Semiannual Report to Shareholders Deutsche CROCI International Fund

Transcription

1 February 28, 2018 Semiannual Report to Shareholders Deutsche CROCI International Fund

2 Contents 3 Letter to Shareholders 4 Performance Summary 8 Portfolio Management Team 8 Portfolio Summary 11 Investment Portfolio 15 Statement of Assets and Liabilities 17 Statement of Operations 18 Statements of Changes in Net Assets 19 Financial Highlights 25 Notes to Financial Statements 37 Information About Your Fund s Expenses 39 Advisory Agreement Board Considerations and Fee Evaluation 44 Account Management Resources 46 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. The Fund will be managed using the CROCI Investment Process which is based on portfolio management s belief that, over time, stocks which display more favorable financial metrics (for example, the CROCI Economic P/E Ratio) as generated by this process may outperform stocks which display less favorable metrics. This premise may not prove to be correct and prospective investors should evaluate this assumption prior to investing in the Fund. 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. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Investing in foreign securities presents certain risks, such as currency fluctuations, political and economic changes, and market risks. The Fund may lend securities to approved institutions. Stocks may decline in value. Please read the prospectus for 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 CROCI International 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 CROCI International Fund 3

4 Performance Summary February 28, 2018 (Unaudited) Class A 6-Month 1-Year 5-Year 10-Year Average Annual Total Returns as of 2/28/18 Unadjusted for Sales Charge 4.37% 15.02% 6.58% 0.61% Adjusted for the Maximum Sales Charge (max 5.75% load) 1.63% 8.40% 5.32% 0.02% MSCI EAFE Index 7.12% 20.13% 7.06% 2.82% MSCI EAFE US Dollar Hedged Index 5.07% 12.06% 9.71% 4.80% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) Unadjusted for Sales Charge 21.74% 6.91% 0.18% Adjusted for the Maximum Sales Charge (max 5.75% load) 14.74% 5.65% 0.77% MSCI EAFE Index 25.03% 7.90% 1.94% MSCI EAFE US Dollar Hedged Index 16.84% 11.76% 3.69% Class T 6-Month 1-Year 5-Year 10-Year Average Annual Total Returns as of 2/28/18 Unadjusted for Sales Charge 4.38% 14.96% 6.56% 0.65% Adjusted for the Maximum Sales Charge (max 2.50% load) 1.78% 12.09% 6.02% 0.40% MSCI EAFE Index 7.12% 20.13% 7.06% 2.82% MSCI EAFE US Dollar Hedged Index 5.07% 12.06% 9.71% 4.80% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) Unadjusted for Sales Charge 21.62% 6.88% 0.14% Adjusted for the Maximum Sales Charge (max 2.50% load) 18.58% 6.34% 0.39% MSCI EAFE Index 25.03% 7.90% 1.94% MSCI EAFE US Dollar Hedged Index 16.84% 11.76% 3.69% Class C 6-Month 1-Year 5-Year 10-Year Average Annual Total Returns as of 2/28/18 Unadjusted for Sales Charge 3.99% 14.13% 5.77% 0.16% Adjusted for the Maximum Sales Charge (max 1.00% CDSC) 2.99% 14.13% 5.77% 0.16% MSCI EAFE Index 7.12% 20.13% 7.06% 2.82% MSCI EAFE US Dollar Hedged Index 5.07% 12.06% 9.71% 4.80% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) Unadjusted for Sales Charge 20.73% 6.08% 0.95% Adjusted for the Maximum Sales Charge (max 1.00% CDSC) 20.73% 6.08% 0.95% MSCI EAFE Index 25.03% 7.90% 1.94% MSCI EAFE US Dollar Hedged Index 16.84% 11.76% 3.69% 4 Deutsche CROCI International Fund

5 Class R6 6-Month 1-Year Life of Class * Average Annual Total Returns as of 2/28/18 No Sales Charges 4.58% 15.45% 4.36% MSCI EAFE Index 7.12% 20.13% 6.11% MSCI EAFE US Dollar Hedged Index 5.07% 12.06% 4.68% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) No Sales Charges 22.17% 4.94% MSCI EAFE Index 25.03% 6.35% MSCI EAFE US Dollar Hedged Index 16.84% 5.63% Class S 6-Month 1-Year 5-Year 10-Year Average Annual Total Returns as of 2/28/18 No Sales Charges 4.52% 15.31% 6.84% 0.89% MSCI EAFE Index 7.12% 20.13% 7.06% 2.82% MSCI EAFE US Dollar Hedged Index 5.07% 12.06% 9.71% 4.80% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) No Sales Charges 22.00% 7.17% 0.10% MSCI EAFE Index 25.03% 7.90% 1.94% MSCI EAFE US Dollar Hedged Index 16.84% 11.76% 3.69% Institutional Class 6-Month 1-Year 5-Year 10-Year Average Annual Total Returns as of 2/28/18 No Sales Charges 4.56% 15.38% 6.93% 1.00% MSCI EAFE Index 7.12% 20.13% 7.06% 2.82% MSCI EAFE US Dollar Hedged Index 5.07% 12.06% 9.71% 4.80% Average Annual Total Returns as of 12/31/17 (most recent calendar quarter end) No Sales Charges 22.08% 7.25% 0.21% MSCI EAFE Index 25.03% 7.90% 1.94% MSCI EAFE US Dollar Hedged Index 16.84% 11.76% 3.69% Performance in the Average Annual Total Returns table 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. Deutsche CROCI International Fund 5

6 The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated December 1, 2017 are 1.13%, 1.18%, 1.92%, 0.75%, 0.90% and 0.83% for Class A, Class T, Class C, Class R6, 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. Returns shown for Class T shares for the period prior to its inception on June 5, 2017 are derived from the historical performance of Institutional Class shares of Deutsche CROCI International Fund during such periods and have been adjusted to reflect the higher total annual operating expenses. Any difference in expenses will affect performance. 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. Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge) Deutsche CROCI International Fund Class A MSCI EAFE Index MSCI EAFE US Dollar Hedged Index $20,000 $15,000 $10,000 $15,985 $13,201 $10,017 $5,000 $ Yearly periods ended February 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. 6 Deutsche CROCI International Fund

7 * Class R6 shares commenced operations on December 1, The Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Index is an equity index which captures large and mid cap representation across developed markets countries around the world, excluding the US and Canada. With 928 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Returns reflect reinvestment of dividends net of withholding taxes. The index is calculated using closing local market prices and translates into U.S. dollars using the London close foreign exchange rates. MSCI EAFE US Dollar Hedged Index is designed to provide exposure to equity securities in developed international stock markets, while at the same time mitigating exposure to fluctuations between the value of the US dollar and selected non-us currencies. Total returns shown for periods less than one year are not annualized. Institutional Class A Class T Class C Class R6 Class S Class Net Asset Value 2/28/18 $48.08 $48.07 $47.78 $47.94 $48.27 $ /31/17 $47.11 $47.07 $46.61 $47.06 $47.34 $47.13 Distribution Information as of 2/28/18 Income Dividends, Six Months $ 1.09 $ 1.07 $ 0.69 $ 1.28 $ 1.21 $ 1.24 Deutsche CROCI International Fund 7

8 Portfolio Management Team Di Kumble, CFA, Managing Director. Portfolio Manager of the Fund. Began managing the Fund in Joined DWS in 2003 with seven years of industry experience. Prior to joining, she served as a Portfolio Manager at Graham Capital Management. Previously, she worked as a Quantitative Strategist at ITG Inc. and Morgan Stanley. Portfolio Manager: NewYork. BS, Beijing University; PhD in Chemistry, Princeton University. John Moody,Vice President. Portfolio Manager of the Fund. Began managing the Fund in Joined DWS in Prior to his current role, served as a Business Manager for Active Equity. Previously, he was a Portfolio Analyst for EAFE, Global and Technology Funds and an Investment Accountant for International Funds. He began his career as a Client Service Associate for the International Institutional Equity Group. Portfolio Analyst: NewYork. BS in Business Management, Fairfield University. Portfolio Summary (Unaudited) Geographical Diversification (As a % of Investment Portfolio excluding Cash Equivalents and Securities Lending Collateral) 2/28/18 8/31/17 Japan 24% 24% United Kingdom 18% 20% Germany 16% 12% Switzerland 12% 18% France 10% 10% Hong Kong 6% 6% Singapore 4% 6% Netherlands 2% 2% Finland 2% Belgium 2% Australia 2% Spain 2% 2% Total 100% 100% Asset Allocation (As a % of Investment Portfolio excluding Securities Lending Collateral) 2/28/18 8/31/17 Common Stocks 97% 97% Preferred Stock 2% 2% Cash Equivalents 1% 1% Total 100% 100% 8 Deutsche CROCI International Fund

9 Sector Diversification (As a % of Investment Portfolio excluding Cash Equivalents and Securities Lending Collateral) 2/28/18 8/31/17 Consumer Discretionary 30% 20% Industrials 20% 26% Consumer Staples 16% 16% Health Care 14% 16% Utilities 12% 14% Materials 6% 6% Telecommunication Services 2% 2% Total 100% 100% Currency Exposure* (As a % of Investment Portfolio excluding Securities Lending Collateral) 2/28/18 8/31/17 Euro 33% 26% Japanese Yen 24% 0% British Pound 20% 22% Swiss Franc 10% 15% Hong Kong Dollar 6% 6% Singapore Dollar 4% 6% Australian Dollar 2% United States Dollar 1% 25% Total 100% 100% * Currency exposure after taking into account the effects of forward currency contracts and foreign currency balances. Deutsche CROCI International Fund 9

10 Ten Largest Equity Holdings at February 28, 2018 (21.9% of Net Assets) Country Percent 1 Sky PLC United Kingdom 2.6% Provider of broadcast and entertainment services 2 Astellas Pharma, Inc. Japan 2.4% Manufactures & markets a wide variety of pharmaceuticals including prescription drugs 3 Subaru Corp. Japan 2.2% Manufactures cars, buses, motor vehicles parts and industrial machinery 4 Pernod Ricard SA France 2.2% Manufactures wine and spirits 5 HK Electric Investments & HK Electric Investments Ltd. Hong Kong 2.1% Fixed single investment trust focused on the power industry 6 Hong Kong & China Gas Co., Ltd. Hong Kong 2.1% Produces, distributes, and markets gas and gas appliances to residential and industrial customers 7 Koninklijke DSM NV Netherlands 2.1% Develops and produces chemical products 8 CLP Holdings Ltd. Hong Kong 2.1% Generator and supplier of electricity 9 Nissan Motor Co., Ltd. Japan 2.1% Manufacturer of motor vehicles 10 Cie Generale des Etablissements Michelin France 2.0% Manufacturer of tires Portfolio holdings and characteristics are subject to change. For more complete details about the Fund s investment portfolio, see page 11. A quarterly Fact Sheet is available on dws.com or upon request. Please see the Account Management Resources section on page 44 for contact information. 10 Deutsche CROCI International Fund

11 Investment Portfolio as of February 28, 2018 (Unaudited) Shares Value ($) Common Stocks 97.2% Australia 1.9% Wesfarmers Ltd. (Cost $19,669,453) 615,963 19,690,647 Belgium 2.0% Solvay SA (Cost $21,752,678) 147,548 20,315,933 Finland 2.0% Nokian Renkaat Oyj (Cost $22,244,930) 440,978 20,327,279 France 10.0% Cie Generale des Etablissements Michelin 137,677 21,206,846 Danone SA 251,574 20,106,859 L Oreal SA 95,809 20,629,509 Pernod Ricard SA 136,501 22,443,634 Sanofi 243,194 19,230,479 (Cost $94,723,776) 103,617,327 Germany 13.4% BASF SE 182,845 19,215,478 Bayer AG (Registered) 164,348 19,214,619 Beiersdorf AG 183,703 20,173,573 Continental AG 71,671 19,691,937 Daimler AG (Registered) 235,040 20,193,006 Deutsche Post AG (Registered) 447,597 20,524,047 Merck KGaA 195,589 19,551,183 (Cost $132,126,584) 138,563,843 Hong Kong 6.3% CLP Holdings Ltd. 2,153,030 21,701,479 HK Electric Investments & HK Electric Investments Ltd. SS, 144A, (Units) (a) 23,490,500 22,031,168 Hong Kong & China Gas Co., Ltd. 11,030,752 21,786,183 (Cost $58,775,508) 65,518,830 Japan 23.8% Astellas Pharma, Inc. 1,677,400 24,682,711 Bridgestone Corp. 436,540 19,383,987 Central Japan Railway Co. 111,300 20,676,569 ITOCHU Corp. 1,066,900 20,505,762 Japan Tobacco, Inc. 647,600 18,421,500 Nissan Motor Co., Ltd. 2,034,800 21,318,435 Secom Co., Ltd. 273,800 19,624,191 Sekisui House Ltd. 1,103,000 19,255,820 The accompanying notes are an integral part of the financial statements. Deutsche CROCI International Fund 11

12 Shares Value ($) Subaru Corp. 646,200 22,691,641 Sumitomo Electric Industries Ltd. 1,250,300 19,650,895 Toppan Printing Co., Ltd. 2,266,000 19,391,190 Toyota Industries Corp. 329,000 20,639,642 (Cost $241,449,966) 246,242,343 Netherlands 2.1% Koninklijke DSM NV (Cost $13,600,183) 209,566 21,717,356 Singapore 3.9% Singapore Airlines Ltd. 2,481,882 20,700,989 Singapore Telecommunications Ltd. 7,877,400 20,055,578 (Cost $45,537,587) 40,756,567 Spain 1.9% Iberdrola SA (Cost $18,868,987) 2,624,555 19,336,513 Switzerland 11.7% Adecco Group AG (Registered) 262,624 21,163,542 Ferguson PLC 278,503 19,672,543 Nestle SA (Registered) 252,395 20,082,471 Novartis AG (Registered) 235,383 19,667,870 Roche Holding AG (Genusschein) 88,360 20,484,200 Schindler Holding AG 86,724 20,277,859 (Cost $115,990,335) 121,348,485 United Kingdom 18.2% Barratt Developments PLC 2,502,050 18,563,246 Bunzl PLC 769,728 20,644,645 GlaxoSmithKline PLC 1,138,683 20,415,362 ITV PLC 8,997,094 19,859,329 National Grid PLC 1,922,625 19,567,120 Persimmon PLC 585,087 20,951,206 Sky PLC 1,482,823 27,480,583 SSE PLC 1,208,485 20,365,127 Taylor Wimpey PLC 7,779,357 19,948,954 (Cost $197,798,022) 187,795,572 Total Common Stocks (Cost $982,538,009) 1,005,230,695 Preferred Stocks 2.0% Germany Henkel AG & Co. KGaA (Cost $19,714,500) 158,801 21,156,402 The accompanying notes are an integral part of the financial statements. 12 Deutsche CROCI International Fund

13 Securities Lending Collateral 0.9% Shares Value ($) Deutsche Government & Agency Securities Portfolio Deutsche Government Cash Institutional Shares, 1.32% (b) (c) (Cost $9,500,000) 9,500,000 9,500,000 Cash Equivalents 0.6% Deutsche Central Cash Management Government Fund, 1.41% (b) (Cost $5,924,683) 5,924,683 5,924,683 % of Net Assets Value ($) Total Investment Portfolio (Cost $1,017,677,192) ,041,811,780 Other Assets and Liabilities, Net (0.7) (7,287,451) Net Assets ,034,524,329 A summary of the Fund s transactions with affiliated Underlying Deutsche Funds during the year ended February 28, 2018 are as follows: Value ($) 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 0.9% Deutsche Government & Agency Securities Portfolio Deutsche Government Cash Institutional Shares, 1.32% (b) (c) 9,500, ,715 9,500,000 9,500,000 Cash Equivalents 0.6% Deutsche Central Cash Management Government Fund, 1.41% (b) 10,814, ,076, ,965,948 39,638 5,924,683 5,924,683 10,814, ,576, ,965, ,353 15,424,683 15,424,683 (a) All or a portion of these securities were on loan. In addition, Other Assets and Liabilities, Net may include pending sales that are also on loan. The value of securities loaned at February 28, 2018 amounted to $8,909,819, which is 0.9% of net assets. (b) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end. (c) 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. Deutsche CROCI International 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 Australia $ $ 19,690,647 $ $ 19,690,647 Belgium 20,315,933 20,315,933 Finland 20,327,279 20,327,279 France 103,617, ,617,327 Germany 138,563, ,563,843 Hong Kong 65,518,830 65,518,830 Japan 246,242, ,242,343 Netherlands 21,717,356 21,717,356 Singapore 40,756,567 40,756,567 Spain 19,336,513 19,336,513 Switzerland 121,348, ,348,485 United Kingdom 187,795, ,795,572 Preferred Stocks (d) 21,156,402 21,156,402 Short-Term Investments (d) 15,424,683 15,424,683 Total $15,424,683 $1,026,387,097 $ $1,041,811,780 There have been no transfers between fair value measurement levels during the period ended February 28, (d) See Investment Portfolio for additional detailed categorizations. The accompanying notes are an integral part of the financial statements. 14 Deutsche CROCI International Fund

15 Statement of Assets and Liabilities as of February 28, 2018 (Unaudited) Assets Investments in non-affiliated securities, at value (cost $1,002,252,509) including $8,909,819 of securities loaned $ 1,026,387,097 Investment in Deutsche Government & Agency Securities Portfolio (cost $9,500,000)* 9,500,000 Investment in Deutsche Central Cash Management Government Fund (cost $5,924,683) 5,924,683 Cash 230 Foreign currency, at value (cost $204,414) 200,994 Receivable for Fund shares sold 332,785 Dividends receivable 2,302,123 Interest receivable 8,831 Foreign taxes recoverable 2,107,606 Other assets 59,674 Total assets 1,046,824,023 Liabilities Payable upon return of securities loaned 9,500,000 Payable for Fund shares redeemed 1,526,651 Accrued management fee 458,129 Accrued Directors fees 31,960 Other accrued expenses and payables 782,954 Total liabilities 12,299,694 Net assets, at value $ 1,034,524,329 Net Assets Consist of Distributions in excess of net investment income (111,135) Net unrealized appreciation (depreciation) on: Investments 24,134,588 Foreign currency 124,523 Accumulated net realized gain (loss) (729,348,802) Paid-in capital 1,739,725,155 Net assets, at value $ 1,034,524,329 * Represents collateral on securities loaned. The accompanying notes are an integral part of the financial statements. Deutsche CROCI International 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 ($132,180,656 2,748,935 shares of capital stock outstanding, $.01 par value, 100,000,000 shares authorized) $ Maximum offering price per share ( of $48.08) $ Class T Net Asset Value offering and redemption price per share ($10, shares of capital stock outstanding, $.01 par value, 50,000,000 shares authorized) $ Maximum offering price per share ( of $48.07) $ Class C Net Asset Value offering and redemption price per share ($59,217,373 1,239,325 shares of capital stock outstanding, $.01 par value, 20,000,000 shares authorized) $ Class R6 Net Asset Value offering and redemption price per share ($5,287, ,295 shares of capital stock outstanding, $.01 par value, 50,000,000 shares authorized) $ Class S Net Asset Value offering and redemption price per share ($764,183,354 15,832,653 shares of capital stock outstanding, $.01 par value, 200,595,597 shares authorized) $ Institutional Class Net Asset Value offering and redemption price per share ($73,644,898 1,533,130 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 CROCI International Fund

17 Statement of Operations For the six months ended February 28, 2018 (Unaudited) Investment Income Income: Dividends (net of foreign taxes withheld of $356,610) $ 9,088,337 Income distributions Deutsche Central Cash Management Government Fund 39,638 Securities lending income, net of borrower rebates 102,715 Total income 9,230,690 Expenses: Management fee 3,089,120 Administration fee 546,747 Services to shareholders 883,810 Distribution and service fees 481,512 Custodian fee 135,586 Professional fees 66,859 Reports to shareholders 57,359 Registration fees 49,889 Directors fees and expenses 31,979 Other 61,116 Total expenses 5,403,977 Net investment income 3,826,713 Realized and Unrealized Gain (Loss) Net realized gain (loss) from: Investments 45,593,123 Forward foreign currency contracts 8,258,934 Foreign currency 244,765 54,096,822 Change in net unrealized appreciation (depreciation) on: Investments (5,891,006) Forward foreign currency contracts (1,748,656) Foreign currency (3,977) (7,643,639) Net gain (loss) 46,453,183 Net increase (decrease) in net assets resulting from operations $ 50,279,896 The accompanying notes are an integral part of the financial statements. Deutsche CROCI International 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) $ 3,826,713 $ 24,266,480 Net realized gain (loss) 54,096, ,351 Change in net unrealized appreciation (depreciation) (7,643,639) 180,661,802 Net increase (decrease) in net assets resulting from operations 50,279, ,337,633 Distributions to shareholders from: Net investment income: Class A (3,072,495) (8,173,555) Class T (224) Class C (894,789) (2,060,709) Class R6 (85,316) (89,477) Class S (19,878,518) (27,391,383) Institutional Class (2,048,408) (3,671,870) Total distributions (25,979,750) (41,386,994) Fund share transactions: Proceeds from shares sold 60,135, ,848,267 Reinvestment of distributions 24,175,870 37,164,654 Payments for shares redeemed (174,358,706) (784,943,910) Redemption fees 7,856 Net increase (decrease) in net assets from Fund share transactions (90,047,422) (508,923,133) Increase (decrease) in net assets (65,747,276) (344,972,494) Net assets at beginning of period 1,100,271,605 1,445,244,099 Net assets at end of period (including distributions in excess of net investment income and undistributed net investment income of $111,135 and $22,041,902, respectively) $ 1,034,524,329 $ 1,100,271,605 The accompanying notes are an integral part of the financial statements. 18 Deutsche CROCI International Fund

19 Financial Highlights Six Months Ended 2/28/18 Years Ended August 31, Class A (Unaudited) Selected Per Share Data Net asset value, beginning of period $47.11 $40.65 $44.94 $52.11 $45.32 $40.14 Income (loss) from investment operations: Net investment income (loss) a b.91 Net realized and unrealized gain (loss) (3.83) (3.78) Total from investment operations (2.90) (2.30) Less distributions from: Net investment income (1.09) (1.44) (1.39) (4.87) (.87) (1.33) Redemption fees.00 ***.00 ***.00 ***.00 ***.00 *** Net asset value, end of period $48.08 $47.11 $40.65 $44.94 $52.11 $45.32 Total Return (%) c 4.37 ** (6.55) (4.68) Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses (%) 1.16 * Ratio of net investment income (loss) (%).53 * b 2.06 Portfolio turnover rate (%) 28 ** a Based on average shares outstanding during the period. b Net investment income per share and the ratio of net investment income include non-recurring dividend income amounting to $0.45 per share and 0.89% of average daily net assets, for the year ended August 31, c Total return does not reflect the effect of any sales charges. * Annualized ** Not annualized *** Amount is less than $.005. Deutsche CROCI International Fund 19

20 Six Months Ended 2/28/18 Period Ended Class T (Unaudited) 8/31/17 a Selected Per Share Data Net asset value, beginning of period $ $ Income (loss) from investment operations: Net investment income (loss) b Net realized and unrealized gain (loss) 1.94 (.66) Total from investment operations 2.07 (.56) Less distributions from: Net investment income (1.07) Net asset value, end of period $ $ Total Return (%) c 4.38 ** (1.18) ** Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ thousands) Ratio of expenses (%) 1.16 * 1.18 * Ratio of net investment income (loss) (%).52 *.93 * Portfolio turnover rate (%) 28 ** 67 d a For the period from June 5, 2017 (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 Represents the Funds s portfolio turnover rate for the year ended August 31, * Annualized ** Not annualized 20 Deutsche CROCI International Fund

21 Six Months Ended 2/28/18 Years Ended August 31, Class C (Unaudited) Selected Per Share Data Net asset value, beginning of period $46.61 $40.23 $44.47 $51.48 $44.76 $39.65 Income (loss) from investment operations: Net investment income (loss) a (.05) b.54 Net realized and unrealized gain (loss) (3.82) (3.76) Total from investment operations (3.19) (2.61) Less distributions from: Net investment income (.69) (1.11) (1.05) (4.40) (.45) (.97) Redemption fees.00 ***.00 ***.00 ***.00 ***.00 *** Net asset value, end of period $47.78 $46.61 $40.23 $44.47 $51.48 $44.76 Total Return (%) c 3.99 ** (7.26) (5.35) Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses (%) 1.90 * Ratio of net investment income (loss) (%) (.21) * b 1.25 Portfolio turnover rate (%) 28 ** a Based on average shares outstanding during the period. b Net investment income per share and the ratio of net investment income include non-recurring dividend income amounting to $0.45 per share and 0.89% of average daily net assets, for the year ended August 31, c Total return does not reflect the effect of any sales charges. * Annualized ** Not annualized *** Amount is less than $.005. Deutsche CROCI International Fund 21

22 Six Months Ended 2/28/18 Years Ended August 31, Period Ended Class R6 (Unaudited) /31/15 a Selected Per Share Data Net asset value, beginning of period $ $40.62 $44.89 $ Income (loss) from investment operations: Net investment income (loss) b Net realized and unrealized gain (loss) (3.89) (1.94) Total from investment operations (2.74) (1.28) Less distributions from: Net investment income (1.28) (1.60) (1.53) (5.10) Redemption fees.00 ***.00 ***.00 *** Net asset value, end of period $ $47.06 $40.62 $ Total Return (%) 4.58 ** (6.20) (2.77) ** Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses (%).76 * * Ratio of net investment income (loss) (%).88 * * Portfolio turnover rate (%) 28 ** c a For the period from December 1, 2014 (commencement of operations) to August 31, b Based on average shares outstanding during the period. c Represents the Fund s portfolio turnover rate for the year ended August 31, * Annualized ** Not annualized *** Amount is less than $ Deutsche CROCI International Fund

23 Six Months Ended 2/28/18 Years Ended August 31, Class S (Unaudited) Selected Per Share Data Net asset value, beginning of period $ $40.86 $45.15 $52.40 $45.58 $40.38 Income (loss) from investment operations: Net investment income (loss) a b 1.04 Net realized and unrealized gain (loss) (3.84) (3.72) Total from investment operations (2.81) (2.21) Less distributions from: Net investment income (1.21) (1.54) (1.48) (5.04) (1.02) (1.47) Redemption fees.00 ***.00 ***.00 ***.00 ***.00 *** Net asset value, end of period $ $47.34 $40.86 $45.15 $52.40 $45.58 Total Return (%) 4.52 ** (6.32) (4.48) Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) , Ratio of expenses (%).90 * Ratio of net investment income (loss) (%).79 * b 2.36 Portfolio turnover rate (%) 28 ** a Based on average shares outstanding during the period. b Net investment income per share and the ratio of net investment income include non-recurring dividend income amounting to $ 0.45 per share and 0.89% of average daily net assets, for the year ended August 31, * Annualized ** Not annualized *** Amount is less than $.005. Deutsche CROCI International Fund 23

24 Six Months Ended 2/28/18 Years Ended August 31, Institutional Class (Unaudited) Selected Per Share Data Net asset value, beginning of period $47.13 $40.69 $44.97 $52.17 $45.41 $40.25 Income (loss) from investment operations: Net investment income (loss) a b 1.00 Net realized and unrealized gain (loss) (3.85) (3.99) Total from investment operations (2.78) (2.15) Less distributions from: Net investment income (1.24) (1.57) (1.50) (5.05) (1.07) (1.54) Redemption fees.00 ***.00 ***.00 ***.00 ***.00 *** Net asset value, end of period $48.04 $47.13 $40.69 $44.97 $52.17 $45.41 Total Return (%) 4.56 ** (6.27) (4.37) Ratios to Average Net Assets and Supplemental Data Net assets, end of period ($ millions) Ratio of expenses (%).86 * Ratio of net investment income (loss) (%).83 * b 2.29 Portfolio turnover rate (%) 28 ** a Based on average shares outstanding during the period. b Net investment income per share and the ratio of net investment income include non-recurring dividend income amounting to $ 0.45 per share and 0.89% of average daily net assets, for the year ended August 31, * Annualized ** Not annualized *** Amount is less than $ Deutsche CROCI International Fund

25 Notes to Financial Statements (Unaudited) A. Organization and Significant Accounting Policies Deutsche CROCI International Fund (the Fund ) is a diversified series of Deutsche 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 T shares are subject to an initial sales charge and are only available through certain financial intermediaries. 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 R6 shares are not subject to initial or contingent deferred sales charges and are generally available only to certain retirement plans. 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 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. Deutsche CROCI International Fund 25

26 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. 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 securities. 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. Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and 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. 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 26 Deutsche CROCI International Fund

27 the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities. Disclosure about the classification of fair value measurements is included in a table following the Fund s Investment Portfolio. 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. Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the acquisition and disposition of foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The 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. Securities Lending. Deutsche Bank AG serves as security lending agent to the Fund. The 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 Deutsche CROCI International Fund 27

28 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 securities on loan, which were classified as common stock in the Investment Portfolio. The value of the related collateral exceeded the value of the securities loaned at period end. As of period end, the remaining contractual maturity of the collateral agreements were overnight and continuous. 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. 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. Under the Regulated Investment Company Modernization Act of 2010, net capital losses incurred post-enactment may be carried forward indefinitely, and their character is retained as short-term and/or long-term. Previously, net capital losses were carried forward for eight years and treated as shortterm losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. At August 31, 2017, the Fund had net tax basis capital loss carry forwards of approximately $781,226,000, including $315,889,000 of pre-enactment losses, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until August 31, 2018, the expiration date, whichever occurs first; and approximately $465,337,000 of post-enactment losses, which may be applied against realized net taxable capital gains indefinitely, including short-term losses ($260,433,000) and long-term losses ($204,904,000). At August 31, 2017, the aggregate cost of investments for federal income tax purposes was $1,069,558,813. The net unrealized appreciation for all investments based on tax cost was $27,805,770. This consisted of 28 Deutsche CROCI International Fund

29 aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost of $69,247,659 and aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value of $41,441,889. 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. The Fund s federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service. Distribution of Income and Gains. Distributions from net investment income of the Fund 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 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 investments, investments in passive foreign investment companies, certain securities sold at a loss and expired capital loss carryforwards. 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 Fees. Prior to February 1, 2017, the Fund imposed a redemption fee of 2% of the total redemption amount on Fund shares 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. Deutsche CROCI International Fund 29

30 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 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 an identified cost basis. Proceeds from litigation payments, if any, are included in net realized gain (loss) from investments. B. Derivative Instruments 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. For the six months ended February 28, 2018, from time to time the Fund entered into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on certain of its foreign currency denominated assets. 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 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. There were no open forward currency contracts as of February 28, For the six months ended February 28, 2018, the investment in forward currency contracts U.S. dollars purchased had a total contract value generally indicative of a range from $0 to approximately $267,023,000, and the investment in forward currency contracts U.S. dollars sold had a total contract value generally indicative of a range from $0 to approximately $3,726, Deutsche CROCI International Fund