Note 1--Organization and Significant Accounting Policies
BT Investment Funds (the "Trust") is registered under the Investment Company Act of 1940 (the "Act"), as
amended, as an open-end management investment company. The Trust was organized on July 21, 1986, as a
business trust under the laws of the Commonwealth of Massachusetts. The Capital Appreciation Fund (the
"Fund") is one of the funds offered to investors by the Trust. The Fund commenced operations and began offering
shares of beneficial interest on March 9, 1993. The Fund invests substantially all of its assets in the Capital
Appreciation Portfolio (the "Portfolio"). The Portfolio is an open-end management investment company registered
under the Act. The Fund seeks to achieve its investment objective by investing all of its investable assets in the
Portfolio. The value of such investment in the Portfolio reflects the Fund's proportionate interest in the net assets
of the Portfolio. At March 31, 1999, the Fund's investment was approximately 100% of the Portfolio.
The financial statements of the Portfolio, including a list of assets held are contained elsewhere in this report and
should be read in conjunction with the Fund's financial statements.
Valuation of securities by the Portfolio is discussed in Note 1B of the Portfolio's Notes to Financial Statements.
C. Investment Income
The Fund earns income, net of expenses, daily on its investment in the Portfolio. All of the net investment income
and realized and unrealized gains and losses from the security transactions of the Portfolio are allocated pro rata
among the investors in the Portfolio at the time of such determination.
It is the Fund's policy to declare and distribute dividends quarterly to shareholders from net investment income.
Dividends and distributions payable to shareholders are recorded by the Fund on the ex-dividend date.
Distributions of net realized short-term and long-term capital gains, if any, earned by the Fu