Semiannual Report to Shareholders Deutsche European Equity Fund

Transcription

1 February 28, 2018 Semiannual Report to Shareholders Deutsche European Equity Fund

2 Contents 3 Letter to Shareholders 4 Performance Summary 7 Portfolio Management Team 7 Portfolio Summary 10 Investment Portfolio 15 Statement of Assets and Liabilities 17 Statement of Operations 18 Statements of Changes in Net Assets 19 Financial Highlights 23 Notes to Financial Statements 35 Information About Your Fund s Expenses 37 Advisory Agreement Board Considerations and Fee Evaluation 42 Account Management Resources 44 Privacy Statement This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or 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 summary prospectus and prospectus contain this and other important information about the Fund. Please read the prospectus carefully before you invest. Stocks may decline in value. Any fund that focuses in a particular segment of the market or region of the world will generally be more volatile than a fund that invests more broadly. Investing in foreign securities presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Emerging markets tend to be more volatile and less liquid than the markets of more mature economies, and generally have less diverse and less mature economic structures and less stable political systems than those of developed countries. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. The Fund s use of forward currency contracts may not be successful in hedging currency exchange rates changes and could eliminate some or all of the benefit of an increase in the value of a foreign currency versus the US dollar. The Fund may lend securities to approved institutions. Please read the prospectus for more details. The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or Deutsche Investment Management Americas Inc. and RREEF America L.L.C. which offer advisory services. NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY 2 Deutsche European Equity Fund

3 Letter to Shareholders Dear Shareholder: You may have noticed a new logo appearing on the cover of this report. As of March 23, 2018, Deutsche Asset Management has adopted its existing European brand, DWS, globally. As we have consolidated several businesses over the last several years, each of which has grown up relatively independently, the time has now come to be united under a single brand that reflects our global identity and the full breadth of capabilities we offer to our clients. The DWS brand Deutsche Gesellschaft für Wertpapiersparen draws on our roots in the German market, going back over 60 years. It was established in Hamburg in 1956 with a singular objective: to assist private investors in building wealth and managing risk. We have been fulfilling that promise for generations. Today, the DWS name is synonymous with the values that we have continuously lived up to, and those that will remain central to our future success: Excellence, Entrepreneurship, Sustainability and Integrity. It is therefore a name that we are proud to adopt and build upon as our brand here in the Americas. In connection with this change, our web site has recently been redesigned with a new address: dws.com. However, for your convenience, the deutschefunds.com address will remain live and automatically redirect you to our new site. Please visit us online to find the most current insights from our CIO, economists and investment specialists. As always, thank you for your ongoing trust in us. We look forward to bringing you the very best in investment insight, strategies and solutions as we march forward gathering our unique qualities and capabilities under one roof, DWS. Best regards, Hepsen Uzcan President, Deutsche Funds Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results. Deutsche European Equity Fund 3

4 Performance Summary February 28, 2018 (Unaudited) Class A 6-Month 1-Year Life of Fund* Average Annual Total Returns as of 2/28/18 Unadjusted for Sales Charge 3.92% 19.84% 6.43% Adjusted for the Maximum Sales Charge (max 5.75% load) 2.06% 12.95% 4.53% MSCI Europe Index 4.75% 20.54% 5.36% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) Unadjusted for Sales Charge 25.40% 7.31% Adjusted for the Maximum Sales Charge (max 5.75% load) 18.19% 5.30% MSCI Europe Index 25.51% 5.91% Class C 6-Month 1-Year Life of Fund* Average Annual Total Returns as of 2/28/18 Unadjusted for Sales Charge 3.54% 18.97% 5.63% Adjusted for the Maximum Sales Charge (max 1.00% CDSC) 2.54% 18.97% 5.63% MSCI Europe Index 4.75% 20.54% 5.36% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) Unadjusted for Sales Charge 24.41% 6.50% Adjusted for the Maximum Sales Charge (max 1.00% CDSC) 24.41% 6.50% MSCI Europe Index 25.51% 5.91% Class S 6-Month 1-Year Life of Fund* Average Annual Total Returns as of 2/28/18 No Sales Charges 4.00% 20.02% 6.56% MSCI Europe Index 4.75% 20.54% 5.36% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) No Sales Charges 25.58% 7.45% MSCI Europe Index 25.51% 5.91% 4 Deutsche European Equity Fund

5 Institutional Class 6-Month 1-Year Life of Fund* Average Annual Total Returns as of 2/28/18 No Sales Charges 4.07% 20.18% 6.69% MSCI Europe Index 4.75% 20.54% 5.36% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) No Sales Charges 25.73% 7.58% MSCI Europe Index 25.51% 5.91% Performance in the Average Annual Total Returns table(s) above and the Growth of an Assumed $10,000 Investment line graph that follows is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit dws.com for the Fund s most recent month-end performance. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had. The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated December 1, 2017 are 1.79%, 2.59%, 1.55% and 1.49% for Class A, Class C, Class S and Institutional Class shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index. Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Deutsche European Equity Fund 5

6 Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge) Deutsche European Equity Fund Class A MSCI Europe Index $15,000 $10,000 $11,881 $11,575 $5,000 $0 11/14* 2/15 8/15 2/16 8/16 2/17 8/17 2/18 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. The growth of $10,000 is cumulative. Performance of other share classes will vary based on the sales charges and the fee structure of those classes. * The Fund commenced operations on November 11, The MSCI Europe Index tracks the performance of 15 developed markets in Europe. Index returns do not reflect any fees or expenses and it is not possible to invest directly in the MSCI Europe Index. Total returns shown for periods less than one year are not annualized. Class A Class C Class S Institutional Class Net Asset Value 2/28/18 $12.20 $11.98 $12.23 $ /31/17 $11.74 $11.57 $11.76 $ Deutsche European Equity Fund

7 Portfolio Management Team Britta Weidenbach, CFA, Managing Director. Lead Portfolio Manager of the Fund. Began managing the Fund in Head of European Equities: Frankfurt. Joined DWS in Master s Degree in Economics (Diplom-Volkswirtin), University of Konstanz. Mark Schumann, CFA, Director. Portfolio Manager of the Fund. Began managing the Fund in Joined DWS in Portfolio Manager European Equities: New York. Master s Degree in Finance, University of St. Gallen (HSG), Switzerland. Gerd Kirsten, CFA, Managing Director. Portfolio Manager of the Fund. Began managing the Fund in Senior Portfolio Manager European Equities: Frankfurt. Joined DWS in Diplom-Kaufmann in Banking, Technical University of Berlin; MBA, Columbia University. Christian Reuter, CEFA, Vice President. Portfolio Manager of the Fund. Began managing the Fund in Portfolio Manager European Equities: Frankfurt. Joined DWS in Master s Degree in Economics and Business Administration, University of Augsburg; Certified European Financial Analyst (CEFA). Portfolio Summary (Unaudited) Asset Allocation (As a % of Investment Portfolio) 2/28/18 8/31/17 Common Stocks 99% 98% Cash Equivalents 1% 2% 100% 100% Deutsche European Equity Fund 7

8 Geographical Diversification (As a % of Investment Portfolio excluding Cash Equivalents) 2/28/18 8/31/17 Germany 19% 17% France 18% 22% Netherlands 12% 13% United Kingdom 12% 15% Italy 9% 6% Spain 8% 6% Switzerland 7% 9% Sweden 5% 2% Denmark 3% 5% Ireland 3% Norway 3% 4% Portugal 1% 1% 100% 100% Sector Diversification (As a % of Investment Portfolio excluding Cash Equivalents) 2/28/18 8/31/17 Financials 28% 24% Industrials 15% 18% Materials 13% 9% Consumer Discretionary 11% 9% Health Care 9% 13% Energy 8% 8% Information Technology 7% 6% Consumer Staples 5% 8% Telecommunication Services 2% 2% Utilities 2% 3% 100% 100% Currency Exposure* (As a % of Investment Portfolio) 2/28/18 8/31/17 Euro 55% 51% British Pound 26% 27% Swiss Franc 7% 9% Swedish Krona 5% 2% Danish Krone 3% 5% Norwegian Krone 3% 4% United States Dollar 1% 2% 100% 100% * Currency exposure after taking into account the effects of forward currency contracts and foreign currency balances. 8 Deutsche European Equity Fund

9 Ten Largest Equity Holdings at February 28, 2018 (27% of Net Assets) Country Percent 1 Royal Dutch Shell PLC Netherlands 5.1% Explores, produces and refines petroleum 2 ING Groep NV Netherlands 2.9% Offers financial services to individuals, corporations and other institutions 3 Capgemini SE France 2.7% Provides IT consulting and Services 4 BHP Billiton PLC United Kingdom 2.5% Operates an international resources company 5 Smurfit Kappa Group PLC Ireland 2.5% Manufactures, paper packaging products. 6 Allianz SE Germany 2.4% Provider of multi-line insurance services 7 Prudential PLC United Kingdom 2.4% Provider of broad range of financial services 8 Banco Santander SA Spain 2.2% Provider of commercial banking services 9 Air Liquide SA France 2.2% Produces, markets and sells industrial and healthcare gases worldwide. 10 Ashtead Group PLC United Kingdom 2.1% Equipment rental company Portfolio holdings and characteristics are subject to change. For more complete details about the Fund s investment portfolio, see page 10. A quarterly Fact Sheet is available on dws.com or upon request. Please see the Account Management Resources section on page 42 for contact information. Deutsche European Equity Fund 9

10 Investment Portfolio as of February 28, 2018 (Unaudited) Shares Value ($) Common Stocks 98.5% Denmark 3.1% Chr Hansen Holding AS 6, ,965 Danske Bank AS 15, ,178 Novo Nordisk AS B 16, ,927 (Cost $1,771,140) 2,035,070 France 17.8% Air Liquide SA 11,516 1,444,075 AXA SA 16, ,382 BNP Paribas SA 13,573 1,078,437 Capgemini SE 14,447 1,812,324 LVMH Moet Hennessy Louis Vuitton SE 3, ,545 Pernod Ricard SA 3, ,924 SEB SA 5,650 1,155,057 Teleperformance 3, ,255 TOTAL SA 13, ,627 Valeo SA 18,700 1,212,505 Veolia Environnement SA 45,200 1,101,187 VINCI SA 6, ,178 (Cost $10,299,545) 11,772,496 Germany 18.4% Allianz SE (Registered) 6,890 1,607,175 BASF SE 5, ,794 Beiersdorf AG 8, ,947 Deutsche Boerse AG 8,790 1,171,058 Deutsche Post AG (Registered) 22,633 1,037,810 Deutsche Telekom AG (Registered) 80,694 1,304,304 Evonik Industries AG 25, ,116 Fraport AG 6, ,250 Fresenius SE & Co. KGaA 10, ,088 HeidelbergCement AG 5, ,855 OSRAM Licht AG 8, ,691 Siltronic AG* 4, ,660 Symrise AG 14,705 1,198,392 (Cost $11,292,333) 12,200,140 Ireland 2.5% Smurfit Kappa Group PLC (Cost $1,553,669) 46,880 1,634,902 The accompanying notes are an integral part of the financial statements. 10 Deutsche European Equity Fund

11 Shares Value ($) Italy 9.2% Cerved Information Solutions SpA 95,220 1,229,238 FinecoBank Banca Fineco SpA 76, ,859 Intesa Sanpaolo SpA 333,080 1,254,379 Moncler SpA 30,454 1,065,364 Pirelli & C SpA 144A* 114,940 1,020,488 Prysmian SpA 18, ,929 (Cost $5,106,805) 6,097,257 Netherlands 11.8% ASML Holding NV 4, ,952 Heineken NV 10,258 1,066,710 ING Groep NV 107,052 1,883,652 QIAGEN NV* 16, ,200 Royal Dutch Shell PLC A 45,177 1,424,185 Royal Dutch Shell PLC B 60,800 1,932,003 (Cost $6,435,305) 7,815,702 Norway 2.4% DNB ASA 54,977 1,086,172 Sbanken ASA 144A 50, ,492 (Cost $1,247,453) 1,597,664 Portugal 1.4% Galp Energia, SGPS, SA (Cost $833,430) 49, ,745 Spain 8.1% Applus Services SA 48, ,882 Banco Santander SA 216,427 1,484,324 CaixaBank SA 218,660 1,067,284 Grifols SA 41,910 1,149,991 NH Hotel Group SA 130, ,133 (Cost $4,974,378) 5,369,614 Sweden 5.0% Alfa Laval AB 53,180 1,278,868 Atlas Copco AB A 19, ,167 Swedbank AB A 48,270 1,212,076 (Cost $3,359,012) 3,317,111 Switzerland 7.2% Julius Baer Group Ltd.* 19,600 1,272,385 Logitech International SA (Registered) 32,852 1,296,087 Lonza Group AG (Registered)* 4,580 1,161,742 Straumann Holding AG (Registered) 1,566 1,053,752 (Cost $4,081,304) 4,783,966 The accompanying notes are an integral part of the financial statements. Deutsche European Equity Fund 11

12 Shares Value ($) United Kingdom 11.6% Ashtead Group PLC 48,430 1,400,538 BHP Billiton PLC 80,880 1,646,874 British American Tobacco PLC 11, ,331 Compass Group PLC 45, ,383 IMI PLC 51, ,696 Prudential PLC 63,434 1,586,383 Rentokil Initial PLC 139, ,955 (Cost $6,953,621) 7,717,160 Total Common Stocks (Cost $57,907,995) 65,236,827 Cash Equivalents 1.1% Deutsche Central Cash Management Government Fund, 1.41% (a) (Cost $763,956) 763, ,956 % of Net Assets Value ($) Total Investment Portfolio (Cost $58,671,951) ,000,783 Other Assets and Liabilities, Net ,532 Net Assets ,233,315 A summary of the Fund s transactions with affiliated Underlying Deutsche Funds during the period ended February 28, 2018 are as follows: Value ($) at 8/31/2017 Purchases Cost ($) Sales Proceeds ($) Net Realized Gain/ (Loss) ($) Net Change in Unrealized Appreciation (Depreciation) Income ($) ($) Capital Gain Distributions ($) Number of Shares at 2/28/2018 Value ($) at 2/28/2018 Securities Lending Collateral Deutsche Government & Agency Securities Portfolio "Deutsche Government Cash Institutional Shares", 1.32% (a) (b) 4,673 Cash Equivalents 1.1% Deutsche Central Cash Management Government Fund, 1.41% (a) 755,367 26,350,347 26,341,758 7, , , ,367 26,350,347 26,341,758 12, , ,956 * Non-income producing security. (a) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end. (b) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested for the period ended February 28, A: Security exempt from registration under Rule 144A of the Securities Act of These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The accompanying notes are an integral part of the financial statements. 12 Deutsche European Equity Fund

13 At February 28, 2018, open futures contracts purchased were as follows: Futures Currency Expiration Date Contracts Notional Amount ($) Notional Value ($) Unrealized (Depreciation) ($) Euro Stoxx 50 Index EUR 3/16/ , ,182 (37,149) As of February 28, 2018, the Fund had the following open forward foreign currency contracts: Contracts to Settlement Unrealized Deliver In Exchange For Date Depreciation ($) Counterparty EUR 3,823,146 GBP 3,367,412 3/29/2018 (32,151) Citigroup, Inc. Currency Abbreviations EUR Euro GBP British Pound For information on the Fund s policy and additional disclosures regarding futures contracts and forward foreign currency contracts, please refer to the Derivatives section of Note A in the accompanying Notes to Financial Statements. The accompanying notes are an integral part of the financial statements. Deutsche European Equity Fund 13

14 Fair Value Measurements Various inputs are used in determining the value of the Fund s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. The following is a summary of the inputs used as of February 28, 2018 in valuing the Fund s investments. For information on the Fund s policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements. Assets Level 1 Level 2 Level 3 Total Common Stocks Denmark $ $ 2,035,070 $ $ 2,035,070 France 11,772,496 11,772,496 Germany 12,200,140 12,200,140 Ireland 1,634,902 1,634,902 Italy 6,097,257 6,097,257 Netherlands 7,815,702 7,815,702 Norway 1,597,664 1,597,664 Portugal 895, ,745 Spain 5,369,614 5,369,614 Sweden 3,317,111 3,317,111 Switzerland 4,783,966 4,783,966 United Kingdom 7,717,160 7,717,160 Short-Term Investments 763, ,956 Total $763,956 $65,236,827 $ $66,000,783 Liabilities Level 1 Level 2 Level 3 Total Derivatives (c) Futures Contracts $ (37,149) $ $ $ (37,149) Forward Foreign Currency Exchange Contracts (32,151) (32,151) Total $ (37,149) $ (32,151) $ $ (69,300) As a result of the fair valuation model utilized by the Fund, certain international securities transferred from Level 1 to Level 2. During the period ended February 28, 2018, the amount of the transfers between Level 1 and Level 2 was $3,009,701. Transfers between price levels are recognized at the beginning of the reporting period. (c) Derivatives include unrealized appreciation (depreciation) on open futures contracts and forward foreign currency contracts. The accompanying notes are an integral part of the financial statements. 14 Deutsche European Equity Fund

15 Statement of Assets and Liabilities As of February 28, 2018 (Unaudited) Assets Investments in non-affiliated securities, at value (cost $57,907,995) $ 65,236,827 Investment in Deutsche Central Cash Management Government Fund (cost $763,956) 763,956 Foreign currency, at value (cost $487,245) 483,657 Deposit with broker for futures contracts 44,356 Receivable for investments sold 608,380 Receivable for Fund shares sold 298,069 Dividends receivable 46,624 Interest receivable 3,021 Foreign taxes recoverable 136,471 Other assets 26,043 Total assets 67,647,404 Liabilities Payable for investments purchased 1,181,553 Payable for Fund shares redeemed 58,290 Payable for variation margin on futures contracts 4,764 Unrealized depreciation on forward foreign currency contracts 32,151 Accrued management fee 13,378 Accrued Directors fees 2,171 Other accrued expenses and payables 121,782 Total liabilities 1,414,089 Net assets, at value $ 66,233,315 Net Assets Consist of Net investment loss (134,392) Net unrealized appreciation (depreciation) on: Investments 7,328,832 Futures (37,149) Foreign currency 3,762 Forward foreign currency contracts (32,151) Accumulated net realized gain (loss) (12,000,463) Paid-in capital 71,104,876 Net assets, at value $ 66,233,315 The accompanying notes are an integral part of the financial statements. Deutsche European Equity Fund 15

16 Statement of Assets and Liabilities as of February 28, 2018 (Unaudited) (continued) Net Asset Value Class A Net Asset Value and redemption price per share ($10,201, ,338 shares of capital stock outstanding, $.01 par value, 50,000,000 shares authorized) $ Maximum offering price per share ( of $12.20) $ Class C Net Asset Value offering and redemption price (subject to contingent deferred sales charge) per share ($4,515, ,873 shares of capital stock outstanding, $.01 par value, 50,000,000 shares authorized) $ Class S Net Asset Value offering and redemption price per share ($41,221,683 3,369,981 shares of capital stock outstanding, $.01 par value, 50,000,000 shares authorized) $ Institutional Class Net Asset Value offering and redemption price per share ($10,294, ,005 shares of capital stock outstanding, $.01 par value, 50,000,000 shares authorized) $ The accompanying notes are an integral part of the financial statements. 16 Deutsche European Equity Fund

17 Statement of Operations For the six months ended February 28, 2018 (Unaudited) Investment Income Income: Dividends (net of foreign taxes withheld of $22,013) $ 233,469 Income distributions Deutsche Central Cash Management Government Fund 7,839 Securities lending income, net of borrower rebates 4,673 Total income 245,981 Expenses: Management fee 166,805 Administration fee 25,662 Services to shareholders 24,694 Distribution and service fees 31,741 Custodian fee 34,964 Professional fees 47,240 Reports to shareholders 17,486 Registration fees 31,236 Directors fees and expenses 2,245 Other 17,240 Total expenses before expense reductions 399,313 Expense reductions (135,906) Total expenses after expense reductions 263,407 Net investment income (loss) (17,426) Realized and Unrealized Gain (Loss) Net realized gain (loss) from: Investments 1,387,422 Futures (9,916) Forward foreign currency contracts 196,791 Foreign currency (41,700) 1,532,597 Change in net unrealized appreciation (depreciation) on: Investments (915,118) Futures (14,114) Forward foreign currency contracts (48,412) Foreign currency (3,864) (981,508) Net gain (loss) 551,089 Net increase (decrease) in net assets resulting from operations $ 533,663 The accompanying notes are an integral part of the financial statements. Deutsche European Equity Fund 17

18 Statements of Changes in Net Assets Six Months Ended Increase (Decrease) in Net Assets February 28, 2018 (Unaudited) Year Ended August 31, 2017 Operations: Net investment income (loss) $ (17,426) $ 521,107 Net realized gain (loss) 1,532,597 5,064,110 Change in net unrealized appreciation (depreciation) (981,508) 3,511,611 Net increase (decrease) in net assets resulting from operations 533,663 9,096,828 Fund share transactions: Proceeds from shares sold 28,381,646 11,644,761 Payments for shares redeemed (6,274,655) (56,194,470) Redemption fees 235 Net increase (decrease) in net assets from Fund share transactions 22,106,991 (44,549,474) Increase (decrease) in net assets 22,640,654 (35,452,646) Net assets at beginning of period 43,592,661 79,045,307 Net assets at end of period (including net investment loss of $134,392 and $116,966, respectively) $ 66,233,315 $ 43,592,661 The accompanying notes are an integral part of the financial statements. 18 Deutsche European Equity Fund

19 Financial Highlights Six Months Ended 2/28/18 Years Ended August 31, Period Ended Class A (Unaudited) /31/15 a Selected Per Share Data Net asset value, beginning of period $11.74 $9.53 $10.18 $10.00 Income (loss) from investment operations: Net investment income (loss) b (.01) Net realized and unrealized gain (loss) (.74) (.01) Total from investment operations (.58).17 Less distributions from: Net investment income (.07) Redemption fees.00 ***.00 ***.01 Net asset value, end of period $12.20 $11.74 $9.53 $10.18 Total Return (%) c 3.92 d,** d (5.76) 1.80 d,** Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses before expense reductions (%) 1.64 * * Ratio of expenses after expense reductions (%) 1.12 * * Ratio of net investment income (loss) (%) (.16) * * Portfolio turnover rate (%) 32 ** ** a For the period from November 11, 2014 (commencement of operations) to August 31, b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $.005. Deutsche European Equity Fund 19

20 Six Months Ended 2/28/18 Years Ended August 31, Period Ended Class C (Unaudited) /31/15 a Selected Per Share Data Net asset value, beginning of period $11.57 $9.47 $10.12 $10.00 Income (loss) from investment operations: Net investment income (loss) b (.06) Net realized and unrealized gain (loss) (.74).06 Total from investment operations (.65).11 Redemption fees.00 ***.00 ***.01 Net asset value, end of period $11.98 $11.57 $9.47 $10.12 Total Return (%) c 3.54 d,** d (6.42) 1.20 d,** Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses before expense reductions (%) 2.44 * * Ratio of expenses after expense reductions (%) 1.87 * * Ratio of net investment income (loss) (%) (.92) * * Portfolio turnover rate (%) 32 ** ** a For the period from November 11, 2014 (commencement of operations) to August 31, b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $ Deutsche European Equity Fund

21 Six Months Ended 2/28/18 Years Ended August 31, Period Ended Class S (Unaudited) /31/15 a Selected Per Share Data Net asset value, beginning of period $11.76 $9.53 $10.19 $10.00 Income (loss) from investment operations: Net investment income (loss) b.00 *** Net realized and unrealized gain (loss) (.72).06 Total from investment operations (.57).18 Less distributions from: Net investment income (.09) Redemption fees.00 ***.00 ***.01 Net asset value, end of period $12.23 $11.76 $9.53 $10.19 Total Return (%) 4.00 c,** c (5.70) 1.90 c,** Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses before expense reductions (%) 1.46 * * Ratio of expenses after expense reductions (%).92 * * Ratio of net investment income (loss) (%).04 * * Portfolio turnover rate (%) 32 ** ** a For the period from November 11, 2014 (commencement of operations) to August 31, b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $.005. Deutsche European Equity Fund 21

22 Six Months Ended 2/28/18 Years Ended August 31, Period Ended Institutional Class (Unaudited) /31/15 a Selected Per Share Data Net asset value, beginning of period $11.79 $9.55 $10.20 $10.00 Income (loss) from investment operations: Net investment income (loss) b.00 *** Net realized and unrealized gain (loss) (.76).02 Total from investment operations (.56).19 Less distributions from: Net investment income (.09) (.00) *** Redemption fees.00 ***.00 ***.01 Net asset value, end of period $12.27 $11.79 $9.55 $10.20 Total Return (%) 4.07 c,** c (5.53) 2.01 c,** Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses before expense reductions (%) 1.37 * * Ratio of expenses after expense reductions (%).87 * * Ratio of net investment income (loss) (%).08 * * Portfolio turnover rate (%) 32 ** ** a For the period from November 11, 2014 (commencement of operations) to August 31, b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized *** Amount is less than $ Deutsche European Equity Fund

23 Notes to Financial Statements (Unaudited) A. Organization and Significant Accounting Policies Deutsche European Equity Fund (the Fund ) is a diversified series of Deutsche Global/International Fund, Inc. (the Corporation ), which is registered under the Investment Company Act of 1940, as amended (the 1940 Act ), as an open-end 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 subject to an initial sales charge. Class C shares are not subject to 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 within one year of purchase. Class S shares are not subject to initial or contingent deferred sales charges and are only available to a limited group of investors. Institutional Class shares are not subject to initial or contingent deferred sales charges and are generally available only to qualified institutions. 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 distribution and service fees, services to shareholders 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 ( U.S. GAAP ) which require the use of management estimates. Actual results could differ from those estimates. The Fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of U.S. GAAP. The policies described below are followed consistently by the Fund in the preparation of their 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. Various inputs are used in determining the value of the Fund s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Deutsche European Equity Fund 23

24 Level 3 includes significant unobservable inputs (including the Fund s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Equity securities are valued at the most recent sale price or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. 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. Equity securities are generally categorized as Level 1. For certain international equity securities, in order to adjust for events which may occur between the close of the foreign exchanges and the close of the New York Stock Exchange, a fair valuation model may be used. This fair valuation model takes into account comparisons to the valuation of American Depository Receipts (ADRs), exchange-traded funds, futures contracts and certain indices and these securities are categorized as Level 2. Investments in open-end investment companies are valued at their net asset value each business day and are categorized as Level 1. Futures contracts are generally valued at the settlement prices established each day on the exchange on which they are traded and are categorized as Level 1. Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and are categorized as Level 2. 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 Board and are generally categorized as Level 3. In accordance with the Fund s valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company s or issuer s financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities. 24 Deutsche European Equity Fund

25 Disclosure about the classification of fair value measurements is included in a table following the Fund s Investment Portfolio. Securities Lending. Brown Brothers Harriman & Co., as lending agent, lends securities of the Fund to certain financial institutions under the terms of its securities lending agreement. During the term of the loans, the Fund continues to receive interest and dividends generated by the securities and to participate in any changes in their market value. The Fund requires the borrowers of the securities to maintain collateral with the Fund consisting of either cash or liquid, unencumbered assets having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the securities lending agreement. During the six months ended February 28, 2018, the Fund invested the cash collateral into a joint trading account in affiliated money market funds, including Deutsche Government & Agency Securities Portfolio, managed by Deutsche Investment Management Americas Inc. Deutsche Investment Management Americas Inc. receives a management/administration fee (0.14% annualized effective rate as of February 28, 2018) on the cash collateral invested in Deutsche Government & Agency Securities Portfolio. The Fund receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan at any time, and the borrower, after notice, is required to return borrowed securities within a standard time period. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. If the Fund is not able to recover securities lent, the Fund may sell the collateral and purchase a replacement investment in the market, incurring the risk that the value of the replacement security is greater than the value of the collateral. The Fund is also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments. As of February 28, 2018, the Fund had no securities on loan. Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions. Deutsche European Equity Fund 25

26 Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/ depreciation on investments. 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. At August 31, 2017, the Fund had a net tax basis capital loss carryforward of approximately $13,329,000 of post-enactment short-term losses, which may be applied against realized net taxable capital gains indefinitely. In addition, from November 1, 2016 through August 31, 2017, the Fund elects to defer qualified late year losses of approximately $101,000 of net ordinary losses and treat them as arising in the fiscal year ending August 31, Additionally, the Fund may be subject to taxes imposed by the governments of countries in which it invests and are generally based on income and/or capital gains earned or repatriated. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized gain/loss on investments. Tax liabilities realized as a result of security sales are reflected as a component of net realized gain/loss on investments. At August 31, 2017, the aggregate cost of investments for federal income tax purposes was $35,526,265. The net unrealized appreciation for all investments based on tax cost was $8,023,551. This consisted of aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost of $8,526,088 and aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value of $502,537. The Fund has reviewed the tax positions for the open tax years as of August 31, 2017, and has determined that no provision for income tax and/ or uncertain tax provisions is required in the Fund s financial statements. Distribution of Income and Gains. Distributions from net investment income of the Fund, if any, are declared and distributed to shareholders annually. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not 26 Deutsche European Equity Fund

27 distributed and, therefore, will be distributed to shareholders at least annually. The Fund may also make additional distributions for tax purposes if necessary. The timing and characterization of certain income and capital gain 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 investments in foreign denominated securities, futures contracts, certain securities sold at a loss and recognition of certain foreign currency gains (losses) as ordinary income (loss). As a result, net investment income (loss) 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. The tax character of current year distributions will be determined at the end of the current fiscal year. Redemption. Prior to February 1, 2017, the Fund imposed a redemption fee of 2% of the total redemption amount on Fund share redeemed or exchanged within 15 days of buying them, either by purchase or exchange (subject to certain exceptions). This fee was assessed and retained by the Fund for the benefit of the remaining shareholders. The redemption fee was accounted for as an addition to paid-in-capital. Expenses. Expenses of the Corporation arising in connection with a specific Fund are allocated to that Fund. Other Corporation expenses which cannot be directly attributed to a Fund are apportioned among the Funds in the Corporation based upon the relative net assets or other appropriate measures. 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 a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the Fund is informed of such dividends. Realized gains and losses from investment transactions are recorded on Deutsche European Equity Fund 27

28 an identified cost basis. Proceeds from litigation payments, if any, are included in net realized gain (loss) from investments. B. Derivative Instruments Futures Contracts. A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). For the six months ended February 28, 2018, the Fund used futures contracts as a 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. Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary cash or securities ( initial margin ) in an amount equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ( variation margin ) are made or received by the Fund dependent upon the daily fluctuations in the value and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. Gains or losses are realized when the contract expires or is closed. Since all futures contracts are exchange traded, counterparty risk is minimized as the exchange s clearinghouse acts as the counterparty, and guarantees the futures against default. Certain risks may arise upon entering into futures contracts, including the risk that an illiquid market will limit the Fund s ability to close out a futures contract prior to the settlement date and the risk that the futures contract is not well correlated with the security, index or currency in which it relates. Risk of loss may exceed amounts disclosed in the Statement of Assets and Liabilities. A summary of the open futures contracts as of February 28, 2018 is included in a table following the Fund s Investment Portfolio. For the six months ended February 28, 2018, the investment in futures contracts purchased had a total notional value generally indicative of a range from approximately $611,000 to $1,063,000. Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange contract ( forward currency contract ) is a commitment to purchase or sell a foreign currency at the settlement date at a negotiated rate. During the six months ended February 28, 2018, the Fund entered into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign currency denominated portfolio holdings. Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and unrealized gain (loss) is recorded daily. On the settlement date of the forward currency contract, the Fund 28 Deutsche European Equity Fund

29 records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was closed. Certain risks may arise upon entering into forward currency contracts from the potential inability of counterparties to meet the terms of their contracts. The maximum counterparty credit risk to the Fund is measured by the unrealized gain on appreciated contracts. Additionally, when utilizing forward currency contracts to hedge, the Fund gives up the opportunity to profit from favorable exchange rate movements during the term of the contract. A summary of the open forward currency contracts as of February 28, 2018 is included in a table following the Fund s Investment Portfolio. For the six months ended February 28, 2018, the investment in forward currency contracts long vs. other foreign currencies sold had a total contract value generally indicative of a range from approximately $3,852,000 to $4,698,000. The following tables summarize the value of the Fund s derivative instruments held as of February 28, 2018 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure: Liability Derivative Futures Contracts Forward Contracts Total Equity Contracts (a) $ (37,149) $ $ (37,149) Foreign Currency Contracts (b) (32,151) (32,151) $ (37,149) $ (32,151) $ (69,300) Each of the above derivatives is located in the following Statement of Assets and Liabilities account: (a) Includes cumulative depreciation of futures contracts disclosed in the Investment Portfolio. Unsettled variation margin is disclosed separately within the Statement of Assets and Liabilities. (b) Unrealized depreciation on forward foreign currency contracts Additionally, the amount of unrealized and realized gains and losses on derivative instruments recognized in Fund earnings during the six months ended February 28, 2018 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk exposure: Realized Gain (Loss) Futures Contracts Forward Contracts Total Equity Contracts (c) $ (9,916) $ $ (9,916) Foreign Currency Contracts (d) 196, ,791 $ (9,916) $ 196,791 $ 186,875 Each of the above derivatives is located in the following Statement of Operations accounts: (c) Net realized gain (loss) from futures (d) Net realized gain (loss) from forward foreign currency contracts Deutsche European Equity Fund 29

30 Change in Net Unrealized Appreciation (Depreciation) Futures Contracts Forward Contracts Total Equity Contracts (e) $ (14,114) $ $ (14,114) Foreign Currency Contracts (f) (48,412) (48,412) $ (14,114) $ (48,412) $ (62,526) Each of the above derivatives is located in the following Statement of Operations accounts: (e) Change in net unrealized appreciation (depreciation) on futures (f) Change in net unrealized appreciation (depreciation) on forward foreign currency contracts As of February 28, 2018, the Fund has transactions subject to enforceable master netting agreements which govern the terms of certain transactions, and reduce the counterparty risk associated with such transactions. Master netting agreements allow a Fund to close out and net total exposure to a counterparty in the event of a deterioration in the credit quality or contractual default with respect to all of the transactions with a counterparty. As defined by the master netting agreement, the Fund may have collateral agreements with certain counterparties to mitigate risk. For financial reporting purposes the Statement of Assets and Liabilities generally shows derivatives assets and liabilities on a gross basis, which reflects the full risks and exposures prior to netting. A reconciliation of the gross amounts on the Statement of Assets and Liabilities to the net amounts by a counterparty, including any collateral exposure, is included in the following tables: Gross Amounts Counterparties of Liabilities Presented in the Statement of Assets and Liabilities Financial Instruments and Derivatives Available for Offset Collateral Pledged Net Amount of Derivative Liabilities Citigroup, Inc. $ 32,151 $ $ $ 32,151 C. Purchases and Sales of Securities During the six months ended February 28, 2018, purchases and sales of investment securities (excluding short-term investments) aggregated $38,474,534 and $16,504,547, respectively. D. 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 DWS Group Gmbh & Co. KGaA ( DWS Group ), 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. 30 Deutsche European Equity Fund