Each Trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing Trustees and until the election and qualification of a
successor or until such trustee sooner dies, resigns, retires or is removed.

Any Trustee may be removed for cause at any time by written instrument, signed
by at least a majority of the number of Trustees prior to such removal,
specifying the date upon which such removal shall become effective. Any Trustee
may be removed with or without cause (i) by the vote of the shareholders
entitled to vote more than fifty percent (50%) of the votes entitled to be cast
on the mater voting together without regard to series or class at any meeting
called for such purpose, or (ii) by a written consent filed with the custodian
of the Trust's portfolio securities and executed by the shareholder entitled to
vote more than fifty percent (50%) of the votes entitled to be cast on the
matter voting together without regard to series or class. Whenever ten or more
shareholders of record who have been such for at least six months preceding the
date of application, and who hold in the aggregate shares constituting at least
one percent of the outstanding shares of the Trust, shall apply to the Trustees
in writing, stating that they wish to communicate with other shareholders with a
view to obtaining signatures to a request for a meeting to consider removal of a
Trustee and accompanied by a form of communication and request that they wish to
transmit, the Trustees will assist shareholder communications to the extent
provided for in Section 16(c) under the 1940 Act.

                             PROXY VOTING GUIDELINES

The Fund has delegated proxy voting responsibilities to its investment advisor,
subject to the Board's general oversight. The Fund has delegated proxy voting to
the Advisor with the direction that proxies should be voted consistent with the
Fund's best economic interests. The Advisor has adopted its own Proxy Voting
Policies and Procedures ("Policies"), and Proxy Voting Guidelines ("Guidelines")
for this purpose. The Policies address, among other things, conflicts of
interest that may arise between the interests of the Fund, and the interests of
the Advisor and its affiliates, including the Fund's principal underwriter. The
Guidelines set forth the Advisor's general position on various proposals, such
as:

o        Shareholder Rights -- The Advisor generally votes against proposals
         that restrict shareholder rights.

o        Corporate Governance -- The Advisor generally votes for confidential
         and cumulative voting and against supermajority voting requirements for
         charter and bylaw amendments. The Advisor generally votes for proposals
         to restrict a chief executive officer from serving on more than three
         outside boards of directors. The Advisor generally votes against
         proposals that require a company to appoint a Chairman who is an
         independent director.

o        Anti-Takeover Matters -- The Advisor generally votes for proposals that
         require shareholder ratification of poison pills or that request boards
         to redeem poison pills, and votes against the adoption of poison pills
         if they are submitted for shareholder ratification. The Advisor
         generally votes for fair price proposals.

o        Compensation Matters -- The Advisor generally votes for executive cash
         compensation proposals, unless they are unreasonably excessive. The
         Advisor generally votes against stock option plans that do not meet the
         Advisor's criteria.

o        Routine Matters -- The Advisor generally votes for the ratification of
         auditors, procedural matters related to the annual meeting and changes
         in company name, and against bundled proposals and adjournment.

The general provisions described above do not apply to investment companies. The
Advisor generally votes proxies solicited by investment companies in accordance
with the recommendations of an independent third party, except for proxies
solicited by or with respect to investment companies for which the Advisor or an
affiliate serves as investment advisor or principal underwriter ("affiliated
investment companies"). The Advisor votes affiliated investment company proxies
in the same proportion as the vote of the investment company's other
shareholders (sometimes called "mirror" or "echo" voting). Master fund proxies
solicited from feeder funds are voted in accordance with applicable requirements
of the 1940 Act.

Although the Guidelines set forth the Advisor's general voting positions on
various proposals, the Advisor may, consistent with the Fund's best interests,
determine under some circumstances to vote contrary to those positions.

The Guidelines on a particular issue may or may not reflect the view of
individual members of the Board or of a majority of the Board. In addition, the
Guidelines may reflect a voting position that differs from the actual practices
of the public companies within the Deutsche Bank organization or of the
investment companies for which the Advisor or an affiliate serves as investment
advisor or sponsor.

The Advisor may consider the views of a portfolio company's management in
deciding how to vote a proxy or in establishing general voting positions for the
Guidelines, but management's views are not determinative.

As mentioned above, the Policies describe the way in which the Advisor resolves
conflicts of interest. To resolve conflicts, the Advisor, under normal
circumstances, votes proxies in accordance with its Guidelines. If the Advisor
departs from the Guidelines with respect to a particular proxy or if the
Guidelines do not specifically address a certain proxy proposal, a proxy voting
committee established by the Advisor will vote the proxy. Before voting any such
proxy, however, the Advisor's conflicts review committee will conduct an
investigation to determine whether any potential conflicts of interest exist in
connection with the particular proxy proposal. If the conflicts review committee
determines that the Advisor has a material conflict of interest, or certain
individuals on the proxy voting committee should be recused from participating
in a particular proxy vote, it will inform the proxy voting committee. If
notified that the Advisor has a material conflict, or fewer than three voting
members are eligible to participate in the proxy vote, typically the Advisor
will engage an independent third party to vote the proxy or follow the proxy
voting recommendations of an independent third party.

Under certain circumstances, the Advisor may not be able to vote proxies or the
Advisor may find that the expected economic costs from voting outweigh the
benefits associated with voting. For example, the Advisor may not vote proxies
on certain foreign securities due to local restrictions or customs. The Advisor
generally does not vote proxies on securities subject to share blocking
restrictions.

You may obtain information about how the Fund 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-scudder.com (click on "proxy voting" at the bottom of the
page).

                              FINANCIAL STATEMENTS

The financial statements, including the portfolio of investments, of the Fund,
together with the Report of Independent Registered Public Accounting Firm,
Financial Highlights and notes to financial statements in the Annual Report to
the Shareholders of the Fund, dated October 31, 2007, are incorporated herein by
reference and are hereby deemed to be a part of this SAI.

                             ADDITIONAL INFORMATION

The CUSIP numbers for each Class of DWS Balanced Fund discussed in this SAI are:

Class A:  23336W-106

Class B:  23336W-205

Class C:  23336W-304

Institutional Class:  23336W-601

The Fund has a fiscal year ending October 31.

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

                                    APPENDIX

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:

o        Leading market positions in well established industries.

o        High rates of return on funds employed.

o        Conservative capitalization structure with moderate reliance on debt
         and ample asset protection.

o        Broad margins in earnings coverage of fixed financial charges and high
         internal cash generation.

o        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.

                                      100

MARCH 31, 2008Annual Report
        to Shareholders**DWS Value Builder Fund****Contents****click here**Performance Summary**click here**Information About Your Fund's Expenses**click here**Portfolio Management Review**click here**Portfolio Summary**click here**Investment Portfolio**click here**Financial Statements**click here**Financial Highlights**click here**Notes to Financial Statements**click here**Report of Independent Registered Public Accounting Firm**click here**Tax Information**click here**Summary of Management Fee Evaluation by Independent Fee Consultant**click here**Directors and Officers**click here**Account Management Resources**This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before
        you invest.**Investments in mutual funds involve risk. Some funds have more risk than others. This fund is subject to stock market risk. Additionally, it invests in individual bonds whose yields and market values fluctuate so that your investment may be worth more or less than its original cost. Bond Investments are subject to interest rate risk such that when interest rates rise, the prices of the bonds, and thus the value of the
        fund, can decline and the investor can lose principal value. Moreover, although asset allocation among different asset classes generally limits risk and exposure to any one class, the risk remains that the investment advisor may favor an asset class that performs poorly relative to the other asset classes. Please read this fund's prospectus for specific details regarding its investments and risk profile.*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, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.**NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY***Performance SummaryMarch 31, 2008****All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit www.dws-scudder.com for the
        Fund's most recent month-end performance.****The maximum sales charge for Class A shares is 5.75%. For Class B shares, the maximum contingent deferred sales charge (CDSC) is 4% within the first year after purchase, declining to 0% after six years. Class C shares have no front-end sales charges but redemptions within one year of purchase may be subject to CDSC of 1%. Unadjusted returns do not reflect sales charges and would have been lower if they had.
        Institutional Class shares are not subject to sales charges.****The total annual fund operating expense ratios, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectuses dated March 7, 2008 are 1.42%, 2.30%, 2.18% and 1.08% for Class A, Class B, Class C and Institutional Class shares, respectively. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties)
        sections of this report for gross and net expense related disclosure for the period ended March 31, 2008. These ratios differ from the gross ratios disclosed in the fnancial highlights. The financial highlights do not include 0.20% of estimated underlying Fund expenses borne by the Fund for its investment in DWS Short Duration Plus Fund.****To discourage short-term trading, the Fund imposed a 2% redemption fee on shareholders redeeming shares held less than 15 days, which has the effect of lowering total return.**Returns and rankings for the 1-year, 3-year, 5-year and 10-year periods shown reflect a waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.Returns shown for Class C shares prior to its inception on April 8, 1998 are derived from the historical performance of Class A shares of DWS Value Builder Fund and have been adjusted to reflect the higher gross total annual operating expenses of Class C. Any difference in expenses will affect performance.**Average Annual Total Returns**(Unadjusted for Sales Charge) as of 3/31/08**DWS Value Builder Fund****1-Year****3-Year****5-Year****10-Year****Class A****-20.81%****-3.11%****5.76%****2.51%****Class B****-21.47%****-3.88%****4.95%****1.73%****Class C****-21.38%****-3.83%****4.99%****1.77%****Institutional Class****-20.46%****-2.80%****6.08%****2.78%**S&P 500® Index+-5.08%5.85%11.32%3.50%Blended Index++.29%5.83%8.56%4.66%*Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.***Growth of an Assumed $10,000 Investment**(Adjusted for Maximum Sales Charge)**[]DWS Value Builder Fund — Class A****[]S&P 500 Index+****[]Blended Index++**Yearly periods ended March 31**The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net initial investment of $9,425.****Comparative Results**(Adjusted for Maximum Sales Charge) as of 3/31/08**DWS Value Builder Fund****1-Year****3-Year****5-Year****10-Year****Class A**Growth of $10,000$7,464$8,573$12,472$12,075Average annual total return-25.36%-5.00%4.52%1.90%**Class B**Growth of $10,000$7,683$8,767$12,653$11,865Average annual total return-23.17%-4.29%4.82%1.73%**Class C**Growth of $10,000$7,862$8,893$12,756$11,913Average annual total return-21.38%-3.83%4.99%1.77%S&P 500 Index+Growth of $10,000$9,492$11,860$17,098$14,111Average annual total return-5.08%5.85%11.32%3.50%Blended Index++Growth of $10,000$10,029$11,853$15,078$15,773Average annual total return.29%5.83%8.56%4.66%*The growth of $10,000 is cumulative.***Growth of an Assumed $1,000,000 Investment****[]DWS Value Builder Fund — Institutional Class****[]S&P 500 Index+****[]Blended Index++**Yearly periods ended March 31**Comparative Results**as of 3/31/08**DWS Value Builder Fund****1-Year****3-Year****5-Year****10-Year****Institutional Class**Growth of $1,000,000$795,400$918,500$1,343,300$1,316,100Average annual total return-20.46%-2.80%6.08%2.78%S&P 500 Index+Growth of $1,000,000$949,200$1,186,000$1,709,800$1,411,100Average annual total return-5.08%5.85%11.32%3.50%Blended Index++Growth of $1,000,000$1,002,900$1,185,300$1,507,800$1,577,300Average annual total return.29%5.83%8.56%4.66%*The growth of $1,000,000 is cumulative.**The minimum investment for Institutional Class shares is $1,000,000.*+*The Standard & Poor's 500 (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.**Index returns assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.*++*The Blended Index is calculated using the performance of three unmanaged indices representative of stocks (S&P 500 Index), bonds (Lehman Brothers Intermediate US Government/Credit Index) and cash (Merrill Lynch 3-month US Treasury Bill Index) weighted by their corresponding proportion of the Fund's neutral position (stocks: 60%; bonds: 35%; cash: 5%). These results are summed to
        produce the aggregate benchmark. The Lehman Brothers Intermediate US Government/Credit Index is an unmanaged index comprising intermediate- and long-term government and investment-grade corporate debt securities. The unmanaged Merrill Lynch 3-month US Treasury Bill Index is representative of the 3-month Treasury market.**Index returns, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.***Net Asset Value and Distribution Information** **Class A****Class B****Class C****Institutional Class****Net Asset Value:**3/31/08$ 13.19$ 13.18$ 13.21$ 13.403/31/07$ 23.34$ 23.34$ 23.37$ 23.59**Distribution Information:**Twelve Months as of 3/31/08:Income Dividends$ .34$ .18$ .20$ .40Capital Gain Distributions$ 6.11$ 6.11$ 6.11$ 6.11**Class A Lipper Rankings — Mixed-Asset Target Allocation Growth Funds Category**as of 3/31/08**Period****Rank** **Number of Funds Tracked****Percentile Ranking (%)**1-Year665of6671003-Year536of5391005-Year411of4259710-Year193of22884**Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, rankings might have been less favorable. Rankings are for Class A shares; other share classes may vary.****Information About Your Fund's Expenses**As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in
        dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had they not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (October 31, 2007 to March 31, 2008).The tables illustrate your Fund's expenses in two ways:**Actual Fund Return.** This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number
        in the "Expenses Paid per $1,000" line under the share class you hold.**Hypothetical 5% Fund Return.** This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may
        not be used to estimate the actual ending account balance or expenses you paid for the period.Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.**Expenses and Value of a $1,000 Investment**for the six months ended March 31, 2008**Actual Fund Return****Class A****Class B****Class C****Institutional Class**Beginning Account Value 10/1/07$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00Ending Account Value 3/31/08$ 791.40$ 788.80$ 788.70$ 793.20Expenses Paid per $1,000*$ 6.05$ 9.21$ 9.52$ 4.30**Hypothetical 5% Fund Return****Class A****Class B****Class C****Institutional Class**Beginning Account Value 10/1/07$ 1,000.00$ 1,000.00$ 1,000.00$ 1,000.00Ending Account Value 3/31/08$ 1,018.25$ 1,014.70$ 1,014.35$ 1,020.20Expenses Paid per $1,000*$ 6.81$ 10.38$ 10.73$ 4.85**Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 366.***Annualized Expense Ratios****Class A****Class B****Class C****Institutional Class**DWS Value Builder Fund1.35%2.06%2.13%.96%For more information, please refer to the Fund's prospectus.**Portfolio Management Review****DWS Value Builder Fund: A Team Approach to Investing**Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for DWS Value Builder Fund. DIMA and its predecessors have more than 80 years of experience managing mutual funds and DIMA provides a full range of investment advisory services to institutional and retail clients.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 reached 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 funds, retail, private and commercial banking, investment banking and insurance.**Portfolio Manager***David Hone, CFA*Director of Deutsche Asset Management and Lead Portfolio Manager of the fund.Joined the fund in 2008.Joined Deutsche Asset Management in 1996 as an equity analyst for consumer cyclicals, consumer staples and financials.Prior to that, eight years of experience as an analyst for Chubb & Son.Portfolio manager for Large Cap Value; Lead portfolio manager for US Equity Income Fund Strategy: New York.BA, Villanova University.Effective March 15, 2008, Deutsche Investment Management Americas Inc. terminated its subadvisory agreement with Alex. Brown Investment Management. The fund is now managed by Portfolio Manager David Hone. In the following interview, Mr. Hone addresses the recent market backdrop, the fund's performance during the 12-month period ended March 31, 2008, and the strategy of the new management team.*The views expressed in the following discussion reflect those of the portfolio manager only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results.***Q: How did the US stock market perform during the annual period?****A:**The US stock market lost ground during the past year, a reflection of the increasingly challenging investment environment. During the first half of the reporting period, market performance was supported by the same factors that had underpinned the five-year bull market in equities: namely, a powerful combination of robust economic growth, rising corporate earnings and a strong
        appetite for risk among investors. However, starting in mid-August, all three factors were destabilized by the persistent weakness in housing prices and the sudden increase in defaults within the subprime mortgage sector. These events led to the downward repricing of securities tied to the mortgage market, causing asset write-downs by banks and raising questions about the true book values of financial institutions. In addition, the growing possibility of a recession led to downward
        revisions of corporate earnings estimates. The result was a negative return for the stock market as a whole, and particularly poor performance for the financial and housing-related sectors.In the bond market, the continued fallout from the subprime crisis and the growing likelihood of a recession sparked a "flight to quality." The result was a strong rally in US Treasuries, but underperformance for corporate issues in general and high-yield bonds in particular.**Q: How did the fund perform?****A:**The Class A shares of DWS Value Builder Fund had a total return of -20.81% during the 12-month period ended March 31, 2008. (Returns are unadjusted for sales charges. If sales charges had been included, returns would have been lower. Past performance is no guarantee of future results. Please see pages 4 through 7 for the
        performance of other share classes and more complete performance information.)The fund underperformed the 0.29% return of its blended benchmark, which is a weighted combination of three unmanaged indices: the Standard & Poor's 500® (S&P 500) Index (60%), the Lehman Brothers Intermediate Government/Credit Index (35%) and the Merrill Lynch 3-month T-bill index (5%).1 It also lagged the -5.08% return of the S&P 500 Index, which — unlike the fund — is invested
        entirely in equities. The fund trailed the -2.32% average return of the funds in its Lipper peer group, Mixed-Asset Target Allocation Growth Funds.21*The Blended Index is calculated using the performance of three unmanaged indices representative of stocks (S&P 500 Index), bonds (Lehman Brothers Intermediate US Government/Credit Index) and cash (Merrill Lynch 3-month US Treasury Bill Index) weighted by their corresponding proportion of the Fund's neutral position (stocks: 60%; bonds: 35%; cash: 5%). These results are summed to produce the
        aggregate benchmark. The Standard & Poor's 500 (S&P 500) Index is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.**The Lehman Brothers Intermediate US Government/Credit Index is an unmanaged index comprising intermediate- and long-term government and investment-grade corporate debt securities. The unmanaged Merrill Lynch 3-month US Treasury Bill Index is representative of the 3-month Treasury market.**Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.*2*The Lipper Mixed-Asset Target Allocation Growth Funds category is comprised of funds that by portfolio practice maintain a mix of between 60%-80% equity securities, with the remainder invested in bonds, cash and cash equivalents. Category returns assume reinvestment of dividends. It is not possible to invest directly into a Lipper category.***Q: Why did the fund underperform?****A:**The fund's underperformance stemmed from its positions in a number of financial stocks that were directly exposed to the subprime crisis. The leading detractors in this area were First Marblehead Corp., Citigroup, Inc., AmeriCredit Corp., Countrywide Financial Corp. and Freddie Mac. Outside of financials, notable detractors included the health care service providers Wellpoint, Inc.,
        Coventry Health Care, Inc., and Omnicare, Inc., the yellow pages company R.H. Donnelly Inc., and the telecommunications companies Virgin Mobile USA, Inc. and NII Holdings, Inc. With the exception of Citigroup, we have sold all of these positions from the fund since we assumed its management duties in March. The fund's fixed income weighting, which was invested entirely in corporate bonds and held a portion of assets in high-yield, also weighed on performance given the weakness in
        these market segments.**Q: What changes have you made to the equity portion of the fund?****A:**We have made a number of substantial changes since assuming responsibility for the fund. In restructuring the portfolio, we had two major objectives: 1) to increase the number of holdings in order to improve diversification, and 2) to reduce the fund's weighting in underperforming stocks where we felt low valuations were not supported by positive fundamentals. The result is that the
        fund now has a number of new holdings, while most of the stocks that weighed on its performance during the past year are no longer held.**Q: What criteria do you use in selecting stocks for the fund?****A:**We use a value-oriented investment style that employs measures such as price-to-earnings ratios, price-to-book ratios, dividend yields and free-cash flow yields. We focus on equities of higher-quality companies that are temporarily out of favor with the market, but we will only invest in those that offer favorable longer-term growth prospects. Downside risk is an important factor
        and is consistently considered as part of our buy/sell discipline. We take a more diversified approach to investing than the previous management team, spreading investments across most industries and generally limiting single security exposure to 1%-3% of the overall portfolio. While we are not limited in the size of the companies in which we can invest, we tend to have a large-cap bias. Our overall emphasis is on individual stock selection, fundamental research and a flexible approach
        to analyzing valuations.**Q: How will you manage the fixed income portion of the fund?****A:**While in the past the fund's bond investments were selected directly by its managers, we will now be investing the majority of this portion of the portfolio — typically 25% to 30% of assets — in DWS Short Duration Plus Fund. This fund invests primarily in government-issued and AAA-rated securities, and the majority of its holdings have maturities of less than three
        years.33*Credit quality is a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default.*The DWS Short Duration Plus Fund may use instruments including but not limited to futures, options and currency forwards. Derivatives may be more volatile and less liquid than traditional securities, and the fund could suffer losses on its derivatives positions. In the current market environment, mortgage-backed securities are experiencing increased volatility.We believe this change in approach, which potentially will result in lower exposure to corporate bonds than DWS Value Builder Fund had in the past, should help reduce the overall volatility in the fund's returns.**Q: Do you have any final thoughts for fund investors?****A:**With the changes made over the last few months, we feel that the portfolio's positioning is now appropriate for this stage of the market cycle. Notably, we believe the fund now has appropriate representation in each industry sector — meaning that our individual stock selection efforts, rather than the fund's sector allocations, will be the primary driver of performance. We
        believe this approach is more likely to reward investors over the long term.**Portfolio Summary****Asset Allocation**(As a % of Investment Portfolio)**3/31/08****3/31/07**   Common Stocks74%75%Open End Investment Company22%—Corporate Bonds4%24%Repurchase Agreements—1% 100%100%**Sector Diversification**(As a % of Common Stocks)**3/31/08****3/31/07**   Financials29%26%Consumer Staples12%7%Health Care11%22%Energy10%6%Telecommunication Services9%8%Industrials9%5%Information Technology7%9%Utilities6%—Consumer Discretionary4%17%Materials3%— 100%100%*Asset allocation and sector diversification are subject to change.***Ten Largest Equity Holdings at March 31, 2008**(23.7% of Net Assets)**1. ExxonMobil Corp.**Explorer and producer of oil and gas**3.5%****2. AT&T, Inc.**Provider of communications services**3.4%****3. General Electric Co.**Manufactures, distributes and markets electrical products**2.8%****4. JPMorgan Chase & Co.**Provider of global financial services**2.4%****5. FPL Group, Inc.**Provider of electric energy**2.2%****6. CVS Caremark Corp.**Operator of a drug store chain**2.1%****7. Bank of America Corp.**Provider of commercial banking services**1.9%****8. Verizon Communications, Inc.**Provider of advanced communication and information technology services**1.9%****9. Wells Fargo & Co.**Provider of various financial services**1.8%****10. Philip Morris International, Inc.**Sells and distributes tobacco products**1.7%***Portfolio holdings are subject to change.**For more complete details about the Fund's investment portfolio, see page 18. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to www.dws-scudder.com on or after the last day of the following month. In addition, the Fund's top ten holdings and other information about the Fund is posted on
        www.dws-scudder.com as of the calendar quarter-end on or after the 15th day following quarter-end. Please see the Account Management Resources section for contact information.*Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied 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.**Investment Portfolioas of March 31, 2008** **Shares****Value ($)**  **Common Stocks 71.4%****Consumer Discretionary 2.9%****Hotels Restaurants & Leisure 1.3%**Carnival Corp. (Unit)40,9001,655,632Pinnacle Entertainment, Inc.*49,700636,160 **2,291,792****Media 0.0%**Idearc, Inc.13,800**50,232****Multiline Retail 0.8%**J.C. Penney Co., Inc.17,000641,070Kohl's Corp.*15,500664,795 **1,305,865****Specialty Retail 0.8%**Abercrombie & Fitch Co. "A"18,700**1,367,718****Consumer Staples 8.8%****Beverages 1.5%**Diageo PLC (ADR)32,100**2,610,372****Food & Staples Retailing 2.1%**CVS Caremark Corp.91,200**3,694,512****Food Products 1.5%**Dean Foods Co.42,700857,843Unilever NV (NY Shares)49,7001,676,381 **2,534,224****Tobacco 3.7%**Altria Group, Inc.58,8001,305,360Philip Morris International, Inc.*58,8002,974,104UST, Inc.38,2002,082,664 **6,362,128****Energy 7.1%****Energy Equipment & Services 0.4%**Schlumberger Ltd.7,200**626,400****Oil, Gas & Consumable Fuels 6.7%**Chevron Corp.20,2001,724,272ConocoPhillips16,3001,242,223ExxonMobil Corp.70,6005,971,348Hess Corp.17,4001,534,332Marathon Oil Corp.24,5001,117,200 **11,589,375****Financials 20.5%****Capital Markets 3.5%**Ameriprise Financial, Inc.29,6001,534,760Lazard Ltd. "A"32,0001,222,400Morgan Stanley18,500845,450TD Ameritrade Holding Corp.*77,2001,274,572The Goldman Sachs Group, Inc.7,6001,256,964 **6,134,146****Commercial Banks 4.4%**BB&T Corp.39,3001,259,958PNC Financial Services Group, Inc.35,9002,353,963UnionBanCal Corp.13,600667,488Wachovia Corp.10,800291,600Wells Fargo & Co.104,8003,049,680 **7,622,689****Consumer Finance 0.5%**Discover Financial Services56,000**916,720****Diversified Financial Services 5.3%**Bank of America Corp.88,9003,370,199Citigroup, Inc.72,6001,555,092JPMorgan Chase & Co.97,2004,174,740 **9,100,031****Insurance 4.9%**Allstate Corp.59,1002,840,346American International Group, Inc.34,9001,509,425Lincoln National Corp.21,5001,118,000Loews Corp.73,4002,952,148 **8,419,919****Thrifts & Mortgage Finance 1.9%**New York Community Bancorp, Inc.132,8002,419,616Washington Mutual, Inc.80,200826,060 **3,245,676****Health Care 7.9%****Health Care Equipment & Supplies 2.3%**Baxter International, Inc.47,2002,729,104Zimmer Holdings, Inc.*15,5001,206,830 **3,935,934****Life Sciences Tools & Services 0.7%**PerkinElmer, Inc.52,900**1,282,825****Pharmaceuticals 4.9%**Abbott Laboratories43,8002,415,570Merck & Co., Inc.60,2002,284,590Novartis AG (ADR)26,8001,372,964Pfizer, Inc.53,0001,109,290Wyeth30,9001,290,384 **8,472,798****Industrials 6.3%****Aerospace & Defense 1.4%**Honeywell International, Inc.43,600**2,459,912****Electrical Equipment 0.9%**Emerson Electric Co.31,800**1,636,428****Industrial Conglomerates 4.0%**General Electric Co.129,7004,800,197Textron, Inc.37,0002,050,540 **6,850,737****Information Technology 5.1%****Communications Equipment 2.1%**Harris Corp.33,1001,606,343Nokia Oyj (ADR)66,1002,103,963 **3,710,306****Semiconductors & Semiconductor Equipment 0.7%**Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)118,100**1,212,887****Software 2.3%**Microsoft Corp.86,5002,454,870Symantec Corp.*92,8001,542,336 **3,997,206****Materials 2.0%****Containers & Packaging 0.4%**Packaging Corp. of America34,300**765,919****Metals & Mining 1.6%**Alcoa, Inc.75,900**2,736,954****Telecommunication Services 6.6%****Diversified Telecommunication Services**AT&T, Inc.152,1005,825,430Citizens Communications Co.209,3002,195,557Verizon Communications, Inc.91,7003,342,465 **11,363,452****Utilities 4.2%****Electric Utilities 3.2%**Duke Energy Corp.95,0001,695,750FPL Group, Inc.60,0003,764,400 **5,460,150****Multi-Utilities 1.0%**Wisconsin Energy Corp.40,800**1,794,792****Total Common Stocks** (Cost $119,817,764)**123,552,099** **Principal Amount ($)****Value ($)**  **Corporate Bonds 3.7%****Consumer Discretionary 2.4%**Blyth, Inc., 5.5%, 11/1/20135,110,000**4,228,525****Financials 1.3%**AmeriCredit Corp., 8.5%, 7/1/20153,000,000**2,190,000****Total Corporate Bonds** (Cost $7,103,574)**6,418,525** **Shares****Value ($)**  **Open End Investment Company 20.7%**DWS Short Duration Plus Fund "S" (a) (Cost $35,905,456)3,688,006**35,773,662** **% of Net Assets****Value ($)**  **Total Investment Portfolio** (Cost $162,826,794)+95.8**165,744,286****Other Assets and Liabilities, Net**4.2**7,307,241****Net Assets**100.0**173,051,527****Non-income producing security.*(a)*DWS Short Duration Plus Fund, an affiliated fund, is managed by Deutsche Investment Management Americas Inc.*+*The cost for federal income tax purposes was $163,154,814. At March 31, 2008, net unrealized appreciation for all securities based on tax cost was $2,589,472. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $5,559,103 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax
        cost over value of $2,969,631.**ADR: American Depositary Receipts.**The accompanying notes are an integral part of the financial statements.***Financial Statements****Statement of Assets and Liabilities**as of March 31, 2008**Assets**Investments:Investments in securities, at value (cost $126,921,338)$ 129,970,624Investment in DWS Short Duration Plus Fund, at value (cost $35,905,456)35,773,662Total investments, at value (cost $162,826,794)165,744,286Cash16,556,765Receivable for investments sold2,470,918Interest receivable180,223Dividends receivable118,610Receivable for Fund shares sold51,167Other assets51,585Total assets185,173,554**Liabilities**Payable for investments purchased10,149,188Payable for Fund shares redeemed1,572,071Accrued management fee137,460Other accrued expenses and payables263,308Total liabilities12,122,027**Net assets, at value****$ 173,051,527****Net Assets Consist of**Net unrealized appreciation (depreciation) on investments2,917,492Accumulated net realized gain (loss)37,057,348Paid-in capital133,076,687**Net assets, at value****$ 173,051,527***The accompanying notes are an integral part of the financial statements.***Statement of Assets and Liabilities**as of March 31, 2008 (continued)**Net Asset Value****Class A****Net Asset Value** and redemption price(a) per share ($142,947,058 ÷ 10,833,601 shares of capital stock outstanding, $.001 par value, 50,000,000 shares authorized**$ 13.19**Maximum offering price per share (100 ÷ 94.25 of $13.19)**$ 13.99****Class B****Net Asset Value,** offering and redemption price(a) (subject to contingent deferred sales charge) per share ($2,988,433 ÷ 226,691 shares of capital stock outstanding, $.001 par value, 15,000,000 shares authorized)**$ 13.18****Class C****Net Asset Value,** offering and redemption price(a) (subject to contingent deferred sales charge) per share ($6,403,345 ÷ 484,791 shares of capital stock outstanding, $.001 par value, 15,000,000 shares authorized)**$ 13.21****Institutional****Net Asset Value,** offering and redemption price(a) per share ($20,712,691 ÷ 1,545,435 shares of capital stock outstanding, $.001 par value, 15,000,000 shares authorized)**$ 13.40**(a)*Redemption price per share for shares held less than 15 days is equal to net asset value less a 2% redemption fee.**The accompanying notes are an integral part of the financial statements.***Statement of Operations**for the year ended March 31, 2008**Investment Income**Income:Interest$ 5,278,068Dividends2,695,481Dividends — from DWS Short Duration Plus Fund154,956Total Income8,128,505Expenses:Management fee2,203,724Administration fee305,639Distribution and service fees779,662Services to shareholders382,718Custodian fee13,617Professional fees103,466Directors' fees and expenses13,720Reports to shareholders85,024Registration fees66,341Other27,303Total expenses before expense reductions3,981,214Expense reductions(16,316)Total expenses after expense reductions3,964,898**Net investment income****4,163,607****Realized and Unrealized Gain (Loss)**Net realized gain (loss) from investments92,165,941Change in net unrealized appreciation (depreciation) on investments(150,313,308)**Net gain (loss)****(58,147,367)****Net increase (decrease) in net assets resulting from operations****$ (53,983,760)***The accompanying notes are an integral part of the financial statements.***Statement of Changes in Net Assets****Increase (Decrease) in Net Assets****Years Ended March 31,****2008****2007**Operations:Net investment income$ 4,163,607$ 7,230,199Net realized gain (loss)92,165,94153,616,532Change in net unrealized appreciation (depreciation)(150,313,308)(22,462,866)Net increase (decrease) in net assets resulting from operations(53,983,760)38,383,865Distributions to shareholders from:Net investment income:Class A(4,046,363)(5,396,420)Class B(56,575)(88,768)Class C(117,748)(141,052)Institutional(727,977)(1,173,475)Net realized gains:Class A(72,712,433)(30,614,658)Class B(1,865,586)(984,163)Class C(3,528,109)(1,497,456)Institutional(11,070,945)(3,831,356)Total distributions(94,125,736)(43,727,348)Fund share transactions:Proceeds from shares sold18,697,47250,753,204Reinvestment of distributions85,377,64540,203,699Cost of shares redeemed(189,620,765)(216,982,813)Redemption fees26995Net increase (decrease) in net assets from Fund share transactions(85,545,379)(126,025,815)**Increase (decrease) in net assets**(233,654,875)(131,369,298)Net assets at beginning of period406,706,402538,075,700Net assets at end of period (including undistributed net investment income of $0 and $427,880, respectively)**$ 173,051,527****$ 406,706,402***The accompanying notes are an integral part of the financial statements.***Financial Highlights****Class A****Years Ended March 31,****2008****2007****2006****2005****2004****Selected Per Share Data****Net asset value, beginning of period****$ 23.34****$ 23.79****$ 23.49****$ 23.51****$ 16.75***Income (loss) from investment operations:*Net investment incomea.27.37.38.39.37Net realized and unrealized gain (loss)(3.97)1.65.93(.02)6.80**Total from investment operations**(3.70)2.021.31.377.17*Less distributions from:*Net investment income(.34)(.35)(.41)(.39)(.41)Net realized gains(6.11)(2.12)(.60)——**Total distributions**(6.45)(2.47)(1.01)(.39)(.41)Redemption fees.00*.00*.00*.00*—**Net asset value, end of period****$ 13.19****$ 23.34****$ 23.79****$ 23.49****$ 23.51**Total Return (%)b(20.81)c8.71c5.661.5743.22**Ratios to Average Net Assets and Supplemental Data**Net assets, end of period ($ millions)143336412466451Ratio of expenses before expense reductions (%)1.301.251.171.141.15Ratio of expenses after expense reductions (%)1.291.231.171.141.15Ratio of net investment income (%)1.371.551.601.701.77Portfolio turnover rate (%)7311191713a*Based on average shares outstanding during the period.*b*Total return does not reflect the effect of any sales charges.*c*Total return would have been lower had certain expenses not been reduced.***Amount is less than $.005.***Class B****Years Ended March 31,****2008****2007****2006****2005****2004****Selected Per Share Data****Net asset value, beginning of period****$ 23.34****$ 23.80****$ 23.50****$ 23.52****$ 16.75***Income (loss) from investment operations:*Net investment incomea.09.18.20.22.22Net realized and unrealized gain (loss)(3.96)1.65.93(.03)6.79**Total from investment operations**(3.87)1.831.13.197.01*Less distributions from:*Net investment income(.18)(.17)(.23)(.21)(.24)Net realized gains(6.11)(2.12)(.60)——**Total distributions**(6.29)(2.29)(.83)(.21)(.24)Redemption fees.00*.00*.00*.00*—**Net asset value, end of period****$ 13.18****$ 23.34****$ 23.80****$ 23.50****$ 23.52**Total Return (%)b(21.47)c7.83c4.86.8342.20**Ratios to Average Net Assets and Supplemental Data**Net assets, end of period ($ millions)310163560Ratio of expenses before expense reductions (%)2.212.091.921.911.90Ratio of expenses after expense reductions (%)2.142.041.921.911.90Ratio of net investment income (%).52.74.85.931.02Portfolio turnover rate (%)7311191713a*Based on average shares outstanding during the period.*b*Total return does not reflect the effect of any sales charges.*c*Total return would have been lower had certain expenses not been reduced.***Amount is less than $.005.***Class C****Years Ended March 31,****2008****2007****2006****2005****2004****Selected Per Share Data****Net asset value, beginning of period****$ 23.37****$ 23.81****$ 23.52****$ 23.53****$ 16.76***Income (loss) from investment operations:*Net investment incomea.11.19.20.22.21Net realized and unrealized gain (loss)(3.96)1.66.92(.02)6.80**Total from investment operations**(3.85)1.851.12.207.01*Less distributions from:*Net investment income(.20)(.17)(.23)(.21)(.24)Net realized gains(6.11)(2.12)(.60)——**Total distributions**(6.31)(2.29)(.83)(.21)(.24)Redemption fees.00*.00*.00*.00*—**Net asset value, end of period****$ 13.21****$ 23.37****$ 23.81****$ 23.52****$ 23.53**Total Return (%)b(21.38)c7.92c4.81.8842.18**Ratios to Average Net Assets and Supplemental Data**Net assets, end of period ($ millions)616242933Ratio of expenses before expense reductions (%)2.062.001.921.891.90Ratio of expenses after expense reductions (%)2.061.981.921.891.90Ratio of net investment income (%).60.80.85.951.02Portfolio turnover rate (%)7311191713a*Based on average shares outstanding during the period.*b*Total return does not reflect the effect of any sales charges.*c*Total return would have been lower had certain expenses not been reduced.***Amount is less than $.005.***Institutional Class****Years Ended March 31,****2008****2007****2006****2005****2004****Selected Per Share Data****Net asset value, beginning of period****$ 23.59****$ 24.02****$ 23.71****$ 23.73****$ 16.91***Income (loss) from investment operations:*Net investment incomea.34.44.44.45.42Net realized and unrealized gain (loss)(4.02)1.67.95(.02)6.87**Total from investment operations**(3.68)2.111.39.437.29*Less distributions from:*Net investment income(.40)(.42)(.48)(.45)(.47)Net realized gains(6.11)(2.12)(.60)——**Total distributions**(6.51)(2.54)(1.08)(.45)(.47)Redemption fees.00*.00*.00*.00*—**Net asset value, end of period****$ 13.40****$ 23.59****$ 24.02****$ 23.71****$ 23.73**Total Return (%)(20.46)b9.00b5.951.8243.64**Ratios to Average Net Assets and Supplemental Data**Net assets, end of period ($ millions)21448689125Ratio of expenses before expense reductions (%).93.95.92.90.90Ratio of expenses after expense reductions (%).92.94.92.90.90Ratio of net investment income (%)1.741.841.851.942.02Portfolio turnover rate (%)7311191713a*Based on average shares outstanding during the period.*b*Total return would have been lower had certain expenses not been reduced.***Amount is less than $.005.***Notes to Financial Statements****A. Significant Accounting Policies**DWS Value Builder Fund (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, diversified management investment company organized as a Maryland corporation.The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A
        shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher on-going expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares do not convert into another class. Institutional Class shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses
        than other classes.Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as services to shareholders, distribution and service fees and certain other class-specific expenses. Differences in class-level expenses may
        result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.**Security Valuation.** Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Equity securities are valued at the most recent sale price or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security is traded most extensively. Securities for which no
        sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.Debt securities are valued by independent pricing services approved by the Directors of the Fund. If the pricing services are unable to provide valuations, the securities are valued at the most recent bid quotation or evaluated price, as applicable, obtained from a broker-dealer. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate,
        maturity, type of issue, trading characteristics and other data, as well as broker quotes.Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Directors.**New Accounting Pronouncements.** In September 2006, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007.
        As of March 31, 2008 management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.In addition, in March 2008, FASB issued Statement of Financial Accounting Standards No. 161 ("FAS 161") Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133. FAS 161 requires enhanced disclosure about an entity's derivative and hedging activities. FAS 161 is effective for fiscal years beginning after November 15, 2008. Management is currently evaluating the impact the adoption of
        FAS 161 will have on the Fund's financial statement disclosures.**Repurchase Agreements.** The Fund may enter into repurchase agreements with certain banks and broker/dealers whereby the Fund, through its custodian or sub-custodian bank, receives delivery of the underlying securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the value is equal to at least the principal amount of the
        repurchase price plus accrued interest. The custodian bank holds the collateral in a separate account until the agreement matures. If the value of the securities falls below the principal amount of the repurchase agreement plus accrued interest, the financial institution deposits additional collateral by the following business day. If the financial institution either fails to deposit the required additional collateral or fails to repurchase the securities as agreed, the Fund has the
        right to sell the securities and recover any resulting loss from the financial institution. If the financial institution enters into bankruptcy, the Fund's claims on the collateral may be subject to legal proceedings.**Federal Income Taxes.** The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable income to its shareholders.The Fund has reviewed the tax positions for each of the three open tax years as of March 31, 2008 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.**Distribution of Income and Gains.** Net investment income of the Fund is declared and distributed to shareholders quarterly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.Earnings and profits distributed to shareholders on redemptions on Fund shares ("tax equalization") may be utilized by the Fund to the extent permissible, as part of the Fund's dividends-paid deduction on its federal tax returns. During the year ended March 31, 2008, the Fund utilized tax equalization.The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to certain securities sold at a loss. As a result, net investment income and net realized gain (loss) on investment transactions for
        a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.At March 31, 2008, the Fund's components of distributable earnings (accumulated losses) on a tax-basis were as follows:Undistributed ordinary income*$ 731,846Undistributed net long-term capital gains$ 36,653,522Unrealized appreciation (depreciation) on investments$ 2,589,472In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows: **Years Ended March 31,** **2008****2007**Distributions from ordinary income*$ 7,915,309$ 6,799,715Distributions from long-term capital gains$ 86,210,427$ 36,927,633**For tax purposes short-term capital gains distributions are considered ordinary income distributions.***Redemption Fees.** The Fund imposes a redemption fee of 2% of the total redemption amount on the Fund shares redeemed or exchanged within 15 days of buying them, either by purchase or exchange. This fee is assessed and retained by the Fund for the benefit of the remaining shareholders. The redemption fee is accounted for as an addition to paid-in capital. Effective April 1, 2008, the Fund no longer
        imposes the 2% redemption fee on Fund shares acquired on or after that date.**Contingencies.** In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.**Other.** Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Realized gains and losses from investment transactions are recorded on an
        identified cost basis. All discounts are accreted for tax and financial reporting purposes.**B. Purchases and Sales of Securities**During the year ended March 31, 2008 purchases and sales of investment securities (excluding short-term investments) aggregated $210,376,395 and $385,848,230, respectively.**C. Related Parties****Management Agreement.** Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating
        to investments to be purchased, sold or entered into by the Fund having delegated such responsibility to the Fund's sub-advisor, Alex. Brown Investment Management, who prior to March 15, 2008 served as subadvisor and was paid by the Advisor for its services. On March 5, 2008 the Fund's Board Members approved the termination of Alex. Brown Investment Management as the Fund's Subadvisor. Effective March 15, 2008 the Advisor assumed all day-to-day responsibilities that were previously
        delegated to Alex. Brown Investment Management.Under the Investment Management Agreement with the Advisor, the Fund pays a monthly management fee based on the Fund's average daily net assets, computed and accrued daily and payable monthly, at the following annual rates:First $50 million of the Fund's average daily net assets.915%Next $50 million of such net assets.765%Next $100 million of such net assets.715%Over $200 million of such net assets.615%The Fund did not impose a portion of its management fee by an amount equal to the amount of the management fee borne by the Fund as a shareholder of the DWS Short Duration Plus Fund.Accordingly, for the year ended March 31, 2008, the Advisor waived a portion of its fee pursuant to the management agreement aggregating $4,070 and the amount imposed aggregated $2,199,654, which was the equivalent to an annual effective rate of 0.72% of the Fund's average daily net assets.Effective October 1, 2007 through September 31, 2008, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of Class B (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) to the extent necessary to maintain the operating expenses at 2.06%.**Administration Fee.** Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended March 31, 2008 the Advisor
        received an Administration Fee of $305,639, of which $16,073 is unpaid.**Service Provider Fees.** DWS Scudder Investments Service Company ("DWS-SISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DWS-SISC and DST Systems, Inc. ("DST"), DWS-SISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent
        functions to DST. DWS-SISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the year ended March 31, 2008 the amounts charged to the Fund by DWS-SISC were as follows:**Services to Shareholders****Total Aggregated****Waived****Unpaid at March 31, 2008**Class A$ 293,366$ —$ 60,068Class B15,6904,5863,464Class C15,733—3,285Institutional Class2,216—397 **$ 327,005****$ 4,586****$ 67,214****Distribution and Service Fees.** Under the Fund's Class B and Class C 12b-1 Plans, DWS Scudder Distributors, Inc. ("DWS-SDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of each of Class B and C shares. In accordance with Fund's Underwriting and Distribution Services agreement, DWS-SDI enters into related selling group agreements with various
        firms at various rates for sales on Class B and C shares. For the year ended March 31, 2008 the Distribution Fee was as follows:**Distribution Fee****Total Aggregated****Unpaid at March 31, 2008**Class B$ 48,511$ 2,401Class C91,8045,105 **$ 140,315****$ 7,506**In addition, DWS-SDI provides information and administrative services for a fee ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DWS-SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the year ended March 31, 2008 the
        Service Fee was as follows:**Service Fee****Total Aggregated****Unpaid at March 31, 2008****Annual Effective Rate**Class A$ 593,087$ 25,572.24%Class B15,939567.25%Class C30,3211,417.25% **$ 639,347****$ 27,556** **Underwriting Agreement and Contingent Deferred Sales Charge.** DWS-SDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended March 31, 2008 aggregated $6,664.In addition, DWS-SDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares
        redeemed. For the year ended March 31, 2008 the CDSC for Class B and C shares aggregated $20,608 and $195, respectively. A deferred sales charge of up to 1% is assessed on certain redemption of Class A shares. For the year ended March 31, 2008 DWS-SDI received $2,391 for Class A shares.**Typesetting and Filing Service Fees.** Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended March 31, 2008 the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" aggregated $31,267, of which $9,666 is unpaid.**Directors' Fees and Expenses.** During the period ended March 31, 2008, the Fund paid each Director compensation for his or her services. Each Independent Director received an aggregated annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each fund in the Fund
        Complex for which he or she serves. In addition, the Chairperson of the Board and the Chairperson of each committee of the Board receive additional compensation for their services. Payment of such fees and expenses is allocated among all such funds described above in direct proportion to their relative net assets.**Cash Management QP Trust.** Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in the Cash Management QP Trust (the "QP Trust"), and other affiliated funds managed by the Advisor. The QP Trust seeks to provide as high a level of income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay the Advisor a management fee for the
        affiliated funds' investments in the QP Trust.**D. Fee Reductions**The Fund has entered into an arrangement with its custodian and transfer agent whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund's custodian expenses. During the year ended March 31, 2008 the Fund's custodian fee was reduced by $701 and $6,959, respectively, for custody and transfer agent credits earned.**E. Line of Credit**The Fund and other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by JPMorgan Chase Bank, N.A. for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, pro rata based upon net assets, among each of the
        Participants. Interest is calculated at the Federal Funds Rate plus 0.35 percent. The Fund may borrow up to a maximum of 10 percent of its net assets under the agreement.**F. Share Transactions**The following table summarizes share and dollar activity in the Fund: **Year Ended March 31, 2008****Year Ended March 31, 2007** **Shares****Dollars****Shares****Dollars****Shares sold**Class A913,738$ 17,601,3621,335,633$ 31,410,194Class B12,013236,52314,585344,205Class C19,299365,14022,106521,312Institutional26,570494,447765,72118,477,493* * **$ 18,697,472** **$ 50,753,204****Shares issued to shareholders in reinvestment of distributions**Class A3,922,503$ 69,609,2131,430,805$ 33,136,721Class B94,0911,704,69140,551939,027Class C194,6543,458,57865,8491,526,167Institutional595,87910,605,163196,5784,601,784* * **$ 85,377,645** **$ 40,203,699****Shares redeemed**Class A(8,386,691)$ (159,522,218)(5,714,115)$ (135,812,962)Class B(317,672)(6,259,849)(297,805)(7,030,246)Class C(430,829)(8,051,024)(387,552)(9,175,125)Institutional(957,595)(15,787,674)(2,649,917)(64,964,480)* * **$ (189,620,765)** **$ (216,982,813)****Redemption fees****$ 269** **$ 95****Net increase (decrease)**Class A(3,550,450)$ (72,311,536)(2,947,677)$ (71,265,964)Class B(211,568)(4,318,635)(242,669)(5,747,012)Class C(216,876)(4,227,159)(299,597)(7,127,636)Institutional(335,146)(4,688,049)(1,687,618)(41,885,203)* * **$ (85,545,379)** **$ (126,025,815)****Report of Independent Registered Public Accounting Firm****To the Board of Directors and Shareholders of DWS Value Builder Fund:**In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of DWS Value Builder Fund (the "Fund") at March 31, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the
        periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting
        Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our
        audits, which included confirmation of securities at March 31, 2008 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.Boston, Massachusetts
                    May 23, 2008PricewaterhouseCoopers LLP**Tax Information(Unaudited)**For corporate shareholders, 34% of the income dividends paid during the Fund's fiscal year ended March 31, 2008 qualified for the dividends received deduction.For federal income tax purposes, the Fund designates $3,562,000, or the maximum amount allowable under tax law, as qualified dividend income.The Fund paid distributions of $5.89 per share from net long-term capital gains during its year ended March 31, 2008, of which 100% represents 15% rate gains.Pursuant to Section 852 of the Internal Revenue Code, the Fund designates $97,142,000 as capital gain dividends for its year ended March 31, 2008, of which 100% represents 15% rate gains.Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 621-1048.**Summary of Management Fee Evaluation by Independent Fee Consultant**October 26, 2007Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Scudder Funds. My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund
        companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2007, including my qualifications, the evaluation process for each of the DWS Scudder Funds, consideration of certain complex-level
        factors, and my conclusions.**Qualifications**For more than 30 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and
        analysis.Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past several years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.I hold a Master of Business Administration degree, with highest honors, from Harvard University; and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds, serve on the board of directors of a private market research company, and have served in various leadership and financial
        oversight capacities with non-profit organizations.**Evaluation of Fees for each DWS Scudder Fund**My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 136 Fund portfolios in the DWS Scudder Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented
        separately).In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper, Strategic Insight, and Morningstar databases and drew on my industry knowledge and experience.To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.**Fees and Expenses Compared with Other Funds**The competitive fee and expense evaluation for each fund focused on two primary comparisons:The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.**DeAM's Fees for Similar Services to Others**DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Scudder Fund. These similar products included the other DWS Scudder Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the
        subject Fund's asset level.Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some
        differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.**Costs and Profit Margins**DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including
        distribution. A later section comments on overall profitability.**Economies of Scale**Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Scudder Fund compares with this
        industry observation, I reviewed:The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.**Quality of Service — Performance**The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.**Complex-Level Considerations**While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:I reviewed DeAM's profitability analysis for all DWS Scudder funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.I considered how aggregated DWS Scudder Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.**Findings**Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the
        management fees charged the DWS Scudder Funds are reasonable.
        Thomas H. Mack**Directors and Officers**The following table presents certain information regarding the Board Members and Officers of the Fund. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board
        Member is c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33904. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also
        serve in similar capacities with other funds in the fund complex. The Length of Time Served represents the year in which the Board Member joined the board of one or more DWS funds now overseen by the Board.**Independent Board Members****Name, Year of Birth, Position with the Fund and Length of Time Served1****Business Experience and Directorships During the Past Five Years****Number of Funds in DWS Fund Complex Overseen**Dawn-Marie Driscoll (1946)Chairperson since 20042Board Member since 1987President, Driscoll Associates (consulting firm); Executive Fellow, Center for Business Ethics, Bentley College; formerly: Partner, Palmer & Dodge (1988-1990); Vice President of Corporate Affairs and General Counsel, Filene's (1978-1988). Directorships: Trustee of eight 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 College; Trustee, Southwest Florida Community Foundation (charitable organization). Former Directorships: Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees)134Paul K. Freeman (1950)Vice Chairperson since 2008Board Member since 19933Consultant, World Bank/Inter-American Development Bank; formerly: Project Leader, International Institute for Applied Systems Analysis (1998-2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986-1998)132John W. Ballantine (1946)Board Member since 19993Retired; formerly: Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996-1998); Executive Vice President and Head of International Banking (1995-1996). 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 Bank134Henry P. Becton, Jr. (1943)Board Member since 1990Vice Chair, WGBH Educational Foundation. Directorships: Association of Public Television Stations; Becton Dickinson and Company4 (medical technology company); Belo Corporation4 (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 Service134Keith R. Fox (1954)Board Member since 1996Managing General Partner, Exeter Capital Partners (a series of private equity funds). Directorships: Progressive Holding Corporation (kitchen goods importer and distributor); Natural History, Inc. (magazine publisher); Box Top Media Inc. (advertising); The Kennel Shop (retailer)134Kenneth C. Froewiss (1945)Board Member since 2001Clinical Professor of Finance, NYU Stern School of Business (1997-present); Member, Finance Committee, Association for Asian Studies (2002-present); Director, Mitsui Sumitomo Insurance Group (US) (2004-present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996)134Richard J. Herring (1946)Board Member since 1990Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton 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)134William McClayton (1944)Board Member since 20043Chief Administrative Officer, Diamond Management & Technology 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 Festival134Rebecca W. Rimel (1951)Board Member since 1995President and Chief Executive Officer, The Pew Charitable Trusts (charitable organization) (1994 to present); Trustee, Thomas Jefferson Foundation (charitable organization) (1994 to present); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001-2007); Trustee, Pro Publica (2007-present) (charitable organization); formerly: Executive Vice President, The Glenmede Trust Company
                (investment trust and wealth management) (1983-2004); Board Member, Investor Education (charitable organization) (2004-2005); Director, Viasys Health Care4 (January 2007-June 2007)134William N. Searcy, Jr. (1946)Board Member since 1993Private investor since October 2003; Trustee of eight open-end mutual funds managed by Sun Capital Advisers, Inc. (since October 1998); formerly: Pension & Savings Trust Officer, Sprint Corporation4 (telecommunications) (November 1989-September 2003134Jean Gleason Stromberg (1943)Board Member since 1997Retired; formerly: Consultant (1997-2001); Director, US Government Accountability Office (1996-1997); Partner, Fulbright & Jaworski, L.L.P. (law firm) (1978-1996). 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)134Robert H. Wadsworth(1940)Board Member since 19993President, Robert H. Wadsworth & Associates, Inc. (consulting firm) (1983 to present).* *137**Interested Board Member****Name, Year of Birth, Position with the Fund and Length of Time Served1****Business Experience and Directorships During the Past Five Years****Number of Funds in Fund Complex Overseen**Axel Schwarzer5 (1958)Board Member since 2006Managing Director6, Deutsche Asset Management; Head of Deutsche Asset Management Americas; CEO of DWS Scudder; formerly: board member of DWS Investments, Germany (1999-2005); formerly: Head of Sales and Product Management for the Retail and Private Banking Division of Deutsche Bank in Germany (1997-1999); formerly: 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)134**Officers7****Name, Year of Birth, Position with the Fund and Length of Time Served8****Principal Occupation(s) During Past 5 Years and Other Directorships Held**Michael G. Clark9 (1965)President, 2006-presentManaging Director6, Deutsche Asset Management (2006-present); President of 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 Millette10 (1962)Vice President and Secretary, 1999-presentDirector6, Deutsche Asset ManagementPaul H. Schubert9 (1963)Chief Financial Officer, 2004-presentTreasurer, 2005-presentManaging Director6, Deutsche Asset Management (since July 2004); formerly: Executive Director, Head of Mutual Fund Services and Treasurer for UBS Family of Funds (1998-2004); Vice President and Director of Mutual Fund Finance at UBS Global Asset Management (1994-1998)Patricia DeFilippis11 (1963)Assistant Secretary, 2005-presentVice President, Deutsche Asset Management (since June 2005); formerly: Counsel, New York Life Investment Management LLC (2003-2005); legal associate, Lord, Abbett & Co. LLC (1998-2003)Elisa D. Metzger11 (1962)Assistant Secretary 2005-presentDirector6, Deutsche Asset Management (since September 2005); formerly: Counsel, Morrison and Foerster LLP (1999-2005)Caroline Pearson10 (1962)Assistant Secretary, 1997-presentManaging Director6, Deutsche Asset ManagementPaul Antosca10 (1957)Assistant Treasurer, 2007-presentDirector6, Deutsche Asset Management (since 2006); Vice President, The Manufacturers Life Insurance Company (U.S.A.) (1990-2006)Jack Clark10 (1967)Assistant Treasurer, 2007-presentDirector6, Deutsche Asset Management (since 2007); formerly: Vice President, State Street Corporation (2002-2007)Kathleen Sullivan D'Eramo10 (1957)Assistant Treasurer, 2003-presentDirector6, Deutsche Asset ManagementDiane Kenneally10 (1966)Assistant Treasurer, 2007-presentDirector6, Deutsche Asset ManagementJason Vazquez11 (1972)Anti-Money Laundering Compliance Officer, 2007-presentVice President, Deutsche Asset Management (since 2006); formerly: AML Operations Manager for Bear Stearns (2004-2006), Supervising Compliance Principal and Operations Manager for AXA Financial (1999-2004)Robert Kloby11 (1962)Chief Compliance Officer, 2006-presentManaging Director6, Deutsche Asset Management (2004-present); formerly: Chief Compliance Officer/Chief Risk Officer, Robeco USA (2000-2004); Vice President, The Prudential Insurance Company of America (1988-2000); E.F. Hutton and Company (1984-1988)J. Christopher Jackson11 (1951)Chief Legal Officer, 2006-presentDirector6, Deutsche Asset Management (2006-present); formerly: Director, Senior Vice President, General Counsel and Assistant Secretary, Hansberger Global Investors, Inc. (1996-2006); Director, National Society of Compliance Professionals (2002-2005) (2006-2009)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*Represents the year Ms. Driscoll was first appointed Chairperson of certain DWS funds.*3*Elected to the Board April 1, 2008.*4*A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.*5*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 funds.*6*Executive title, not a board directorship.*7*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 funds.*8*The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds.*9*Address: 345 Park Avenue, New York, New York 10154.*10*Address: Two International Place, Boston, MA 02110.*11*Address: 280 Park Avenue, New York, New York 10017.**The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 621-1048.***Account Management Resources** **For More Information**The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within Classes A, B and C also have the ability to purchase, exchange or redeem shares using this system.For more information, contact your financial advisor. You may also access our automated telephone system or speak with a DWS Scudder representative by calling the appropriate number below:**For shareholders of Classes A, B, C and Institutional Class:**(800) 621-1048**Web Site****www.dws-scudder.com**View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day.**Obtain prospectuses and applications,**blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more.**Written Correspondence****DWS Scudder**PO Box 219151
                    Kansas City, MO 64121-9151**Proxy Voting**A description of the fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period endedJune 30is available on our Web site — www.dws-scudder.com (click on "proxy voting"at the bottom
                of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.**Principal Underwriter**If you have questions, comments or complaints, contact:**DWS Scudder Distributors, Inc.**222 South Riverside Plaza
                    Chicago, IL 60606-5808(800) 621-1148 **Class A****Class B****Class C****Institutional Class****Nasdaq Symbol**FLVBXFVBBXFVBCXFLIVX**CUSIP Number**23339J 10223339J 20123339J 30023339J 409**Fund Number**415615715535**Notes****SEMI-ANNUAL REPORT FOR DWS VALUE BUILDER FUND****DATED SEPTEMBER 30, 2008 [TO BE UPDATED]****DWS BALANCED FUND****PART C - OTHER INFORMATION** **Item 15.****Indemnification.**     Article IV of the Registrant's Amended and Restated Declaration of Trust (“Declaration of Trust”) (Exhibit (1), which is filed herein) 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 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 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 suchofficers 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 DeutscheInvestment Management Americas Inc., was acquired by Deutsche Bank AG, not including 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 "Non-interested 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 Non-interested 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-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 16.****Exhibits.** 1. Amended and Restated Agreement and Declaration of Trust dated June 2, 2008 is filed herein.2. By-laws dated April 1, 2008 are filed herein.3. Not applicable.4. Form of Agreement and Plan of Reorganization is filed herein as Exhibit A to Part A of this Registration Statement.5.(a)Text of Share Certificate. (Incorporated by reference to Post-Effective Amendment No. 49 to the Registrant's Registration Statement.) (b)Redesignation of Series dated November 16, 2005. (Incorporated by reference to Post-Effective Amendment No. 59 to Registrant's Registration Statement.)    (c)Redesignation of Classes of Shares of Beneficial Interest and Amended and Restated Establishment and Designation of Classes of Shares of Beneficial Interest dated May 10, 2006. (Incorporated by reference to Post-Effective Amendment No. 70 to Registrant's Registration Statement.)6.(a)Amended and Restated Investment Management Agreement between the Registrant and Deutsche Asset Management Americas Inc. dated May 1, 2008 is filed herein. (b)Sub-Advisory Agreement between Deutsche Investment Management Americas Inc. and Deutsche Asset Management International GmbH dated April 1, 2008 is filed herein.7. Underwriting and Distribution Services Agreement between the Registrant and Scudder Distributors, Inc. dated March 15, 2005 (Incorporated by reference to Post-Effective Amendment No. 59 to the Registration Statement.)8.(a)Form of Retirement Agreement between the Registrant and each of Donald Dunaway, James Edgar, Robert Hoffman and Shirley Peterson dated November 14, 2007. (Incorporated by reference to Post-Effective Amendment No. 72 to the Registration Statement.) (b)Indemnification and Reimbursement Agreement between the Registrant and DIMA dated November 14, 2007. (Incorporated by reference to Post-Effective Amendment No. 72 to the Registration Statement.)9. Form of Master Custodian Agreement, dated November 17, 2008, between the Registrant and State Street Bank and Trust Company is filed herein.10.(a)Rule 12b-1 Plan between Scudder Total Return Fund (Class A Shares) and Scudder Distributors, Inc. dated July 1, 2001. (Incorporated by reference to Post-Effective Amendment No. 58 to Registrant's Registration Statement.) (b)Amended and Restated Rule 12b-1 Plan between Scudder Total Return Fund (Class C Shares) and Scudder Distributors, Inc. dated July 1, 2001. (Incorporated by reference to Post-Effective Amendment No. 58 to Registrant's Registration Statement.) (c)Shareholder Services Agreement for Class A, Class B and Class C dated April 5, 2002 between Scudder Total Return Fund and Scudder Distributors, Inc. (Incorporated by reference to Post-Effective Amendment No. 59 to the Registrant's Registration Statement.) (d)Amended and Restated Rule 12b-1 Plan between Scudder Total Return Fund (Class R shares) and Scudder Distributors, Inc. dated October 1, 2003. (Incorporated by reference to Post-Effective Amendment No. 61 to the Registrant's Registration Statement.) (e)Amended and Restated Rule 12b-1 Plan between Scudder Total Return Fund (Class B shares) and Scudder Distributors, Inc. dated October 1, 2004. (Incorporated by reference to Post-Effective Amendment No. 65 to Registrant's Registration Statement.) (f)Amended and Restated Multi-Distribution System Plan (Rule 18f-3 Plan), dated September 22, 2004. (Incorporated by reference to Post-Effective Amendment No. 65 to the Registration Statement.)   11. Opinion and Consent of Vedder Price P.C. to be filed by amendment.12. Form of Tax Opinion and Consent of Willkie Farr & Gallagher LLP to be filed by amendment.13.(a)Agency Agreement. (Incorporated by reference to Post-Effective Amendment No. 49 to Registrant's Registration Statement.) (b)Supplement to Agency Agreement between Registrant and Investors Fiduciary Trust Company dated June 1, 1997. (Incorporated by reference to Post-Effective Amendment No. 51 to the Registrant's Registration Statement.) (c)Supplement to Agency Agreement dated January 1, 1999. (Incorporated by reference to Post-Effective Amendment No. 57 to Registrant's Registration Statement.) (d)Transfer Agency and Service Agreement between Registrant and Scudder Service Corporation dated March 15, 2005. (Incorporated by reference to Post-Effective Amendment No. 59 to Registrant's Registration Statement.) (e)Second Amendment to the Agency Agreement dated March 13, 2006.(Incorporated by reference to Post-Effective Amendment No. 70 to Registrant's Registration Statement.) (f)Administrative Services Agreement with Zurich Scudder Investments, Inc., dated July 1, 2001. (Incorporated by reference to Post-Effective Amendment No. 58 to Registrant's Registration Statement.) (g)Fund Accounting Agreement between the Registrant and Scudder Fund Accounting Corporation dated December 31, 1997. (Incorporated by reference to Post-Effective Amendment No. 51 to the Registrant's Registration Statement.) (h)Letter of Indemnity to the Scudder Funds dated September 10, 2004.(Incorporated by reference to Post-Effective Amendment No. 63 to theRegistrant's Registration Statement.) (i)Letter of Indemnity to the Scudder Funds dated September 10, 2004.(Incorporated by reference to Post-Effective Amendment No. 63 to theRegistrant's Registration Statement.) (j)Letter of Indemnity to the Independent Trustees dated September 10, 2004. (Incorporated by reference to Post-Effective Amendment No. 63 to the Registrant's Registration Statement.) (k)Form of Mutual Fund Rule 22c-2 Information Sharing Agreement between DWS Scudder Distributors, Inc. and certain financial intermediaries. (Incorporated by reference to Post-Effective Amendment No. 71 to the Registration Statement.) (l)Form of Expense Limitation Agreement between the Registrant and Deutsche Investment Management Americas Inc. (Incorporated by reference to Post-Effective Amendment No. 72 to the Registration Statement.)    (m)Form of Amended and Restated Administrative Services Agreement between the Registrant and Deutsche Investment Management Americas, Inc. dated October 1, 2008 is filed herein.14.(a)Consent of Ernst & Young LLP to be filed by amendment. (b)Consent of PricewaterhouseCoopers to be filed by amendment.15. Not applicable.16. Form of Proxy is filed herein and appears following Part A of this Registration Statement.**Item 17.** **Undertakings.**(1) The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by
                            persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.(2) The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the
                            securities at that time shall be deemed to be the initial bona fide offering of them.   SIGNATURESAs required by the Securities Act of 1933, this Registration Statement has been signed on behalf of the registrant, in the City of New York, and State of New York, on the 1st day of December 2008.  DWS BALANCED FUNDBy:/s/ Michael G. Clark       Michael G. Clark       President As required by the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on December 1, 2008. **Signature****Title**/s/ Michael G. ClarkMichael G. ClarkPresident/s/ Paul SchubertPaul SchubertChief Financial Officer and TreasurerDawn-Marie Driscoll*Dawn-Marie DriscollChairperson and DirectorJohn W. Ballantine *John W. BallantineDirectorHenry P. Becton, Jr.*Henry P. Becton, Jr.DirectorKeith R. Fox*Keith R. FoxDirectorPaul K. Freeman *Paul K. FreemanDirectorKenneth C. Froewiss*Kenneth C. FroewissDirectorRichard J. Herring*Richard J. HerringDirectorWilliam McClayton*William McClaytonDirector  Rebecca W. Rimel*Rebecca W. RimelDirector   Axel Schwarzer*Axel SchwarzerDirectorWilliam N. Searcy, Jr.*William N. Searcy, Jr.DirectorJean Gleason Stromberg*Jean Gleason StrombergDirectorRobert H. Wadsworth*Robert H. WadsworthDirector*By/s/ John Millette       John Millette**  **Attorney-in-fact pursuant to the power of attorney filed herein. **DWS BALANCED FUND** Power of Attorney KNOW ALL PERSONS BY THESE PRESENTS, that the following persons, whose signatures appear below, do hereby constitute and appoint Thomas Connors, John Millette and Caroline Pearson, and each of them, severally, or if more than one acts, a majority of them, their true and lawful attorney and agent to execute in their name, place and stead (in such capacity) any and all amendments to enable DWS BALANCED
            FUND (the “Fund”) to comply with the Securities Act of 1933, as amended (the “1933 Act”) and the Investment Company Act of 1940, as amended (the “1940 Act”), and any rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, in connection with the Fund’s Registration Statement on Form N-14 pursuant to the 1933 Act and the 1940 Act, together with any and all pre- and post-effective amendments thereto,
            including specifically, but without limiting the generality of the foregoing, the power and authority to sign in the name and on behalf of the undersigned as a trustee of the Fund such Registration Statement and any and all such pre- and post-effective amendments filed with the Securities and Exchange Commission under the 1933 Act and the 1940 Act, and any other instruments or documents related thereto, and the undersigned does hereby ratify and confirm all that said
            attorney-in-fact and agent, or either of them or their substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. **SIGNATURES****TITLE****DATE** /s/John W. BallantineJohn W. BallantineTrusteeNovember 21, 2008 /s/Henry P. Becton, Jr.Henry P. Becton, Jr.TrusteeNovember 21, 2008 /s/Dawn-Marie DriscollDawn-Marie DriscollTrusteeNovember 21, 2008 /s/Keith R. FoxKeith R. FoxTrusteeNovember 21, 2008 /s/Paul K. FreemanPaul K. FreemanTrusteeNovember 21, 2008 /s/Kenneth C. FroewissKenneth C. FroewissTrusteeNovember 21, 2008 /s/Richard J. HerringRichard J. HerringTrusteeNovember 21, 2008 /s/William McClaytonWilliam McClaytonTrusteeNovember 21, 2008 /s/Rebecca W. RimelRebecca W. RimelTrusteeNovember 21, 2008 /s/William N. Searcy, Jr.William N. Searcy, Jr.TrusteeNovember 21, 2008 /s/Jean Gleason StrombergJean Gleason StrombergTrusteeNovember 21, 2008    /s/Robert H. WadsworthRobert H. WadsworthTrusteeNovember 21, 2008 /s/Axel SchwarzerAxel SchwarzerTrusteeNovember 21, 2008  INDEX OF EXHIBITS EXHIBIT NUMBEREXHIBIT TITLE1Amended and Restated Declaration of Trust2By-laws6Amended and Restated Investment Management Agreement7Sub-Advisory Agreement9Form of Master Custodian Agreement13(m)Form of Amended and Restated Administrative Services Agreement   
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