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Many economists will tell you not to worry about

inflation. While the consumer price index (CPI),

a widely used gauge of consumer spending, rose

0.5% in December 2010, its largest monthly gain since

June 2009, so-called core inflation (which eliminates

volatile food and energy costs) was a relatively weak

0.1%. For 2010, the CPI rose just 1.5% and core inflation

rose only 0.8%. That places core inflation well below

the US Federal Reserve Board’s (Fed’s) target of 2%—

and the 2% to 2.5% annualized rates prevailing before

the Great Recession of 2008 and 2009.

Many inflation watchers argue that the downtrend does

not seem to have ended. They point out that with the

unemployment rate at 9.4% as of December 2010,

wages are going to stay low for a long time, which will

help rein in inflation. If anything, these economists say,

slack in the labor markets suggests that core inflation

might continue to fall for awhile.

Concerns have been raised that the US government’s attempts to stimulate the economy could unleash a wave of runaway inflation. Is inflation in the future—and if it is, is your portfolio prepared for one of the greatest risks to personal wealth?

Inflation is a general rise in prices. It is often attributed to

the Fed’s monetary policy. Pumping more money into

the economy dilutes the buying power of the money in

the economy. So, in an inflationary environment, a dollar

buys less tomorrow than it does today.

WHAT IS INFLATION?

Many investors agree. Consider the bond market:

The 10-year Treasury note was yielding just 3.43% as

of 1/24/11, according to the Federal Reserve. At the

same time, traditional hedges against inflation—Treasury

inflation protected securities (TIPS) and gold—have

recently fallen in price, according to the Barclays Capital

US TIPS Index and Dow Jones US Gold Mining Index.

But there are three reasons we call inflation “the

phantom menace”—meaning you need to be aware of it.

The phantom menaceIs the inflation threat hype —or real?

2 » The phantom menace

OFFICIAL INFLATION DATA

MAY BE UNDERSTATED

Over the past 30 years, the government has

made many changes to the way it calculates

inflation. Because of these changes, inflation

today may not be the same thing as inflation

the last time we saw it.

According to economist John Williams at Shadow

Government Statistics, if we still calculated inflation

the way we did under the Carter presidency,

today’s CPI would be closer to 10% than 1.5%.

Jim Grant, the host and editor of the newsletter

Grant’s Interest Rate Observer, has said that the

Fed arguing that the inflation rate is too low is “like

the New York Police Department complaining

about the lack of crimes.”

How can this be the case? The way inflation

is calculated today, if steak prices boom, it’s

assumed that you will buy cheaper hamburger

instead—making inflation nonexistent.

Or, consider the case of hedonics, which is

a method of estimating a product’s value.

Hedonics asks the question, "How much of

a product's price increase is a function of

inflation, and how much is a function of quality

improvement?” Let’s say, for example, that you

purchase a television. The quality of televisions

has increased over time, with many improved

features, such as plasma screens and HDMI

connections. If you buy a more expensive TV

today, then, is that the result of inflation? The

government says no—and uses a complex

calculation to adjust inflation for product quality

enhancements. Its argument: In a way, the

price of the improved TV is going down, not up,

because you’re getting more for your money.

On the following pages, we look more

deeply into the history, evolution and current

composition of the CPI.

OFFICIAL INFLATION DATA

LOOKS BACKWARD

Inflation numbers calculate what has happened,

not what is going to happen. But if you look beyond

labor costs and consider raw materials, you’ll see

that prices are rising. Consider a 10/21/10 article in

The Wall Street Journal, “Dilemma Over Pricing,”

which points out what is obvious to anyone who

follows commodities: The cost of nearly everything

is going up. As the article notes: “Corn is up 44%,

milk is up 6.5%, hot rolled coil steel is up 4%, copper

is up 29% and oil is up 14% from a year ago.”

Sooner or later, these raw material price

increases are going to show up in consumer

goods. “Across Corporate America, more

companies are wrestling with when and how

much to raise prices as raw materials costs

climb,” says The Wall Street Journal article.

In fact, prices may already be rising. “There

might not have been a second round of

quantitative easing if Federal Reserve Chairman

Ben Bernanke shopped at Walmart,” says a

1/11/10 CNBC.com article. “A new pricing survey

of products sold at the world’s largest retailer

showed a 0.6% price increase in just the last

two months, according to MKM Partners. At that

rate, prices would be close to 4% higher a year

from now, double the Fed’s mandate.”

And it’s just not Walmart that is raising prices.

MKM surveyed 86 everyday grocery items such

as food and detergent made by national brands,

and found a “meaningful increase.”

Rethinking inflationThree reasons we call inflation the phantom menace

The phantom menace » 3

ECONOMICS 101

The Fed, in an attempt to stimulate the US economy,

has engaged in another round of quantitative

easing. This easing, dubbed QE2, would involve

massive purchases of US Treasuries—which is

designed to push down yields on Treasuries and

bonds and drive up investment and consumption.

There are many fancy names for what the Fed

is doing, but essentially, the policymakers are

creating more money—and in doing so, diluting the

purchasing power of the dollar.

What the economy needs, the Fed’s thinking

goes, is some inflation. Indeed, according to

some insiders, the Fed is seeking an inflation

rate in the 4% to 6% range for just “a couple of

years”—but if this spills over into 1970s-style

double-digit inflation, then so be it.

“That’s because the central thinking at the Fed

is that while it knows how to deal with inflation

and recognizes the problems associated with

fairly high rates of price appreciation, embedded

deflation is…harder to defeat,” says a 10/14/10

Inflation fears aren’t just domestic. In an interview with The Wall Street Journal, European Central

Bank President Jean-Claude Trichet warned that inflation pressures in the Eurozone must be watched

closely, and urged central bankers everywhere to ensure that higher energy and food prices don't gain

a foothold in the global economy. Why should Americans care? Because inflation abroad could be

exported back to the United States in the form of higher prices for consumer goods.

INFLATION FEARS ARE GLOBAL

article in The Wall Street Journal, “Choosing the

1970s Over the 1930s.”

WHY DOES IT MATTER?

Inflation is near a historical low. As a result, we

believe it will eventually rise and pose a threat.

That may not happen immediately—but in our

opinion, it will happen.

When inflation does show up, by the time the

bond market notices it is here, we believe it may

be too late for many investors—specifically, those

who are invested in asset classes that typically

perform poorly in inflationary environments,

which is most of them, as we explain on page 9.

What can investors do in such a challenging

economic environment? In our opinion, what we

have always encouraged them to do. First, don’t

remain on the sidelines, as leaving assets in cash

could eat away at their value in an inflationary

environment. Second, invest intelligently, in asset

classes and mutual funds that could prepare

a portfolio for the threat of rising inflation—

whenever it occurs.

The sources, opinions and forecasts expressed are those of DWS Investments, are as of 12/31/10 and any forward-looking statements may not actually come to pass. This information is subject to change at any time based on market and other conditions and should not be construed as investment advice. All opinions and estimates reflect our judgement as of the date of this report and are subject to change without notice. Such opinions and estimates, including forecast returns, involve a number of assumptions that may not prove valid.


The CPI, which is produced by the US Bureau of Labor Statistics, measures changes in the prices of

consumer goods and services. It samples more than 80,000 items per month—everything from laundry

detergent to apparel to vehicles.

CPI basicsUnderstanding the index that defines inflation

CPI category Weight

Housing 42%

Transportation 17%

Food and beverage 15%

Medical care 7%

Recreation 6%

Education and communication 6%

Apparel 4%

Other goods and services 3%

Sources for chart and table: US Bureau of Labor Statistics as of 12/31/10.

ONE-YEAR CPI PERCENTAGE (12/31/26–12/31/10)

The CPI "market basket" is developed from

detailed expenditure information provided by

individuals from around the country. For the

current CPI, this information was collected

from the Consumer Expenditure Surveys for

2007 and 2008.

Over the two-year period, expenditure

information from approximately 28,000 weekly

diaries and 60,000 quarterly interviews was used

to determine the importance, or weight, of the

more than 200 items in the CPI.

–15%

–10%

–5%

0%

5%

10%

15%

20%

25%

12/1012/9812/8612/7412/6212/5012/3812/26

Average CPI3.11%

2010 CPI1.50%


The impact of changes to the CPINew calculation methodologies understate inflation

CPI calculations have not remained constant since 1917, when the index started.

In 1983, the index stopped using housing prices, switching instead to owners’ equivalent rent, which

is the amount of rent that could be paid to substitute a currently owned house for an equivalent rental

property. It is now the largest part of the CPI.

In 1998, the index broadened the use of product quality enhancements, or hedonics. As we have

already noted, hedonics is a method of estimating a product’s value. Let’s say, for example, that you

purchase a television. The quality of televisions has increased over time, with many improved features,

such as plasma screens and HDMI connections. If you buy a more expensive television today, then, is

that the result of inflation? The government says no—and uses a complex calculation to adjust inflation

for product quality enhancements. Its argument: In a way, the price of the improved television is going

down, not up, because you’re getting more for your money.

In 1999, the CPI began using product substitutions (assuming, for example, that if the price of steak

rises, consumers will buy hamburger instead).

These changes may have led the CPI to significantly understate inflation. Below we show what the

CPI would be today using older methods of calculating CPI.

HAVE CPI CHANGES LED TO UNDERSTATED INFLATION?

Sources for chart: Morningstar (except pre-1983 and pre-1990 CPI method estimates, which are from Shadowstats.com, BLS and S&P) as of 12/31/10.

0%

2%

4%

6%

8%

10%

1.50% 4.80% 8.90%

Current CPI Pre-1990CPI method estimate

Pre-1983CPI method estimate


PRICES ARE ADJUSTED HIGHER TO REFLECT PRODUCT QUALITY ENHANCEMENTS

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$250 $1,250 $1,345 $1,250

TV A 27-inch, CRT, HDTV

TV B 42-inch,plasma, HDTV

TV A 27-inch,CRT, HDTV

TV B 42-inch,plasma, HDTV

Original price Adjusted price

Implied inflation–7.25%

Impliedinflation400%

Behind changing CPI numbersThe impact of owners’ equivalent rent and hedonics

OWNERS’ EQUIVALENT RENT MITIGATES HOUSING PRICE SWINGS (12/31/01–12/31/10)

Sources for top chart: US Bureau of Labor Statistics and S&P, as of 12/31/10 (for housing prices) and 11/30/10 (for owners’ equivalent rent). Source for bottom chart: US Bureau of Labor Statistics as of 12/31/10. Past performance is no guarantee of future results.

–20%

–10%

0%

10%

20%

2010200920082007200620052004200320022001

Housing prices CPI owners’ equivalent rent

The CPI understatedinflation during the

housing market bubble.

Is the housing marketdecline understating

deflation?

How is price adjusted? TV A is no longer available and has been replaced by TV B. Rather than use the 400% price difference between the two TVs to measure inflation, the US Bureau of Labor Statistic uses a complex formula to determine TV A’s “quality-adjusted” price. When this formula is applied, TV A costs not $250, but $1,345.


Inflation or deflation?In today’s economy, it’s both

While core consumer inflation rose just 0.1% in December 2010, suggesting that inflation is tame,

that number belies what many consumers feel in their wallets: Raw material prices are climbing, and

as a result, across America, companies are raising the prices of their goods and services. The reason

inflation isn’t obvious, perhaps, is that not all prices are rising. We’re currently seeing inflation in the

prices of goods we need, and deflation in the prices of goods we want. The tables below illustrate.

NEEDS (BASIC GOODS)HAVE INCREASED IN PRICE

10 largest category increases in price the last 12 months

Inflation rate

Butter +21.88%

Fuel oil +16.51%

Lamb and organ meats +16.23%

Lamb and mutton +15.93%

Gasoline (all types) +13.85%

Bacon and related products +13.73%

Other pork +12.82%

Delivery services +12.67%

Ham, excluding canned +11.41%

Uncooked beef and veal +10.81%

WANTS (LUXURY ITEMS)HAVE DECREASED IN PRICE

10 largest category decreases in price the last 12 months

Inflation rate

Televisions –19.06%

Photographic equipment –13.55%

Other video equipment –13.48%

Other furniture –11.40%

Computer software and accessories –10.50%

Tomatoes –10.50%

Window coverings –8.22%

Dishes and flatware –7.64%

Video casettes and discs –7.59%

Lettuce –7.45%

FAST FACTS

■■ General Mills, a global food company, said it increased the prices of a quarter of its breakfast cereals

in November 2010 as a result of rising grain and other commodity prices.

■■ United Technologies, which builds helicopters, jet engines, elevators and air conditioners, says that

higher prices for commodities will represent a $40 million to $50 million expense headwind in 2011.

■■ Supervalu, a grocery retailer, lowered its fiscal 2011 earnings outlook in October 2010 because the

prices it pays for its products are rising.

Sources for charts: US Bureau of Labor Statistics and myinflationrate.com, as of December 2010. Source for fast facts: The Wall Street Journal, “Dilemma Over Pricing,” 10/21/10. Highlighted rows are the items of most interest to the average consumer based on the opinions of DWS Investments. The sources, opinions and forecasts expressed are those of DWS Investments, are as of 12/31/10 and any forward-looking statements may not actually come to pass. This information is subject to change at any time based on market and other conditions and should not be construed as investment advice. All opinions and estimates reflect our judgement on the date of this report and are subject to change without notice. Such opinions and estimates, including forecast returns, involve a number of assumptions that may not prove valid.


Floating-rate loans and commoditiesYour best options for fighting inflation?

We’ve explained why many people believe inflation could rise—and with inflation expectations high

and interest rates near historic lows, do you really want to keep your money on the sidelines?

What can investors do in such a challenging economic environment? As we noted previously,

we recommend what we have always recommended: Invest intelligently.

Consider floating-rate loans and commodities. Historically, floating-rate loans and commodities have

been positively correlated to inflation—meaning that as inflation has risen so too have the returns of

floating-rate loans and commodities.

FAST FACTS

■■ Floating-rate loans, also referred to as senior-secured loans, are debt instruments with floating-rate

coupons. Coupons for floating-rate loans are tied to a variable rate, most commonly the London

Interbank Offered Rate (LIBOR), and generally reset every 30 to 90 days.

■■ Commodities are basic goods such as oil, metals and livestock. They can be broken down into

five broad sub-sectors: energy, base metals (also referred to as industrial metals), precious metals,

agriculture and livestock.

Source for chart: Morningstar, as of 12/31/10. Correlation is historical and does not guarantee future results. Asset classes are represented as follows: floating-rate loans, Morningstar Bank Loan category; commodities, Dow Jones UBS Commodity Index; US TIPS, Morningstar Inflation Protected Bond category; short-term bonds, Morningstar Short-Term Bond category; large-cap equities, Morningstar Large Blend category; intermediate-term bonds, Morningstar Intermediate-Term Bond category; large-cap equities, inflation, US Bureau of Labor Statistics, CPI All Urban NSA. Data is for illustrative purposes and does not represent any DWS fund. It is not possible to invest directly in a category. Correlation refers to how securities or asset classes perform in relation to each another and/or the market. A 1.0 correlation indicates that two security types move in exactly the same direction. A –1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relation in the movements.

15-YEAR CORRELATION OF ASSET CLASSES TO INFLATION (as of 12/31/10)

–0.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

1.00

–0.06

0.37

0.25

0.11

0.07

0.03

Inflation

Floating-rate loans

Commodities

US TIPS

Short-term bonds

Large-cap equities

Intermediate-term bonds


INVESTORS ARE UNDERWEIGHT POTENTIAL INFLATION FIGHTERS

How prepared are you?Investors are underweight inflation-fighting asset classes

Different asset classes perform differently in inflationary environments. We divided Morningstar

categories into those that we believe will perform well in inflationary or deflationary environments—or

neither. What did we find? That only 17% of investor assets are allocated to inflation-fighting categories.

WHAT ASSET CLASSES POTENTIALLY WORK DURING INFLATION OR DEFLATION?

For inflation, consider international stocks and bonds, high-yield bonds, hard assets and alternative asset classes.

For deflation, consider cash, US Treasury and agency securities, high-grade corporate bonds and some alternatives (such as market neutral).

Neither Deflation Inflation

$6.7 trillion $3.8 trillion $2.1 trillion

53.00% 30.38% 16.62%

53%Neither

17%Inflation

30%Deflation

Source for table and chart: DWS Investments (for inflation indicators and category representation) and Strategic Insight (for assets) as of 12/31/10. “Underweight” means an investor or investment holds a lower weighting in a given sector or security than in another sector, security or benchmark. “Overweight” means the fund has a higher weighting. Deflation includes the Morningstar Intermediate Government, Intermediate-Term Bond, Long Government, Long-Term Bond, Market Neutral, Money Market Tax-Free, Money Market Taxable, Muni National Long and Short Government categories. Inflation includes the Morningstar Bank Loan, Commodities Agriculture, Commodities Broad Basket, Commodities Energy, Commodities Industrial Metal, Commodities Miscellaneous, Commodities Precious Metals, Diversified Emerging Markets, Diversified Pac/Asia, Emerging Markets Bond, Equity Energy, Equity Precious Metals, Europe Stock, Foreign Large Blend, Foreign Large Growth, Foreign Large Value, Foreign Small/Mid Growth, Foreign Small/Mid Value, Global Real Estate, High Yield Bond, Inflation-Protected Bond, Japan Stock, Latin America Stock, Natural Resources, Pac/Asia ex-Japan Stock and Real Estate categories. Neither includes the Morningstar Bear Market, Communications, Conservative Allocation, Consumer Discretionary, Consumer Staples, Convertibles, Currency, Financial, Health, High Yield Muni, Industrials, Large Blend, Large Growth, Large Value, Long-Short, Mid Blend, Mid Growth, Mid Value, Miscellaneous Sector, Moderate Allocation, Multisector Bond, Muni CA Intermediate/Short, Muni CA Long, Muni MA, Muni MN, Muni National Intermediate, Muni National Short, Muni NJ, Muni NY Intermediate/Short, Muni NY Long, Muni OH, Muni PA, Muni Single State Intermediate, Muni Single State Long, Muni Single State Short, Retirement Income, Short-Term Bond, Small Blend, Small Growth, Small Value, Target Date 2000-2010, Target Date 2011-2015, Target Date 2016-2020, Target Date 2021-2025, Target Date 2026-2030, Target Date 2031-2035, Target Date 2036-2040, Target Date 2041-2045, Target Date 2050+, Technology, Ultrashort Bond, Utilities, World Allocation, World Bond and World Stock categories.


DWS Enhanced Commodity Strategy FundA history of inflation-fighting power

Commodities may help provide a measure of potential protection against rising inflation because they

are real assets,so their prices typically rise with inflation. In fact, going back to 1976, commodities have

outperformed stocks and bonds in years when inflation has increased.

COMMODITIES HAVE PERFORMED WELL WHEN INFLATION HAS RISEN(average annual total return, 12/31/76–12/31/10)

DWS ENHANCED COMMODITY STRATEGY FUND: A UNIQUE STRATEGY

■■ DWS Enhanced Commodity Strategy Fund invests in derivatives representing 19 different commodities.1

■■ The commodities allocation is adjusted using three active management strategies: A tactical

strategy reduces net commodity exposure when trends suggest that commodities are overvalued; a

relative value strategy actively overweights, underweights or shorts each commodity depending on

how “cheap” or “expensive” portfolio managers think it is; and a roll enhancement strategy seeks

to roll into the futures contract that may have the potential to optimize returns.2, 3, 4

■■ Remaining assets are invested in a diversified fixed-income portfolio.

Source for chart: Morningstar, Bloomberg, FactSet as of 12/31/10. Past performance is no guarantee of future results. The chart above is for illustrative purposes only and do not represent any DWS fund. Commodities, bonds and stocks are represented by the S&P Goldman Sachs Commodities Index (which measures an unleveraged, long-only investment in futures that are broadly diversified across the spectrum of commodities), the Barclays Capital US Aggregate Index (which is widely considered representative of the US bond market) and the S&P 500 Index (which is widely considered representative of the US stock market), respectively. Equity index returns include reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. The values of equity investments are more volatile than those of other securities. Fixed-income investments are subject to interest-rate risk, and their value will decline as interest rates rise. Commodities are long-term investments and should be considered part of a diversified portfolio; market-price movements, regulatory changes, economic changes and adverse political or financial factors could have a significant impact on performance.

0%

15%

30%

45%

27.8% 6.2% 6.1% 28.3% 8.4% 5.9%

Commodities Stocks Bonds Commodities Stocks Bonds

Below average and rising Above average and rising

Average inflation is represented by the average US Consumer Price Index (CPI) inflation growth rate from 12/31/76 through 12/31/10, which was 4.4%. Inflation was considered rising when it was higher than it was one year prior.


DWS Floating Rate Plus FundPoised to perform regardless of when inflation rises?

Floating-rate loans may provide a potential measure of protection against rising inflation because their

coupons “float.” In other words, the coupon rate is set at a premium over a going market interest rate

(such as LIBOR), and thus will tend to rise if market interest rates rise. History shows that floating-rate loans

have performed well as long as inflation has risen—regardless of how much level of inflation has risen.

FLOATING-RATE LOANS’ AVERAGE ANNUAL TOTAL RETURN (2/31/89–12/31/10)

DWS FLOATING RATE PLUS FUND: A COMPELLING OPTION

FOR CURRENT TIMES

■■ DWS Floating Rate Plus Fund seeks to deliver attractive returns over time by maximizing yield while

maintaining relative stability of principal. The fund does this by utilizing a “par-loan” approach, which

focuses on loans portfolio managers believe will repay at face value. Portfolio managers look at the

entire credit spectrum with an emphasis on relatively higher-quality issues (B and BB), cash flow and

hard asset value. They also seek to mitigate downside risk.

■■ The fund (Class S shares) ranked in the top 30% and 7% of the Morningstar Bank Loan category

over the one- and three-year periods (as of 12/31/10; based on total returns; of 43/140 and 8/116

funds, respectively).

■■ The fund (Class S shares) was the only fund in the Morningstar Bank Loan category to rank in the

top 35% during the 2008 bear market, the top 24% during the 2009 bull market and top 30% in

2010 (as of 12/31/10; based on total returns; of 46/127, 32/134 and 43/140 funds, respectively.

Source for chart and text: Morningstar as of 12/31/10. Past performance is no guarantee of future results. This chart is for illustrative purposes only and does not represent any DWS fund. Floating-rate loans are represented by the Morningstar Bank Loan category. Rankings and ratings are historical and do not guarantee future results. Class S shares of DWS Floating Rate Plus Fund were ranked as follows in the Morningstar Bank Loan category: one-year, 43/140 funds; three-year, 8/116 funds; five year, not available; 10-year, not available. Rankings are based on a fund’s total return with distributions reinvested. Rankings of other share classes may vary.

0%

2%

4%

6%

8%

10%

9.7% 3.9%

Rising inflation Falling inflation

© 2011 DWS Investments Distributors, Inc. All rights reserved. PM113158 (02/11) R-20789-1 INFLATION-600

OBTAIN A PROSPECTUS To obtain a summary prospectus, if available, or prospectus, download one from www.dws-investments.com, talk to your financial representative or call (800) 621-1048. We advise you to carefully consider the product’s objectives, risks, charges and expenses before investing. The summary prospectus and prospectus contain this and other important information about the investment product. Please read the prospectus carefully before you invest. All investments involve risk, including potential loss of principal.

DWS Investments is part of Deutsche Bank’s Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

DWS Investments Distributors, Inc.222 South Riverside Plaza Chicago, IL 60606-5808www.dws-investments.com [email protected] (800) 621-1148

Investment products offered throughDWS Investments Distributors, Inc. Advisory services offered through Deutsche Investment Management Americas, Inc.

C000000

1 A derivative is a security whose price is based on an underlying asset. Common derivatives include futures, which are contracts obligating someone to buy or sell another asset (such as a stock or commodity) at a predetermined future date and price.

2 “Overweight” means the fund holds a higher weighting in a given sector or security than the benchmark; “underweight” means the fund holds a lower weighting.

3 Shorting is borrowing, then selling, a security with the expectation that the security will fall in value.4 Direct commodities investing entails buying a contract to buy or sell a specific commodity on a specific date. This contract, called a future, typically expires monthly. When a contract expires, passive commodity investing strategies automatically purchase—or “roll into”—the next available contract.

IMPORTANT RISK INFORMATIONDWS Enhanced Commodity Strategy Fund: This fund invests in commodity-linked derivatives, which may subject the fund to special risks. Market price movements or regulatory and economic changes will have a significant impact on the fund’s performance. Any fund that concentrates in a particular segment of the market will generally be more volatile than a fund that invests more broadly. A counterparty with whom the fund does business may decline in financial health and become unable to honor its commitments, which could cause losses for the fund. Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. See the prospectus for details. DWS Floating Rate Plus Fund: Loan investments are subject to interest-rate and credit risks. Floating-rate loans tend to be rated below investment grade and may be more vulnerable to economic or business changes than issuers with investment-grade credit. Adjustable rate loans are more sensitive to interest rate changes. The fund may use derivatives, including as part of its global alpha strategy. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. In certain situations, it may be difficult or impossible to sell an investment at an acceptable price. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. See the prospectus for details.

Nasdaq symbols Class A Class C Class S Class INST

DWS Floating Rate Plus Fund DFRAX DFRCX DFRPX DFRTX

DWS Enhanced Commodity Strategy Fund SKNRX SKCRX SKSRX SKIRX

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