UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

 

FORM N-CSR

 

| Investment Company Act file number | 811-06073 |
|------------------------------------|-----------|

 

Cash Management Portfolio

 (Exact Name of Registrant as Specified in Charter)

 

One South Street

Baltimore, MD  21202

(Address of principal executive offices)             (Zip code)

 

Registrant’s Telephone Number, including Area Code: (212) 454-7190

 

Paul Schubert

345 Park Avenue

New York, NY 10154

(Name and Address of Agent for Service)

 

| Date of fiscal year end: | 12/31 |
|--------------------------|-------|

 

| Date of reporting period: | 12/31/07 |
|---------------------------|----------|

 

 

**ITEM 1.**           **REPORT TO STOCKHOLDERS**

 

 

ANNUAL REPORT TO SHAREHOLDERS

**Cash Reserve Fund**

**Prime Series**

December 31, 2007

**Contents**

**Cash Reserve Fund — Prime Series**

**click here**   Portfolio Management Review

**click here**        Information About Your Fund's Expenses

**click here**       Portfolio Summary

**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**   Trustees and Officers

**Cash Management Portfolio**

**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**        Other Information

**click here**      Investment Management Agreement Approval

**click here**  Summary of Management Fee Evaluation by IndependentFee Consultant

**This report must be preceded or accompanied by a prospectus. To obtain aprospectus for any of our funds, please call (800) 730-1313 or visitwww.dws-scudder.com. We advise you to consider the fund's objectives, risks,charges and expenses carefully before investing. The prospectus contains thisand other important information about the fund. Please read the prospectuscarefully before you invest.**

**An investment in this fund is not insured or guaranteed by the Federal DepositInsurance Corporation or any other government agency. Although the fund seeksto preserve the value of your investment at $1.00 per share, it is possible to losemoney by investing in the fund. Please read this fund's prospectus for specificdetails regarding its risk profile.**

*DWS Scudder is part of Deutsche Asset Management, which is the marketing name inthe US for the asset management activities of Deutsche Bank AG, Deutsche Bank TrustCompany Americas, Deutsche Investment Management Americas Inc. and DWS TrustCompany.*

*NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUENOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY*

**Portfolio Management Review**

In the following interview, Lead Portfolio Manager Geoffrey Gibbsdiscusses the market environment and the portfolio managementteam's approach to managing Cash Reserves Fund Prime Seriesduring its most recent fiscal period ended December 31, 2007.

*The views expressed in the following discussion reflect those of the portfolio managers onlythrough the end of the period of the report as stated on the cover. The management team'sviews are subject to change at any time based on market and other conditions and shouldnot be construed as a recommendation. Past performance is no guarantee of future results.*

**Q: Will you discuss the market environment for the fund duringthe most recent fiscal period?**

**A:**In the first quarter of 2007, increasing defaults by subprimemortgage borrowers and losses on residential mortgage-backsecurities sparked volatility in the financial markets as investorswondered to what degree Wall Street and the banking communitywould be affected by a retrenchment in this market. As weentered the second half of the year, it became clear that severalfinancial firms would need to shed excess debt and sell assets inorder to cover significant losses. For much of August, buyers inthe credit markets had almost disappeared, replaced entirely bysellers. At the short end of the yield curve, asset-backedsecurities' yields spiked significantly, reflecting investors' creditconcerns, as did the London Interbank Offered Rate (LIBOR), theindustry standard for measuring one-year money marketrates.1,2,3 In response to this "credit crunch," as well as to fearsof an oncoming economic recession, the US Federal ReserveBoard (the Fed) cut the federal funds rate (the overnight ratecharged by banks when they borrow money from each other) atotal of one percentage point over three Federal Open MarketCommittee (FOMC) meetings (from September throughDecember 2007). As a means of injecting further liquidity into theglobal monetary system — as well as to persuade major banks toresume their accustomed levels of interbank lending — the Fedalso set up a temporary "term auction facility."4 By the end of theyear, these measures seemed to restore a more typical flow offunds and extension of credit, and LIBOR receded to a morecustomary interest rate "spread" (or difference in yield) comparedwith the federal funds rate.