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SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES:
Cash Account Trust DWS Health Care Fund DWS Target 2013 Fund
Government & Agency Securities DWS High Income Fund DWS Target 2014 Fund
Portfolio
Money Market Portfolio DWS High Income Plus Fund DWS Technology Fund
Tax-Exempt Portfolio DWS Intermediate Tax/AMT Free Fund DWS U.S. Bond Index Fund
Cash Management Fund Institutional DWS International Fund DWS Variable NAV Money Fund
Cash Reserve Fund, Inc. DWS Large Cap Focus Growth Fund Investors Cash Trust
Prime Series DWS Large Cap Value Fund Treasury Portfolio
Cash Reserves Fund Institutional NY Tax Free Money Fund
DWS Latin America Equity Fund
Daily Assets Fund Institutional Tax Free Money Fund Investment
DWS LifeCompass 2015 Fund
DWS Alternative Asset Allocation Tax-Exempt California Money Market
DWS LifeCompass 2020 Fund
Plus Fund Fund
DWS LifeCompass 2030 Fund
DWS Balanced Fund DWS Variable Series I:
DWS LifeCompass 2040 Fund
DWS Blue Chip Fund DWS Bond VIP
DWS LifeCompass Retirement Fund
DWS California Tax–Free Income Fund DWS Capital Growth VIP
DWS Lifecycle Long Range Fund
DWS Capital Growth Fund DWS Global Opportunities VIP
DWS Managed Municipal Bond Fund
DWS Climate Change Fund DWS Growth & Income VIP
DWS Massachusetts Tax-Free Fund
DWS Communications Fund DWS Health Care VIP
DWS Mid Cap Growth Fund
DWS Core Fixed Income Fund DWS International VIP
DWS Money Market Prime Series DWS Variable Series II:
DWS Core Plus Income Fund
DWS Money Market Series DWS Alternative Asset Allocation Plus
DWS Disciplined Market Neutral Fund
DWS New York Tax-Free Income Fund VIP
DWS Diversified International Equity
Fund DWS RREEF Global Infrastructure Fund DWS Balanced VIP
DWS Dreman International Value Fund DWS RREEF Global Real Estate Securities DWS Blue Chip VIP
Fund DWS Core Fixed Income VIP
DWS Dreman Mid Cap Value Fund
DWS RREEF Real Estate Securities Fund DWS Diversified International Equity VIP
DWS Dreman Small Cap Value Fund
DWS S&P 500 Index Fund
DWS EAFE® Equity Index Fund DWS Dreman Small Mid Cap Value VIP
DWS S&P 500 Plus Fund DWS Global Thematic VIP
DWS Emerging Markets Equity Fund
DWS Select Alternative Allocation Fund DWS Government & Agency Securities
DWS Emerging Markets Fixed Income
Fund DWS Short Duration Fund VIP
DWS Enhanced Commodity Strategy DWS Short Duration Plus Fund DWS High Income VIP
Fund DWS Short-Term Municipal Bond Fund DWS Large Cap Value VIP
DWS Equity 500 Index Fund DWS Small Cap Core Fund DWS Mid Cap Growth VIP
DWS Europe Equity Fund DWS Small Cap Growth Fund DWS Money Market VIP
DWS Floating Rate Plus Fund DWS Strategic Government Securities DWS Small Cap Growth VIP
DWS Global Bond Fund Fund DWS Strategic Income VIP
DWS Global Inflation Plus Fund DWS Strategic High Yield Tax-Free Fund DWS Strategic Value VIP
DWS Global Small Cap Growth Fund DWS Strategic Income Fund DWS Technology VIP
DWS Global Thematic Fund DWS Strategic Value Fund DWS Turner Mid Cap Growth VIP
DWS GNMA Fund DWS Target 2010 Fund DWS Investments VIT Funds:
DWS Gold & Precious Metals Fund DWS Target 2011 Fund DWS Equity 500 Index VIP
DWS Growth & Income Fund DWS Target 2012 Fund DWS Small Cap Index VIP
,
September 27 2010
DMF−3609ST
The following information replaces the existing disclosure in the Investing in the Funds-Financial Intermediary
Support Payments" or the How to Exchange or Sell Shares- Financial Intermediary Support Payments" sections
of each fund’s/portfolio’s Prospectuses:
FINANCIAL INTERMEDIARY SUPPORT PAYMENTS
The Advisor, DWS Investments Distributors, Inc. (the "Distributor") and/or their affiliates may pay additional compensa-
tion, out of their own assets and not as an additional charge to the fund, to selected affiliated and unaffiliated brokers,
dealers, participating insurance companies or other financial intermediaries ("financial advisors") in connection with the
sale and/or distribution of fund shares or the retention and/or servicing of fund investors and fund shares ( revenue shar-
ing"). Such revenue sharing payments are in addition to any distribution or service fees payable under any Rule 12b-1 or
service plan of the fund, any record keeping/sub-transfer agency/networking fees payable by the fund (generally through
the Distributor or an affiliate) and/or the Distributor to certain financial advisors for performing such services and any sales
charge, commissions, non-cash compensation arrangements expressly permitted under applicable rules of the Financial
Industry Regulatory Authority or other concessions described in the fee table or elsewhere in this prospectus or the
Statement of Additional Information as payable to all financial advisors. For example, the Advisor, the Distributor and/or
their affiliates may compensate financial advisors for providing the fund with shelf space" or access to a third party plat-
form or fund offering list or other marketing programs, including, without limitation, inclusion of the fund on preferred or
recommended sales lists, mutual fund supermarket" platforms and other formal sales programs; granting the Distributor
access to the financial advisor’s sales force; granting the Distributor access to the financial advisor’s conferences and
meetings; assistance in training and educating the financial advisor’s personnel; and obtaining other forms of marketing
support.
The level of revenue sharing payments made to financial advisors may be a fixed fee or based upon one or more of the
following factors: gross sales, current assets and/or number of accounts of the fund attributable to the financial advisor,
the particular fund or fund type or other measures as agreed to by the Advisor, the Distributor and/or their affiliates and
the financial advisors or any combination thereof. The amount of these revenue sharing payments is determined at the
discretion of the Advisor, the Distributor and/or their affiliates from time to time, may be substantial, and may be different
for different financial advisors based on, for example, the nature of the services provided by the financial advisor.
The Advisor, the Distributor and/or their affiliates currently make revenue sharing payments from their own assets in con-
nection with the sale and/or distribution of DWS fund shares or the retention and/or servicing of investors and DWS fund
shares to financial advisors in amounts that generally range from .01% up to .26% of assets of the fund serviced and
maintained by the financial advisor, .05% to .25% of sales of the fund attributable to the financial advisor, a flat fee of
$4,000 up to $10,000, or any combination thereof. These amounts are subject to change at the discretion of the Advisor,
the Distributor and/or their affiliates. Receipt of, or the prospect of receiving, this additional compensation may influence
your financial advisor’s recommendation of the fund or of any particular share class of the fund. You should review your
financial advisor’s compensation disclosure and/or talk to your financial advisor to obtain more information on how this
compensation may have influenced your financial advisor’s recommendation of the fund. Additional information regarding
these revenue sharing payments is included in the fund’s Statement of Additional Information, which is available to you on
request at no charge (see the back cover of this prospectus for more information on how to request a copy of the State-
ment of Additional Information).
The Advisor, the Distributor and/or their affiliates may also make such revenue sharing payments to financial advisors
under the terms discussed above in connection with the distribution of both DWS funds and non-DWS funds by financial
,
advisors to retirement plans that obtain record keeping services from ADP Inc. or ExpertPlan Inc. on the DWS Invest-
ments branded retirement plan platform (the Platform") with the level of revenue sharing payments being based upon
sales of both the DWS funds and the non-DWS funds by the financial advisor on the Platform or current assets of both
the DWS funds and the non-DWS funds serviced and maintained by the financial advisor on the Platform.
It is likely that broker-dealers that execute portfolio transactions for the fund will include firms that also sell shares of the
DWS funds to their customers. However, the Advisor will not consider sales of DWS fund shares as a factor in the selec-
tion of broker-dealers to execute portfolio transactions for the DWS funds. Accordingly, the Advisor has implemented poli-
cies and procedures reasonably designed to prevent its traders from considering sales of DWS fund shares as a factor in
the selection of broker-dealers to execute portfolio transactions for the fund. In addition, the Advisor, the Distributor
and/or their affiliates will not use fund brokerage to pay for their obligation to provide additional compensation to financial
advisors as described above.
Please Retain This Supplement for Future Reference
,
September 27 2010
DMF−3609ST
SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES:
DWS Alternative Asset Allocation Plus DWS International Fund DWS Target 2013 Fund
Fund
DWS Large Cap Focus Growth Fund DWS Target 2014 Fund
DWS Balanced Fund DWS Large Cap Value Fund DWS Technology Fund
DWS Blue Chip Fund DWS Latin America Equity Fund DWS U.S. Bond Index Fund
DWS California Tax-Free Income Fund
DWS LifeCompass 2015 Fund DWS Variable Series I:
DWS Capital Growth Fund
DWS LifeCompass 2020 Fund DWS Bond VIP
DWS Climate Change Fund DWS LifeCompass 2030 Fund DWS Capital Growth VIP
DWS Communications Fund DWS LifeCompass 2040 Fund DWS Global Opportunities VIP
DWS Core Fixed Income Fund
DWS LifeCompass Retirement Fund DWS Growth & Income VIP
DWS Core Plus Income Fund
DWS Lifecycle Long Range Fund DWS Health Care VIP
DWS Disciplined Market Neutral Fund DWS Managed Municipal Bond Fund DWS International VIP
DWS Diversified International Equity Fund DWS Massachusetts Tax-Free Fund
DWS Variable Series II:
DWS Dreman International Value Fund
DWS Mid Cap Growth Fund
DWS Alternative Asset Allocation Plus VIP
DWS Dreman Mid Cap Value Fund
DWS New York Tax-Free Income Fund
DWS Balanced VIP
DWS Dreman Small Cap Value Fund DWS RREEF Global Infrastructure Fund
DWS Blue Chip VIP
DWS EAFE Equity Index Fund DWS RREEF Global Real Estate Securities
DWS Core Fixed Income VIP
DWS Emerging Markets Equity Fund Fund
DWS Diversified International Equity VIP
DWS Emerging Markets Fixed Income Fund DWS RREEF Real Estate Securities Fund
DWS Dreman Small Mid Cap Value VIP
DWS Enhanced Commodity Strategy Fund DWS S&P 500 Index Fund
DWS Global Thematic VIP
DWS Equity 500 Index Fund DWS S&P 500 Plus Fund
DWS Government & Agency Securities VIP
DWS Europe Equity Fund DWS Select Alternative Allocation Fund
DWS High Income VIP
DWS Floating Rate Plus Fund DWS Short Duration Fund
DWS Large Cap Value VIP
DWS Global Bond Fund DWS Short Duration Plus Fund
DWS Mid Cap Growth VIP
DWS Global Inflation Plus Fund DWS Short-Term Municipal Bond Fund
DWS Money Market VIP
DWS Global Small Cap Growth Fund DWS Small Cap Core Fund
DWS Small Cap Growth VIP
DWS Global Thematic Fund DWS Small Cap Growth Fund
DWS Strategic Income VIP
DWS GNMA Fund DWS Strategic Government Securities Fund
DWS Strategic Value VIP
DWS Gold & Precious Metals Fund DWS Strategic High Yield Tax-Free Fund
DWS Technology VIP
DWS Growth & Income Fund DWS Strategic Income Fund
DWS Turner Mid Cap Growth VIP
DWS Health Care Fund DWS Strategic Value Fund
DWS High Income Fund DWS Target 2010 Fund DWS Investments VIT Funds:
DWS High Income Plus Fund DWS Target 2011 Fund DWS Equity 500 Index VIP
DWS Intermediate Tax/AMT Free Fund DWS Target 2012 Fund DWS Small Cap Index VIP
The following replaces similar information under The Investment Advisor" subsection of the WHO MANAGES AND
OVERSEES THE FUND" section of each fund’s prospectus:
Deutsche Investment Management Americas Inc. ( DIMA" or the Advisor"), with headquarters at 345 Park Avenue, New
York, NY 10154, is the investment advisor for the fund. Under the oversight of the Board, the Advisor makes investment
decisions, buys and sells securities for the fund and conducts research that leads to these purchase and sale decisions.
The Advisor is an indirect, wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global banking
institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail,
private and commercial banking, investment banking and insurance. The Advisor provides a full range of global investment
advisory services to institutional and retail clients.
August 9, 2010
DMF−3606ST
DWS Investments is part of the Asset Management division of Deutsche Bank AG and, within the US, represents the
retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, DIMA and DWS Trust
Company. DWS Investments is a global asset management organization that offers a wide range of investing expertise
and resources, including hundreds of portfolio managers and analysts and an office network that reaches the world’s
major investment centers. This well-resourced global investment platform brings together a wide variety of experience
and investment insight across industries, regions, asset classes and investing styles.
The Advisor may utilize the resources of its global investment platform to provide investment management services
through branch offices located outside the US In some cases, the Advisor may also utilize its branch offices or affiliates
located in the US or outside the US to perform certain services such as trade execution, trade matching and settlement,
or various administrative, back-office or other services. To the extent services are performed outside the US, such activity
may be subject to both US and foreign regulation. It is possible that the jurisdiction in which the Advisor or its affiliate
performs such services may impose restrictions or limitations on portfolio transactions that are different from, and in
addition to, those that apply in the US.
Please Retain This Supplement for Future Reference
August 9, 2010
DMF−3606ST
SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES:
DWS California Tax-Free Income Fund DWS Intermediate Tax/AMT Free Fund DWS Variable Series I:
DWS Core Fixed Income Fund DWS Managed Municipal Bond Fund DWS Bond VIP
DWS Massachusetts Tax-Free Fund
DWS Core Plus Income Fund DWS Variable Series II:
DWS New York Tax-Free Income Fund
DWS Emerging Markets Fixed Income Fund DWS Core Fixed Income VIP
DWS Short Duration Fund
DWS Floating Rate Plus Fund DWS Government & Agency Securities VIP
DWS Short Duration Plus Fund
DWS Global Bond Fund DWS High Income VIP
DWS Short-Term Municipal Bond Fund
DWS Money Market VIP
DWS Global Inflation Plus Fund DWS Strategic Government Securities Fund
DWS Strategic Income VIP
DWS GNMA Fund DWS Strategic High Yield Tax-Free Fund
DWS High Income Fund DWS Strategic Income Fund
DWS High Income Plus Fund DWS U.S. Bond Index Fund
The following replaces similar information under the For More Information" subsection of the OTHER POLICIES AND
RISKS" section of each fund’s prospectus:
A complete list of each fund’s portfolio holdings as of the month−end is posted on www.dws−investments.com on or
after the last day of the following month. More frequent posting of portfolio holdings information may be made from
time to time on www.dws−investments.com. The posted portfolio holdings information is available by fund and generally
remains accessible at least until the date on which a fund files its Form N−CSR or N−Q with the Securities and Exchange
Commission for the period that includes the date as of which the posted information is current. Each fund’s Statement of
Additional Information includes a description of a fund’s policies and procedures with respect to the disclosure of a fund’s
portfolio holdings.
Please Retain This Supplement for Future Reference
July 23, 2010
DMF-3698
SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES
DWS Enhanced Commodity Strategy Fund DWS Short Duration Plus Fund
DWS Global Inflation Plus Fund DWS Strategic Government Securities Fund
DWS GNMA Fund DWS Strategic Income Fund
DWS Government & Agency Securities VIP
DWS Strategic Income VIP
DWS Short Duration Fund
The following person is added to the portfolio management team as reflected in the Portfolio Manager(s)" sub-heading of the
"MANAGEMENT" section of each fund’s prospectus.
John D. Ryan, Director. Portfolio Manager of the fund. Joined the fund in 2010.
The following person is added to the portfolio management team, as reflected under the "MANAGEMENT" sub-heading of the
FUND DETAILS" section of each fund’s prospectus.
John D. Ryan, Director. Portfolio Manager of the fund. Joined the fund in 2010.
H Joined Deutsche Asset Management in 2010 from Northern Trust where he served as a senior portfolio manager. Pre-
viously, he served as a portfolio manager and head of credit trading for Deutsche Asset Management from 1998–2003.
H Over 18 years of investment industry experience.
H BA in Economics, University of Chicago; MBA, University of Chicago.
Please Retain This Supplement for Future Reference
July 16, 2010
DMF−3604ST
P ROSP E CTU S
MAY 1, 2 0 1 0
DWS VARIABLE SERIES II
CLASS B
............................................................................................................................................................
DWS Government & Agency Securities VIP
............................................................................................................................................................
This prospectus should be read in conjunction with the variable life insurance or variable annuity contract
prospectus and plan documents for tax-qualified plans. These shares are available and are being marketed
exclusively as a pooled funding vehicle for life insurance companies writing all types of variable life insur-
ance policies and variable annuity contracts.
The Securities and Exchange Commission (SEC) does not approve or disapprove these shares or determine
whether the information in this prospectus is truthful or complete. It is a criminal offense for anyone to inform
you otherwise.
TABLE OF CONTENTS
DWS GOVERNMENT & AGENCY INVESTING IN THE FUND
SECURITIES VIP Your Investment in the Fund . . . . . . . . . . . . . . . . . . . . . . . . . 7
Investment Objective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Policies about transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Fees and Expenses of the Fund . . . . . . . . . . . . . . . . . . . . . 1 Buying and Selling Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Principal Investment Strategy . . . . . . . . . . . . . . . . . . . . . . . 1 How the Fund Calculates Share Price . . . . . . . . . . . . . . . 10
Main Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Past Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Marketing and Distribution Fees. . . . . . . . . . . . . . . . . . . . . 11
Purchase and Sale of Fund Shares. . . . . . . . . . . . . . . . . . . 3
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . 13
Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Payments to Financial Intermediaries. . . . . . . . . . . . . . . . 3 APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
FUND DETAILS Hypothetical Expense Summary. . . . . . . . . . . . . . . . . . . . . 14
Additional Index Information. . . . . . . . . . . . . . . . . . . . . . . . . 14
Additional Information About Fund Strategies and
Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DWS Government & Agency Securities VIP . . . . . . . . . 4
Other Policies and Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Who Manages and Oversees the Fund . . . . . . . . . . . . . . 6
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
YOUR INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY, ENTITY OR PERSON.
DWS GOVERNMENT & AGENCY SECURITIES VIP
INVESTM ENT OB J E CT IVE PO RTFO LIO TURNOVER
The fund seeks high current income consistent with pres- The fund pays transaction costs when it buys and sells
ervation of capital. securities (or “turns over” its portfolio). A higher portfolio
turnover may indicate higher transaction costs. These
FEES AND EXPEN SE S O F T H E FUN D costs are not reflected in annual fund operating expenses
This table describes the fees and expenses you may pay if or in the expense example, but are reflected in fund
you buy and hold shares of the fund. This information does performance.
not reflect fees associated with the separate account that Portfolio turnover rate for fiscal year 2009: 390%.
invests in the fund or any variable life insurance policy or
variable annuity contract for which the fund is an invest- PRIN CIPAL INVESTMEN T STRATEGY
ment option. These fees will increase expenses. Main investments. Under normal circumstances, the fund
SHAREHOLDER FE E S invests at least 80% of net assets, plus the amount of
(paid directly from your investment) None any borrowings for investment purposes, in US govern-
ment securities and repurchase agreements of US
ANNUAL FUND O P E R AT IN G E X P E N S E S (expenses government securities. US government-related debt instru-
that you pay each year as a % of the value of your investment)
ments in which the fund may invest include: (i) direct
obligations of the US Treasury; (ii) securities such as Ginnie
B Maes which are mortgage-backed securities issued and
Management fee 0.45 guaranteed by the Government National Mortgage Asso-
Distribution/service ciation (GNMA) and supported by the full faith and credit of
(12b-1) fees 0.25 the United States; and (iii) securities issued or guaran-
Other expenses (includes an administrative fee) 0.22 teed, as to their payment of principal and interest, by US
Total annual fund operating expenses 0.92 government agencies or government sponsored entities,
some of which may be supported only by the credit of the
EXAMPLE issuer.
This Example is intended to help you compare the cost of The fund normally invests all of its assets in securities
investing in the fund with the cost of investing in other issued or guaranteed by the US government, its agencies
mutual funds. The Example assumes that you invest or instrumentalities, except the fund may invest up to 10%
$10,000 in the fund for the time periods indicated and then of its net assets in cash equivalents, such as money mar-
redeem all of your shares at the end of those periods. The ket funds, and short-term bond funds. These securities
Example also assumes that your investment has a 5% may not be issued or guaranteed by the US government,
return each year and that the fund’s operating expenses its agencies or instrumentalities.
remain the same. Although your actual costs may be Management process. In deciding which types of govern-
higher or lower, based on these assumptions your costs ment bonds to buy and sell, portfolio management first
would be: considers the relative attractiveness of US Treasuries com-
1 YE A R 3 YE A R S 5 YE A R S 1 0 YE A R S
pared to other US government and agency securities and
then determines allocations. Their decisions are gener-
$94 $293 $509 $1,131
ally based on a number of factors, including changes in
supply and demand within the bond market.
Prospectus May 1, 2010 1 DWS Government & Agency Securities VIP
In choosing individual bonds, portfolio management group, if there is a potential or actual loss of principal and
reviews each bond’s fundamentals, compares the yields of interest of these securities, the US government might pro-
shorter maturity bonds to those of longer maturity bonds vide financial support, but has no obligation to do so.
and uses technical analysis to project prepayment rates Securities lending risk. Any decline in the value of a port-
and other factors that could affect a bond’s attractiveness. folio security that occurs while the security is out on loan
Portfolio management may also adjust the duration (a mea- is borne by the fund, and will adversely affect performance.
sure of sensitivity to interest rate movements) of the Also, there may be delays in recovery of securities loaned
fund’s portfolio, based upon their analysis. or even a loss of rights in the collateral should the bor-
The fund may trade actively. This could raise transaction rower of the securities fail financially while holding the
costs (thus lowering returns). security.
Derivatives. The fund may use various types of derivatives (con- Counterparty risk. A financial institution or other
tracts whose value is based on, for example, indices, currencies counterparty with whom the fund does business (such as
or securities) for hedging, risk management or non-hedging pur- trading or securities lending), or that underwrites, distrib-
poses to seek to enhance potential gains. The fund may use utes or guarantees any investments or contracts that the
derivatives as a substitute for direct investment in a particular fund owns or is otherwise exposed to, may decline in finan-
asset class or to keep cash on hand to meet shareholder redemp- cial health and become unable to honor its commitments,
tions or other needs.
which could lead to losses for the fund.
Securities Lending. The fund may lend securities (up to one-
third of total assets) to approved institutions. Liquidity risk. In certain situations, it may be difficult or
impossible to sell an investment in an orderly fashion at an
acceptable price. This may be an ongoing risk for some
MAIN RISKS investments, such as derivatives or restricted securities
There are several risk factors that could hurt the fund’s per- that typically trade only among a limited number of
formance, cause you to lose money or cause the fund’s investors.
performance to trail that of other investments.
Pricing risk. If market conditions make it difficult to value
Interest rate risk. When interest rates rise, prices of debt some investments, the fund may value these investments
securities generally decline. The longer the duration of using more subjective methods, such as fair value pricing.
the fund’s debt securities, the more sensitive it will be to
Prepayment and extension risk. When interest rates
interest rate changes. (As a general rule, a 1% rise in inter-
fall, issuers of high interest debt obligations may pay off
est rates means a 1% fall in value for every year of
the debts earlier than expected (prepayment risk), and the
duration.)
fund may have to reinvest the proceeds at lower yields.
Derivatives risk. Risks associated with derivatives include When interest rates rise, issuers of lower interest debt
the risk that the derivative is not well correlated with the obligations may pay off the debts later than expected
security, index or currency to which it relates; the risk that (extension risk), thus keeping the fund’s assets tied up in
derivatives may result in losses or missed opportunities; lower interest debt obligations. These events could hurt
the risk that the fund will be unable to sell the derivative fund performance.
because of an illiquid secondary market; the risk that a
counterparty is unwilling or unable to meet its obligation; PAST PERFO RMAN CE
and the risk that the derivative transaction could expose
How a fund’s returns vary from year to year can give an
the fund to the effects of leverage, which could increase
idea of its risk; so can comparing fund performance to over-
the fund’s exposure to the market and magnify potential
all market performance (as measured by an appropriate
losses.
market index). Past performance may not indicate future
Security selection risk. The securities in the fund’s portfo- results. All performance figures below assume that divi-
lio may decline in value. Portfolio management could be dends were reinvested. For more recent performance
wrong in its analysis of industries, companies, economic figures, go to www.dws-investments.com (the Web site
trends, the relative attractiveness of different securities or does not form a part of this prospectus) or call the phone
other matters. number for your share class included in this prospectus.
Credit Risk. The fund’s performance could be hurt if a secu- This information doesn’t reflect fees associated with the
rity declines in credit quality or goes into default, or if an separate account that invests in the fund or any variable life
issuer does not make timely payments of interest or insurance policy or variable annuity contract for which the
principal. fund is an investment option. These fees will reduce
returns.
Some securities issued by US government agencies or
instrumentalities are backed by the full faith and credit of The inception date for Class B was July 1, 2002. In the bar
the US government. Others are supported only by the chart and table, the performance figures for Class B before
credit of that agency or instrumentality. For this latter that date are based on the historical performance of the
Prospectus May 1, 2010 2 DWS Government & Agency Securities VIP
fund’s original share class (Class A), adjusted to reflect the create a conflict of interest by influencing the financial
higher gross total annual operating expenses of Class B. intermediary and your salesperson to recommend the fund
Class A is offered in a different prospectus. over another investment. Ask your salesperson or visit
your insurance company’s web site for more information.
CAL ENDAR YEAR TOTA L R ET U RN S (%) (Class B)
10.65
7.22 7.81 7.70
5.43 4.60
1.83 3.36 2.24 3.74
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Best Quarter: 4.07%, Q3 2001 Worst Quarter: -1.06%, Q2 2004
Year-to-Date as of 3/31/10: 1.49%
AVERAGE ANNUA L TO T AL RE TU R N S
(For periods ended 12/31/2009 expressed as a %)
Class 1 5 10
Inception Year Years Years
Class B 7/1/02 7.70 4.73 5.42
Barclays Capital GNMA
Index 5.37 5.59 6.30
MANAGEMENT
Investment Advisor
Deutsche Investment Management Americas Inc.
Portfolio Manager(s)
William Chepolis, CFA, Managing Director. Co-Manager
of the fund. Joined the fund in 2002.
Ohn Choe, CFA, Associate. Portfolio Manager of the fund.
Joined the fund in 2010.
PURCHASE AND S A L E OF FUN D SH A RE S
The fund is intended for use in a variable insurance
product. You should contact the sponsoring insurance com-
pany for information on how to purchase and sell shares of
the fund.
TAX INFORM ATIO N
Generally, owners of variable annuity and variable life con-
tracts are not subject to current federal income taxation
on distributions of income or gains with respect to such
contracts. For further information concerning federal
income tax consequences for the holders of variable annu-
ity contracts and variable life insurance policies, such
holders should consult the prospectus used in connection
with the issuance of their particular contracts or policies.
PAYMENTS TO FIN A N C IA L INTE RM E D IARIES
If you purchase the fund through selected affiliated and
unaffiliated brokers, dealers, participating insurance com-
panies or other financial intermediaries, the fund and its
affiliates may pay the financial intermediary for the sale of
fund shares and related services. These payments may
Prospectus May 1, 2010 3 DWS Government & Agency Securities VIP
FUN D DETA IL S
ADDITIONAL INFO RM A T ION A B O UT FUN D Derivatives. The fund may use various types of derivatives (con-
STRATEGIES AN D R ISKS tracts whose value is based on, for example, indices, currencies
or securities) for hedging, risk management or non-hedging pur-
DWS Government & Agency Securities VIP
poses to seek to enhance potential gains. The fund may use
PRINC IPAL INVES T M E N T S T RA TE GY derivatives as a substitute for direct investment in a particular
asset class or to keep cash on hand to meet shareholder redemp-
Main investments. Under normal circumstances, the fund tions or other needs.
invests at least 80% of net assets, plus the amount of Securities Lending. The fund may lend securities (up to one-
any borrowings for investment purposes, in US govern- third of total assets) to approved institutions.
ment securities and repurchase agreements of US
government securities. US government-related debt instru-
ments in which the fund may invest include: (i) direct MAIN RISKS
obligations of the US Treasury; (ii) securities such as Ginnie There are several risk factors that could hurt the fund’s per-
Maes which are mortgage-backed securities issued and formance, cause you to lose money or cause the fund’s
guaranteed by the Government National Mortgage Asso- performance to trail that of other investments.
ciation (GNMA) and supported by the full faith and credit of Interest rate risk. When interest rates rise, prices of debt
the United States; and (iii) securities issued or guaran- securities generally decline. The longer the duration of
teed, as to their payment of principal and interest, by US the fund’s debt securities, the more sensitive it will be to
government agencies or government sponsored entities, interest rate changes. (As a general rule, a 1% rise in inter-
some of which may be supported only by the credit of the est rates means a 1% fall in value for every year of
issuer. duration.)
The fund normally invests all of its assets in securities Derivatives risk. Risks associated with derivatives include
issued or guaranteed by the US government, its agencies the risk that the derivative is not well correlated with the
or instrumentalities, except the fund may invest up to 10% security, index or currency to which it relates; the risk that
of its net assets in cash equivalents, such as money mar- derivatives may result in losses or missed opportunities;
ket funds, and short-term bond funds. These securities the risk that the fund will be unable to sell the derivative
may not be issued or guaranteed by the US government, because of an illiquid secondary market; the risk that a
its agencies or instrumentalities. counterparty is unwilling or unable to meet its obligation;
Management process. In deciding which types of govern- and the risk that the derivative transaction could expose
ment bonds to buy and sell, portfolio management first the fund to the effects of leverage, which could increase
considers the relative attractiveness of US Treasuries com- the fund’s exposure to the market and magnify potential
pared to other US government and agency securities and losses. There is no guarantee that derivatives, to the extent
then determines allocations. Their decisions are gener- employed, will have the intended effect, and their use
ally based on a number of factors, including changes in could cause lower returns or even losses to the fund. The
supply and demand within the bond market. use of derivatives by the fund to hedge risk may reduce
In choosing individual bonds, portfolio management the opportunity for gain by offsetting the positive effect of
reviews each bond’s fundamentals, compares the yields of favorable price movements.
shorter maturity bonds to those of longer maturity bonds Security selection risk. The securities in the fund’s portfo-
and uses technical analysis to project prepayment rates lio may decline in value. Portfolio management could be
and other factors that could affect a bond’s attractiveness. wrong in its analysis of industries, companies, economic
Portfolio management may also adjust the duration (a mea- trends, the relative attractiveness of different securities or
sure of sensitivity to interest rate movements) of the other matters.
fund’s portfolio, based upon their analysis.
Prospectus May 1, 2010 4 Fund Details
Credit Risk. The fund’s performance could be hurt if a secu- unexpected behavior in interest rates could increase the
rity declines in credit quality or goes into default, or if an volatility of the fund’s share price and yield and could hurt
issuer does not make timely payments of interest or fund performance.
principal.
Some securities issued by US government agencies or O THER PO LICIES AN D RISKS
instrumentalities are backed by the full faith and credit of While the previous pages describe the main points of the
the US government. Others are supported only by the fund’s strategy and risks, there are a few other matters
credit of that agency or instrumentality. For this latter to know about:
group, if there is a potential or actual loss of principal and Although major changes tend to be infrequent, the
interest of these securities, the US government might pro- fund’s Board could change the fund’s investment objec-
vide financial support, but has no obligation to do so. tive without seeking shareholder approval. However,
Securities lending risk. Any decline in the value of a port- the Board will provide shareholders with at least 60 days
folio security that occurs while the security is out on loan notice prior to making any changes to the fund’s 80%
is borne by the fund, and will adversely affect performance. investment policy as described herein.
Also, there may be delays in recovery of securities loaned When in the Advisor’s opinion it is advisable to adopt a
or even a loss of rights in the collateral should the bor- temporary defensive position because of unusual and
rower of the securities fail financially while holding the adverse or other market conditions, up to 100% of the
security. fund’s assets may be held in cash or invested in money
market securities or other short-term investments. Short-
Counterparty risk. A financial institution or other
term investments consist of (1) foreign and domestic
counterparty with whom the fund does business (such as
obligations of sovereign governments and their agencies
trading or securities lending), or that underwrites, distrib-
and instrumentalities, authorities and political subdivi-
utes or guarantees any investments or contracts that the
sions; (2) other short-term rated debt securities or, if
fund owns or is otherwise exposed to, may decline in finan-
unrated, determined to be of comparable quality in the
cial health and become unable to honor its commitments.
opinion of the Advisor; (3) commercial paper; (4) bank
This could cause losses for the fund or could delay the
obligations, including negotiable certificates of deposit,
return or delivery of collateral or other assets to the fund.
time deposits and bankers’ acceptances; and (5) repur-
Liquidity risk. In certain situations, it may be difficult or chase agreements. Short-term investments may also
impossible to sell an investment in an orderly fashion at an include shares of money market mutual funds. This
acceptable price. This risk can be ongoing for any secu- could prevent losses, but, while engaged in a temporary
rity that does not trade actively or in large volumes, for any defensive position, the fund will not be pursuing its
security that trades primarily on smaller markets, and for investment objective. However, portfolio management
investments that typically trade only among a limited num- may choose not to use these strategies for various rea-
ber of large investors (such as certain types of derivatives sons, even in volatile market conditions.
or restricted securities). In unusual market conditions, even Portfolio management measures credit quality at the
normally liquid securities may be affected by a degree of time it buys securities, using independent rating agen-
liquidity risk. This may affect only certain securities or an cies or, for unrated securities, its own judgment. All
overall securities market. securities must meet the credit quality standards applied
Pricing risk. If market conditions make it difficult to value by portfolio management at the time they are pur-
some investments, the fund may value these investments chased. If a security’s credit quality changes, portfolio
using more subjective methods, such as fair value pricing. management will decide what to do with the security,
In such cases, the value determined for an investment based on its assessment of what would most benefit
could be different than the value realized upon such invest- the fund.
ment’s sale. As a result, you could pay more than the Certain DWS fund-of-funds are permitted to invest in
market value when buying fund shares or receive less than other DWS funds. As a result, the fund may have large
the market value when selling fund shares. inflows or outflows of cash from time to time. This could
have adverse effects on the fund’s performance if the
Prepayment and extension risk. When interest rates fall,
fund were required to sell securities or invest cash at
issuers of high interest debt obligations may pay off the
times when it otherwise would not do so. This activity
debts earlier than expected (prepayment risk), and the
could also accelerate the realization of capital gains and
fund may have to reinvest the proceeds at lower yields.
increase the fund’s transaction costs.
When interest rates rise, issuers of lower interest debt
obligations may pay off the debts later than expected For More Information
(extension risk), thus keeping the fund’s assets tied up in This prospectus doesn’t tell you about every policy or risk
lower interest debt obligations. Prepayments could also of investing in the fund.
create capital gains tax liability in some instances. Any
Prospectus May 1, 2010 5 Fund Details
If you want more information on the fund’s allowable secu- Management Fee. The Advisor receives a management
rities and investment practices and the characteristics and fee from the fund. Below is the management rate paid by
risks of each one, you may want to request a copy of the the fund for the most recent fiscal year, as a percentage of
Statement of Additional Information (the back cover tells the fund’s average daily net assets:
you how to do this).
Keep in mind that there is no assurance that the fund will Fund Name Fee Paid
achieve its investment objective. DWS Government & Agency
Securities VIP 0.45%
A complete list of the fund’s portfolio holdings as of the
month-end is posted on www.dws-investments.com on or A discussion regarding the basis for the Board renewal of
about the 15th day of the following month. More frequent the fund’s investment management agreement is con-
posting of portfolio holdings information may be made tained in the shareholder report for the annual period
from time to time on www.dws-investments.com. The ended December 31 (see “Shareholder reports” on the
posted portfolio holdings information is available by fund back cover).
and generally remains accessible at least until the date on
which the fund files its Form N-CSR or N-Q with the Securi- Under a separate administrative services agreement
ties and Exchange Commission for the period that includes between the fund and the Advisor, the fund pays the Advi-
the date as of which the posted information is current. sor a fee of 0.10% for providing most of the fund’s
The fund’s Statement of Additional Information includes a administrative services.
description of the fund’s policies and procedures with
respect to the disclosure of the fund’s portfolio holdings. MAN AGEMEN T
DWS Government & Agency Securities VIP
WHO MANAGES A ND OVE RSE E S T H E FU N D
William Chepolis, CFA, Managing Director. Co-Manager
The Investment Advisor of the fund. Joined the fund in 2002.
Deutsche Investment Management Americas Inc. (“DIMA” Joined Deutsche Asset Management in 1998 after 13
or the “Advisor”), with headquarters at 345 Park Avenue, years of experience as vice president and portfolio man-
New York, NY 10154, is the investment advisor for the ager for Norwest Bank where he managed the bank’s
fund. Under the oversight of the Board, the Advisor makes fixed income and foreign exchange portfolios.
investment decisions, buys and sells securities for the Portfolio Manager for Retail Fixed Income: New York.
fund and conducts research that leads to these purchase BIS, University of Minnesota.
and sale decisions. The Advisor provides a full range of glo- Ohn Choe, CFA, Associate. Portfolio Manager of the fund.
bal investment advisory services to institutional and retail Joined the fund in 2010.
clients. Portfolio Manager for Retail Fixed Income: New York.
DWS Investments is part of the Asset Management divi- Joined Deutsche Asset Management in 2005.
sion of Deutsche Bank AG and, within the US, represents BSBA, Georgetown University.
the retail asset management activities of Deutsche Bank The fund’s Statement of Additional Information provides
AG, Deutsche Bank Trust Company Americas, DIMA and additional information about a portfolio manager’s invest-
DWS Trust Company. ments in the fund, a description of the portfolio
Deutsche Asset Management is a global asset manage- management compensation structure and information
ment organization that offers a wide range of investing regarding other accounts managed.
expertise and resources, including hundreds of portfolio
managers and analysts and an office network that reaches
the world’s major investment centers. This well-resourced
global investment platform brings together a wide variety
of experience and investment insight across industries,
regions, asset classes and investing styles.
The Advisor is an indirect, wholly owned subsidiary of
Deutsche Bank AG. Deutsche Bank AG is a major global
banking institution that is engaged in a wide range of finan-
cial services, including investment management, mutual
funds, retail, private and commercial banking, investment
banking and insurance.
Prospectus May 1, 2010 6 Fund Details
INVE ST I N G IN TH E FU N D
YOUR INVESTM E NT IN T H E FUN D Retail Funds may be smaller or larger than the fund and
The information in this section may affect anyone who have different expense ratios than the fund. As a result, the
selects the portfolio as an investment option in a variable performance of the fund and a Retail Fund will differ.
annuity contract or variable life insurance policy that offers Should any conflict between contract owners arise that
the portfolio. These contracts and policies are described would require that a substantial amount of net assets be
in separate prospectuses issued by participating insurance withdrawn from the fund, orderly portfolio management
companies. The fund assumes no responsibility for such could be disrupted to the potential detriment of sharehold-
prospectuses. ers of the fund.
The fund has a verification process for new insurance com-
POL ICIES ABOUT T RA N S A C T IO NS
pany accounts to help the government fight the funding
The information in this prospectus applies to Class B of terrorism and money laundering activities. Federal law
shares of the fund. The fund may offer two classes of requires all financial institutions to obtain, verify and record
shares. Class B shares are offered at net asset value and information that identifies each insurance company that
are subject to 12b-1 fees. opens an account. This means that when an insurance com-
Technically, the shareholders of DWS Variable Series II pany opens an account, the fund will ask for its name,
(which include the fund just described) are the participat- address and other information that will allow the fund to
ing insurance companies (the “insurance companies”) that identify the company. This information will be verified to
offer the fund as choices for holders of certain variable ensure the identity of all insurance companies opening an
annuity contracts or variable life insurance policies (the account.
“contract(s)”) issued or sponsored by the insurance com- For certain insurance companies, the fund might request
panies. The insurance companies may pass through voting additional information (for instance, the fund would ask for
rights to the contract owners. The fund does not sell documents such as the insurance company’s articles of
shares directly to the public. The fund sells shares only to incorporation) to help the fund verify the insurance compa-
separate accounts of insurance companies. As a contract ny’s identity.
owner, your premium payments are allocated to the fund
The fund will not complete the purchase of any shares for
by the insurance companies in accordance with your con-
an account until all information has been provided and the
tract. Please see the contract prospectus that
”
application has been submitted in “good order. Once the
accompanies this prospectus for a detailed explanation of
application is determined to be in good order, the pur-
your contract. Depending on context in the prospectus, the
chase(s) will be effected at the net asset value per share
terms “you” and “yours” refer to either a contract owner
next calculated.
or to the insurance company that issues the contract. Ref-
erences to “buying, “purchasing” or “holding” fund
” The fund may reject a new account application if the insur-
shares refer only to the insurance company, not the con- ance company doesn’t provide any required or requested
tract owner. identifying information, or for other reasons.
Please bear in mind that there are important differences
between DWS retail funds available to any investor (a BU YIN G AN D SELLIN G SHARES
“Retail Fund”) and those that are only available through The fund is open for business each day the New York
certain financial institutions, such as insurance companies. Stock Exchange is open. The fund calculates its share price
For example, Retail Funds, unlike the fund, are not sold every business day, as of the close of regular trading on
to insurance company separate accounts to fund invest- the New York Stock Exchange (typically 4 p.m. Eastern
ments in variable insurance contracts. In addition, the time, but sometimes earlier, as in the case of scheduled
investment objective, policies and strategies of the fund, half-day trading or unscheduled suspensions of trading).
while similar to those of a Retail Fund, are not identical.
Prospectus May 1, 2010 7 Investing in the Fund
The fund continuously sells shares to each insurance com- The fund may close and liquidate an account if a fund is
pany separate account, without a sales charge, at the net unable to verify provided information, or for other rea-
asset value per share next determined after a proper pur- sons; if a fund decides to close the account, the shares
chase order is placed by the insurance company. The will be redeemed at the net asset value per share next
insurance company offers contract owners units in its calculated after we determine to close the account; the
separate accounts which correspond to shares in a fund. insurance company may be subject to gain or loss on the
Each insurance company submits purchase and redemp- redemption of the fund shares and may incur tax liabil-
tion orders to a fund based on allocation instructions for ity.
premium payments, transfer instructions and surrender or The fund may pay for shares sold by “redeeming in
partial withdrawal requests for contract owners, as set ”
kind, that is, by distributing to you marketable securities
forth in the accompanying prospectus for the contracts. (which typically will involve brokerage costs for you to
These orders reflect the amount of premium payments to liquidate) rather than cash, but which will be taxable to
be invested, surrender and transfer requests, and other the same extent as a redemption for cash; the fund gen-
matters. Redemption orders are effected at the next net erally won’t make a redemption in kind unless your
asset value per share determined after a proper redemp- requests over a 90-day period total more than $250,000
tion order is placed by the insurance company. Contract or 1% of the value of the fund’s net assets, whichever
owners should look at their contract prospectuses for is less.
redemption procedures and fees. A purchase order from an insurance company separate
account may not be accepted if the sale of fund shares
IMPORT ANT INFO RM AT IO N ABO U T BUY ING has been suspended or if it is determined that the pur-
AND S ELLING SH A RE S chase would be detrimental to the interests of the fund.
After receiving a contract owner’s order, the insurance Market Timing Policies and Procedures. Short-term and
company buys or sells shares at the net asset value next excessive trading of fund shares may present risks to the
calculated on any day the fund is open for business. fund’s long-term shareholders (as used herein, the term
Unless otherwise instructed, the fund normally makes “shareholders” may refer to the contract owners), includ-
payment of the proceeds from the sale of shares the ing potential dilution in the value of fund shares,
next business day but always within seven calendar interference with the efficient management of a fund
days. (including losses on the sale of investments), realized gains
The fund does not issue share certificates. to remaining shareholders and increased brokerage and
The fund reserves the right to reject purchases of shares administrative costs. These risks may be more pronounced
for any reason. if the fund invests in certain securities such as those that
The fund reserves the right to withdraw or suspend the trade in foreign markets, are illiquid or do not otherwise
offering of shares at any time. ”
have “readily available market quotations. Certain inves-
The fund reserves the right to reject purchases of shares tors may seek to employ short-term trading strategies
or to suspend or postpone redemptions at times when aimed at exploiting variations in fund valuation that arise
the New York Stock Exchange is closed (other than cus- from the nature of the securities held by the fund (e.g.,
tomary closings), trading is restricted or when an “time zone arbitrage”). The fund has adopted policies and
emergency exists that prevents a fund from disposing procedures that are intended to detect and deter short-
of its portfolio securities or pricing its shares. term and excessive trading.
The fund may refuse, cancel or rescind any purchase Pursuant to these policies, the fund reserves the right to
order; freeze any account (meaning the insurance com- reject or cancel a purchase or exchange order for any rea-
pany will not be able to purchase shares in its account); son without prior notice. For example, the fund may in its
suspend account services; and/or involuntarily redeem discretion reject or cancel a purchase or an exchange order
the account if we think that the account is being used even if the transaction is not subject to the specific
for fraudulent or illegal purposes by the insurance com- roundtrip transaction limitation described below if the
pany; one or more of these actions will be taken when, Advisor believes that there appears to be a pattern of
at the sole discretion of the fund, they are deemed to be short-term or excessive trading activity by a shareholder or
in the fund’s best interests or when the fund is deems any other trading activity harmful or disruptive to
requested or compelled to do so by governmental the fund. The fund, through its Advisor and transfer agent,
authority or by applicable law. will measure short-term and excessive trading by the num-
ber of roundtrip transactions within a shareholder’s
account during a rolling 12-month period. A “roundtrip”
transaction is defined as any combination of purchase and
redemption activity (including exchanges) of the same
fund’s shares. The fund may take other trading activity into
Prospectus May 1, 2010 8 Investing in the Fund
account if the fund believes such activity is of an amount to effectively monitor, detect or limit short-term or exces-
or frequency that may be harmful to long-term sharehold- sive trading by underlying contract holders that occurs
ers or disruptive to portfolio management. through separate accounts maintained by insurance com-
Shareholders are limited to four roundtrip transactions in panies or other financial intermediaries. The Advisor
the same fund over a rolling 12-month period. Sharehold- reviews trading activity at the separate account level to
ers with four or more roundtrip transactions in the same detect short-term or excessive trading. If the Advisor has
fund within a rolling 12-month period generally will be reason to suspect that short-term or excessive trading
blocked from making additional purchases of, or exchanges is occurring at the separate account level, the Advisor will
into, that fund. The fund has sole discretion whether to contact the insurance company or other financial inter-
remove a block from a shareholder’s account. The rights of mediary to request underlying contract holder activity.
a shareholder to redeem shares of the fund are not Depending on the amount of fund shares held in such
affected by the four roundtrip transaction limitation. separate account (which may represent most of the fund’s
shares), short-term and/or excessive trading of fund
The Advisor may make exceptions to the roundtrip transac- shares could adversely affect long-term shareholders in
tion policy for certain types of transactions if in its opinion the fund. If short-term or excessive trading is identified,
the transactions do not represent short-term or exces- the Advisor will take appropriate action.
sive trading or are not abusive or harmful to the fund, such
as, but not limited to, systematic transactions, required The fund’s market timing policies and procedures may be
minimum retirement distributions, transactions initiated by modified or terminated at any time.
the fund or administrator and transactions by certain quali-
fied fund-of-fund(s). HOW TO RECEIVE ACCO UNT INFO RMA TI ON
In certain circumstances, the fund may rely upon the policy If you are a contract owner, you should contact your insur-
of the insurance company or other financial intermediary ance company or the organization that provides record
to deter short-term or excessive trading if the Advisor keeping services for information about your account.
believes that the policy of such insurance company or Please see the contract prospectus that accompanies this
other financial intermediary is reasonably designed to prospectus for the customer service phone number.
detect and deter transactions that are not in the best inter-
ests of the fund. An insurance company’s or other financial HOW TO SELECT SHARES
intermediary’s policy relating to short-term or excessive
Shares in the fund are available in connection with certain
trading may be more or less restrictive than the fund’s poli-
variable annuity and life insurance arrangements. Each
cies, may permit certain transactions not permitted by
insurance company has different provisions about how and
the fund’s policies, or prohibit transactions not subject to
when their contract owners may select fund shares. Each
the fund’s policies.
insurance company is responsible for communicating its
The Advisor may also accept undertakings from an insur- contract owners’ instructions to the fund. Contract owners
ance company or other financial intermediary to enforce should contact their insurance company to effect transac-
short-term or excessive trading policies on behalf of the tions in connection with the fund.
fund that provide a substantially similar level of protection
for the fund against such transactions. For example, cer- FIN AN CIAL IN TERMEDIARY SU PPO RT P AY-
tain insurance companies may have contractual or legal MEN TS
restrictions, or operational constraints, that prevent them
The Advisor, DWS Investments Distributors, Inc. (the “Dis-
from blocking an account. In such instances, the Advisor
tributor”) and/or their affiliates may pay additional
may permit the insurance company to use alternate tech-
compensation, out of their own assets and not as an addi-
niques that the Advisor considers to be a reasonable
tional charge to the fund, to selected affiliated and
substitute for such a block.
unaffiliated brokers, dealers, participating insurance com-
In addition, to the extent that the fund invests some por- panies or other financial intermediaries (“financial
tion of its assets in foreign securities, the fund has advisors”) in connection with the sale and/or distribution
adopted certain fair valuation practices intended to protect of fund shares or the retention and/or servicing of fund
the fund from “time zone arbitrage” with respect to its investors and fund shares (“revenue sharing”). Such rev-
foreign securities holdings and other trading practices that enue sharing payments are in addition to any distribution or
seek to exploit variations in fund valuation that arise from service fees payable under any Rule 12b-1 or service plan
the nature of the securities held by the fund. (See “How of the fund, any record keeping/sub-transfer agency/
the fund Calculates Share Price. )” networking fees payable by the fund (generally through
There is no assurance that these policies and procedures the Distributor or an affiliate) and/or the Distributor to cer-
will be effective in limiting short-term and excessive trad- tain financial advisors for performing such services and any
ing in all cases. For example, the Advisor may not be able sales charge, commissions, non-cash compensation
arrangements expressly permitted under applicable rules
Prospectus May 1, 2010 9 Investing in the Fund
of the Financial Industry Regulatory Authority or other con- the distribution of both DWS funds and non-DWS funds by
cessions described in the fee table or elsewhere in this financial advisors to retirement plans that obtain record
prospectus or the Statement of Additional Information as ,
keeping services from ADP Inc. or ExpertPlan Inc. on the
payable to all financial advisors. For example, the Advi- DWS Investments branded retirement plan platform (the
sor, the Distributor and/or their affiliates may compensate “Platform”) with the level of revenue sharing payments
financial advisors for providing the fund with “shelf space” being based upon sales of both the DWS funds and the
or access to a third party platform or fund offering list or non-DWS funds by the financial advisor on the Platform or
other marketing programs, including, without limitation, current assets of both the DWS funds and the non-DWS
inclusion of the fund on preferred or recommended sales funds serviced and maintained by the financial advisor
lists, mutual fund “supermarket” platforms and other for- on the Platform.
mal sales programs; granting the Distributor access to the It is likely that broker-dealers that execute portfolio transac-
financial advisor’s sales force; granting the Distributor tions for the fund will include firms that also sell shares
access to the financial advisor’s conferences and meet- of the DWS funds to their customers. However, the Advi-
ings; assistance in training and educating the financial sor will not consider sales of DWS fund shares as a factor
advisor’s personnel; and obtaining other forms of market- in the selection of broker-dealers to execute portfolio trans-
ing support. actions for the DWS funds. Accordingly, the Advisor has
The level of revenue sharing payments made to financial implemented policies and procedures reasonably designed
advisors may be a fixed fee or based upon one or more of to prevent its traders from considering sales of DWS fund
the following factors: gross sales, current assets and/or shares as a factor in the selection of broker-dealers to
number of accounts of the fund attributable to the financial execute portfolio transactions for the fund. In addition, the
advisor, the particular fund or fund type or other measures Advisor, the Distributor and/or their affiliates will not use
as agreed to by the Advisor, the Distributor and/or their fund brokerage to pay for their obligation to provide addi-
affiliates and the financial advisors or any combination tional compensation to financial advisors as described
thereof. The amount of these revenue sharing payments is above.
determined at the discretion of the Advisor, the Distribu-
tor and/or their affiliates from time to time, may be HOW THE FU N D CALCU LATES SHARE P RI C E
substantial, and may be different for different financial To calculate net asset value per share, or NAV, the fund
advisors based on, for example, the nature of the services uses the following equation:
provided by the financial advisor.
Total Total Total
÷ Shares Number of = NAV
The Advisor, the Distributor and/or their affiliates currently ( Assets − Liabilities ) Outstanding
make revenue sharing payments from their own assets
in connection with the sale and/or distribution of DWS The price at which you buy and sell shares for the fund is
fund shares or the retention and/or servicing of investors the NAV.
and DWS fund shares to financial advisors in amounts that We typically value securities using information fur-
generally range from 0.01% up to 0.26% of assets of the nished by an independent pricing service or market
fund serviced and maintained by the financial advisor, quotations, where appropriate. However, we may use
0.05% to 0.25% of sales of the fund attributable to the methods approved by the Board, such as a fair valuation
financial advisor, a flat fee of $4,000 up to $500,000, or any model, which are intended to reflect fair value when pric-
combination thereof. These amounts are subject to change ing service information or market quotations are not readily
at the discretion of the Advisor, the Distributor and/or their available or when a security’s value or a meaningful por-
affiliates. Receipt of, or the prospect of receiving, this addi- tion of the value of the fund’s portfolio is believed to have
tional compensation may influence your financial advisor’s been materially affected by a significant event, such as
recommendation of the fund or of any particular share a natural disaster, an economic event like a bankruptcy fil-
class of the fund. You should review your financial advi- ing, or a substantial fluctuation in domestic or foreign
sor’s compensation disclosure and/or talk to your financial markets that has occurred between the close of the
advisor to obtain more information on how this compen- exchange or market on which the security is principally
sation may have influenced your financial advisor’s traded (for example, a foreign exchange or market) and the
recommendation of the fund. Additional information close of the New York Stock Exchange. In such a case,
regarding these revenue sharing payments is included in the fund’s value for a security is likely to be different from
the fund’s Statement of Additional Information, which is the last quoted market price or pricing service information.
available to you on request at no charge (see the back In addition, due to the subjective and variable nature of
cover of this prospectus for more information on how to fair value pricing, it is possible that the value determined
request a copy of the Statement of Additional Information). for a particular asset may be materially different from the
The Advisor, the Distributor and/or their affiliates may also value realized upon such asset’s sale. It is expected that
make such revenue sharing payments to financial advi- the greater the percentage of fund assets that is invested
sors under the terms discussed above in connection with in non-US securities, the more extensive will be the fund’s
Prospectus May 1, 2010 10 Investing in the Fund
use of fair value pricing. This is intended to reduce the holders of such contracts and income from prior periods
fund’s exposure to “time zone arbitrage” and other harm- with respect to such contracts also could be taxable, most
ful trading practices. (See “Market timing policies and likely in the year of the failure.
procedures. )” Under Treasury regulations, insurance companies holding
To the extent that the fund invests in securities that are the separate accounts may have to report to the IRS losses
traded primarily in foreign markets, the value of its hold- above a certain amount resulting from a sale or disposi-
ings could change at a time when you aren’t able to buy or tion of a fund’s shares.
sell fund shares through the contract. This is because The discussion above is generally based on the assump-
some foreign markets are open on days and at times when tion that shares of a fund will be respected as owned by
the fund doesn’t price the shares. insurance company separate accounts. If this is not the
case (for example, because the IRS finds an impermissible
DISTRIBUTIONS level of “investor control” over the investment options
The fund intends to declare and distribute dividends from underlying variable contracts), the advantageous federal
its net investment income and capital gains, if any, annu- income tax treatment provided in respect of insurance com-
ally. The fund may make additional distributions if pany separate accounts under the Code will no longer be
necessary. available, and the person or persons determined to own
All distributions will be reinvested in shares of a fund the fund shares will be currently taxed on fund distribu-
unless we are informed by an insurance company that they tions, and on the proceeds of any redemption of fund
should be paid out in cash. The insurance companies will shares, under the Code.
be informed about the amount and character of distribu- Fund investments in securities of foreign issuers may be
tions from the relevant fund for federal income tax subject to withholding and other taxes at the source, includ-
purposes. ing on dividend or interest payments. Participating
insurance companies should consult their own tax advi-
TAXES sors as to whether such distributions are subject to federal
The fund intends to qualify each year as a regulated invest- income tax if they are retained as part of policy reserves.
ment company under Subchapter M of the Internal Certain of the fund’s investments in certain debt obliga-
Revenue Code of 1986, as amended (the “Code”), and tions may cause the fund to recognize taxable income in
intends to meet all requirements necessary to avoid pay- excess of the cash generated by such obligation. Thus, the
ing any federal income or excise taxes. fund could be required at times to liquidate other invest-
Generally, owners of variable annuity and variable life con- ments in order to satisfy its distribution requirements.
tracts are not subject to current federal income taxation The preceding is a brief summary of certain of the relevant
on income or gains realized with respect to such contracts. federal income tax considerations. Because each share-
However, some distributions from such contracts, whether holder and contract holder’s tax situation is unique, ask
made prior to or during the annuity payment period, may your tax professional about the tax consequences of your
be taxable at ordinary income tax rates. In addition, distri- investments, including possible federal, foreign, state or
butions made to an owner who is younger than 591⁄2 may local taxes.
be subject to a 10% penalty tax. For further information
concerning federal income tax consequences for the hold- MARKETIN G AN D DISTRIBU TIO N FEE S
ers of variable annuity contracts and variable life insurance
DWS Variable Series II has adopted a 12b-1 plan for the
policies, such holders should consult the prospectus used
fund’s Class B shares. Under the plan, DWS Variable Series
in connection with the issuance of their particular contracts
II may make quarterly payments to the distributor for dis-
or policies.
tribution and shareholder servicing related expenses
In order for investors to receive the favorable federal incurred or paid by the distributor or a participating insur-
income tax treatment available to holders of variable annu- ance company. No such payment shall be made with
ity and variable life contracts, the separate accounts respect to any quarterly period in excess of an amount
underlying such contracts, as well as the funds in which determined for such period at the annual rate of 0.25% of
such accounts invest, must meet certain diversification the average daily net assets of Class B shares during that
requirements. The fund intends to comply with these quarterly period. Depending on the participating insurance
requirements. If a fund or separate account does not meet company’s corporate structure and applicable state law,
such requirements or fails to qualify as a regulated invest- the distributor may remit payments to the participating
ment company for any taxable year, income allocable to insurance company’s affiliated broker-dealers or other affili-
the contracts associated with the separate account may be ated company rather than to the participating insurance
taxable currently for federal income tax purposes to the company itself.
Prospectus May 1, 2010 11 Investing in the Fund
Because 12b-1 fees for Class B shares are paid out of fund
assets on an ongoing basis, they will, over time, increase
the cost of investment in Class B shares and may cost
more than other types of sales charges.
Examples of expenses payable under the plan include the
costs of printing and mailing materials (such as fund pro-
spectuses, shareholder reports, fund advertisements and
sales literature), holding seminars and sales meetings, pro-
viding customer service to policyholders and sales
compensation.
Prospectus May 1, 2010 12 Investing in the Fund
FI NA N CI AL H IG H L IG H TS
The financial highlights are designed to help you under- fund’s financial statements, is included in the fund’s annual
stand recent financial performance. The figures in the first report (see “Shareholder reports” on the back cover). This
part of the table are for a single share. The total return information doesn’t reflect charges and fees associated
figures represent the percentage that an investor in the with the separate account that invests in the fund or any
fund would have earned (or lost), assuming all dividends variable life insurance policy or variable annuity contract for
and distributions were reinvested. This information has which the fund is an investment option. These charges
,
been audited by Ernst & Young LLP independent registered and fees will reduce returns.
public accounting firm, whose report, along with the
DWS Government & Agency Securities VIP — Class B
Years Ended December 31, 2009 2008 2007 2006 2005
Selected Per Share Data
Net asset value, beginning of period $12.37 $12.35 $12.25 $12.23 $12.52
Income (loss) from investment operations:
Net investment incomea .48 .52 .53 .50 .47
Net realized and unrealized gain (loss) .45 .03 .12 (.06) (.21)
Total from investment operations .93 .55 .65 .44 .26
Less distributions from:
Net investment income (.55) (.53) (.55) (.42) (.45)
Net realized gains — — — — (.10)
Total distributions (.55) (.53) (.55) (.42) (.55)
Net asset value, end of period $12.75 $12.37 $12.35 $12.25 $12.23
Total Return (%) 7.70 4.60b 5.43b 3.74 2.24
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions) 7 8 5 33 47
Ratio of expenses before expense reductions (%) .92 1.00 1.04 1.07 1.02
Ratio of expenses after expense reductions (%) .92 1.00 1.01 1.07 1.02
Ratio of net investment income (%) 3.81 4.24 4.39 4.16 3.78
Portfolio turnover rate (%) 390 543 465 241 191
a
Based on average shares outstanding during the period.
b
Total return would have been lower had certain expenses not been reduced.
Prospectus May 1, 2010 13 Financial Highlights
A P P E ND I X
HYPO THETICAL EX P E NSE SU M M A RY tractual fee waivers or expense reimbursements, if any, for
Using the annual fund operating expense ratios presented the period of the contractual commitment. Also, please
in the fee tables in the fund prospectus, the Hypotheti- note that if you are investing through a third party provider,
cal Expense Summary shows the estimated fees and that provider may have fees and expenses separate from
expenses, in actual dollars, that would be charged on a those of the fund that are not reflected here. Mutual fund
hypothetical investment of $10,000 in the fund held for the fees and expenses fluctuate over time and actual expenses
next 10 years and the impact of such fees and expenses may be higher or lower than those shown.
on fund returns for each year and cumulatively, assuming a The Hypothetical Expense Summary should not be used
5% return for each year. The historical rate of return for or construed as an offer to sell, a solicitation of an offer to
the fund may be higher or lower than 5% and, for money buy or a recommendation or endorsement of any spe-
market funds, is typically less than 5%. The tables also cific mutual fund. You should carefully review the fund’s
assume that all dividends and distributions are reinvested. prospectus to consider the investment objectives, risks,
The annual fund expense ratios shown are net of any con- expenses and charges of the fund prior to investing.
DWS Government & Agency Securities VIP — Class B
Maximum Initial Hypothetical Assumed Rate
Sales Charge: Investment: of Return:
0.00% $10,000 5%
Cumulative Cumulative Hypothetical
Return Before Return After Year-End Balance Annual
Fees and Annual Fund Fees and After Fees and Fees and
Year Expenses Expense Ratios Expenses Expenses Expenses
1 5.00% 0.92% 4.08% $10,408.00 $ 93.88
2 10.25% 0.92% 8.33% $10,832.65 $ 97.71
3 15.76% 0.92% 12.75% $11,274.62 $ 101.69
4 21.55% 0.92% 17.35% $11,734.62 $ 105.84
5 27.63% 0.92% 22.13% $12,213.40 $ 110.16
6 34.01% 0.92% 27.12% $12,711.70 $ 114.66
7 40.71% 0.92% 32.30% $13,230.34 $ 119.33
8 47.75% 0.92% 37.70% $13,770.14 $ 124.20
9 55.13% 0.92% 43.32% $14,331.96 $ 129.27
10 62.89% 0.92% 49.17% $14,916.70 $ 134.54
Total $1,131.28
ADDITIONAL IND E X INFORM A T ION
Barclays Capital GNMA Index is an unmanaged market value-weighted measure of all fixed-rate securities backed by
mortgage pools of the Government National Mortgage Association.
Prospectus May 1, 2010 14 Appendix
TO GET MORE IN FO RM A T ION You can also review and copy these documents and other
Shareholder reports. These include commentary from information about the fund, including the fund’s SAI, at
the fund’s management team about recent market condi- the SEC’s Public Reference Room in Washington, D.C. Infor-
tions and the effects of the fund’s strategies on its mation on the operation of the SEC’s Public Reference
performance. They also have detailed performance figures, Room may be obtained by calling (800) SEC-0330.
a list of everything the fund owns, and its financial state- CO NT ACT INFO RMATIO N
ments. Shareholders get these reports automatically.
DWS Investments 222 South Riverside Plaza
Statement of Additional Information (SAI). This tells you Chicago, IL 60606-5808
more about the fund’s features and policies, including addi- www.dws-investments.com
tional risk information. The SAI is incorporated by reference (800) 728-3337
into this document (meaning that it’s legally part of this SEC 100 F Street, N.E.
prospectus). Washington, D.C. 20549-0102
www.sec.gov
For a free copy of any of these documents or to request (800) SEC-0330
other information about the fund, contact DWS Invest- Distributor DWS Investments Distributors, Inc.
ments at the phone number or address listed below. SAIs 222 South Riverside Plaza
and shareholder reports are also available through the Chicago, IL 60606-5808
(800) 621-1148
DWS Investments Web site at www.dws-
investments.com. These documents and other information SEC File Number DWS Variable Series II
811-05002
about the fund are available from the EDGAR Database
on the SEC’s Internet site at www.sec.gov. If you like, you
may obtain copies of this information, after paying a copy-
ing fee, by e-mailing a request to publicinfo@sec.gov or by
writing the SEC at the address listed below.
(05/01/10) 2B-GAS
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