[Image] [Image]
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Application request
This combined prospectus sets forth concisely the information a
prospective investor should know before investing in the following
funds: Scudder Tax Free Money Fund; Scudder Limited Term Tax Free Fund
and Scudder Medium Term Tax Free Fund, each a series of Scudder Tax
Free Trust; Scudder Managed Municipal Bonds and Scudder High Yield Tax
Free Fund, each a series of Scudder Municipal Trust. All three Trusts
are open-end management investment companies. Please retain this
prospectus for future reference.
Shares of the Funds are not insured or guaranteed by the U.S.
Government. Scudder Tax Free Money Fund seeks to maintain a constant
net asset value of $1.00 per share but there can be no assurance that
the stable net asset value will be maintained.
If you require more detailed information, the Funds' Statement of
Additional Information dated May 1, 1996, as amended from time to
time, may be obtained without charge by writing Scudder Investor
Services, Inc., Two International Place, Boston, MA 02110-4103 or
calling 1-800-225-2470. The Statement, which is incorporated by
reference into this prospectus, has been filed with the Securities and
Exchange Commission.
The Securities and Exchange Commission maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information
regarding the Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS COMBINED
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Scudder Tax Free Money Fund
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
----------------------------------------------------------------------
May 1, 1996
As Revised August 1, 1996
----------------------------------------------------------------------
Prospectus
----------------------------------------------------------------------
Five pure no-load(tm) (no sales charges) mutual funds seeking tax-free
income through different investment objectives.
Expense information
How to compare a Scudder pure no-load(tm) fund
This information is designed to help you understand the
various costs and expenses of investing in Scudder Tax
Free Money Fund and Scudder Medium Term Tax Free Fund. By
reviewing this table and those in other mutual funds'
prospectuses, you can compare each Fund's fees and
expenses with those of other funds. With Scudder's pure
no-load(tm) funds, you pay no commissions to purchase or
redeem shares, or to exchange from one fund to another. As
a result, all of your investment goes to work for you.
1) Shareholder transaction expenses: Expenses charged
directly to your individual account in either Fund for
various transactions.
Scudder Tax Scudder Medium
Free Money Term Tax Free
Fund Fund
Sales commissions to NONE NONE
purchase shares (sales
load)
Commissions to reinvest NONE NONE
dividends
Redemption fees NONE * NONE *
Fees to exchange shares NONE NONE
2) Annual Fund operating expenses: Expenses paid by either
Fund before it distributes its net investment income,
expressed as a percentage of its average daily net assets
for the year ended December 31, 1995.
Investment management fees 0.40%*** 0.57%**
12b-1 fees NONE NONE
Other expenses 0.25% 0.15%
------ ------
Total Fund operating expenses 0.65%*** 0.72%**
==== ====
Example
Based on the levels of total Fund operating expenses listed above,
the total expenses relating to a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period, are listed
below. Investors do not pay these expenses directly; they are paid
by each Fund before it distributes its net investment income to
shareholders. (As noted above, the Funds have no redemption fees of
any kind.)
One year $ 7 $ 7
Three years 21 23
Five years 36 40
Ten years 81 90
See "Fund organization--Investment adviser" for further information
about the investment management fees. This example assumes
reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Fund operating expenses"
remain the same each year. This example should not be considered a
representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or
lower than those shown.
* You may redeem by writing or calling the Funds or by
Write-A-Check. If you wish to receive redemption proceeds via wire,
there is a $5 wire service fee. For additional information, please
refer to "Transaction information -- Redeeming shares."
** The Adviser waived a portion of its fee so that the Fund's total
operating expenses did not exceed 0.70% from January 1, 1995 to
October 31, 1995. The above table shows what the fees and expenses
would have been if the Adviser had not agreed to waive a portion of
its fee. Actual expenses charged for the year ended December 31,
1995, after waiver, equaled 0.70% of average daily net assets.
*** Until April 30, 1997, the Adviser has agreed to waive a portion
of its fee to the extent necessary so that the total annualized
expenses of the Fund do not exceed 0.65% of average daily net
assets. The above table shows what the fees and expenses would have
been if the Adviser had agreed to waive a portion of its fee for the
fiscal year ended December 31, 1995. Actual expenses charged for the
fiscal year ended December 31, 1995 were: investment management fee
0.50%, other expenses 0.25% and total operating expenses 0.75%. To
the extent that expenses fall below 0.65% during the fiscal year,
the Adviser reserves the right to recoup, during the fiscal year
incurred, amounts waived during the period, but only to the extent
that the Fund's expenses do not exceed 0.65%.
Profile|Application Request
Expense information
How to compare a Scudder pure no-load(tm) fund
This information is designed to help you understand the various
costs and expenses of investing in Scudder Managed Municipal Bonds
and Scudder High Yield Tax Free Fund. By reviewing this table and
those in other mutual funds' prospectuses, you can compare each
Fund's fees and expenses with those of other funds. With Scudder's
pure no-load(tm) funds, you pay no commissions to purchase or redeem
shares, or to exchange from one fund to another. As a result, all of
your investment goes to work for you.
1) Shareholder transaction expenses: Expenses charged directly to
your individual account in either Fund for various transactions.
Scudder Managed Scudder High
Municipal Bonds Yield Tax Free
Fund
Sales commissions to NONE NONE
purchase shares (sales
load)
Commissions to reinvest NONE NONE
dividends
Redemption fees NONE * NONE *
Fees to exchange shares NONE NONE
2) Annual Fund operating expenses: Expenses paid by either Fund
before it distributes its net investment income, expressed as a
percentage of its average daily net assets for the year ended
December 31, 1995.
Investment management fees 0.51% 0.68% **
12b-1 fees NONE NONE
Other expenses 0.12% 0.26%
------ ------
Total Fund operating 0.63% 0.94% **
expenses ==== ====
Example
Based on the levels of total Fund operating expenses listed above,
the total expenses relating to a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period, are listed
below. Investors do not pay these expenses directly; they are paid
by each Fund before it distributes its net investment income to
shareholders. (As noted above, the Funds have no redemption fees of
any kind.)
One year $ 6 $ 10
Three years 20 30
Five years 35 52
Ten years 79 115
See "Fund organization -- Investment adviser" for further
information about the investment management fees. This example
assumes reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Fund operating expenses"
remain the same each year. This example should not be considered a
representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or
lower than those shown.
* You may redeem by writing or calling the Funds. If you wish to
receive redemption proceeds via wire, there is a $5 wire service
fee. For additional information, please refer to "Transaction
information -- Redeeming shares."
** The Adviser waived a portion of its fee so that the Fund's total
operating expenses did not exceed 0.80% from January 1, 1995 to
April 30, 1996. The above table shows what the fees and expenses
would have been if the Adviser had not agreed to waive a portion of
its fee. Actual expenses charged for the year ended December 31,
1995, after waiver, equaled 0.80% of average daily net assets.
Expense information
How to compare a Scudder pure no-load(tm) fund
This information is designed to help you understand the various
costs and expenses of investing in Scudder Limited Term Tax Free
Fund (the "Fund"). By reviewing this table and those in other mutual
funds' prospectuses, you can compare the Fund's fees and expenses
with those of other funds. With Scudder's pure no-load(tm) funds,
you pay no commissions to purchase or redeem shares, or to exchange
from one fund to another. As a result, all of your investment goes
to work for you.
1) Shareholder transaction expenses: Expenses charged directly to
your individual account in the Fund for various transactions.
Scudder Limited Term Tax
Free Fund
Sales commissions to purchase shares NONE
(sales load)
Commissions to reinvest dividends NONE
Redemption fees NONE *
Fees to exchange shares NONE
2) Annual Fund operating expenses: Expenses paid by the Fund before
it distributes its net investment income, expressed as a percentage
of the Fund's average daily net assets for the fiscal year ended
October 31, 1995.
Investment management fee (after 0.50% **
waiver)
12b-1 fees NONE
Other expenses (after reimbursement) 0.25% **
------
Total Fund operating expenses 0.75% **
====
Example
Based on the level of Fund operating expenses listed above, the
total expenses relating to a $1,000 investment, assuming a 5% annual
return and redemption at the end of each period, are listed below.
Investors do not pay these expenses directly; they are paid by the
Fund before it distributes its net investment income to
shareholders. (As noted above, the Fund has no redemption fees of
any kind.)
1 Year 3 Years 5 Years 10 Years
$8 $24 $42 $93
See "Fund organization -- Investment adviser" for further
information about the investment management fee. This example
assumes reinvest ment of all dividends and distributions and that
the percentage amounts listed under "Annual Fund operating expenses"
remain the same each year. This example should not be considered a
representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or
lower than those shown.
* You may redeem by writing or calling the Fund or by Write-A-Check.
If you wish to receive your redemption proceeds via wire, there is a
$5 wire service fee. For additional information, please refer to
"Transaction information -- Redeeming shares."
** Until December 31, 1996, the Adviser has agreed to reimburse Fund
operating expenses and waive a portion of its fee to the extent
necessary so that the total annualized expenses of the Fund do not
exceed 0.75% of average daily net assets. If the Adviser had not
agreed to reimburse operating expenses and waive a portion of its
fee so that the total annualized expenses of the Fund did not exceed
0% for the period November 1, 1994 to February 28, 1995, 0.25% for
the period March 1, 1995 to August 31, 1995, and 0.50% for the
period September 1, 1995 to April 30, 1996, Fund expenses would have
been: investment management fee 0.60%, other expenses 0.25% and
total operating expenses 0.85% for the fiscal year ended October 31,
1995. To the extent that expenses fall below 0.75% during the fiscal
year, the Adviser reserves the right to recoup, during the fiscal
year incurred, amounts reimbursed or waived during the period, but
only to the extent that the Fund's expenses do not exceed 0.75%.
Financial highlights
Scudder Tax Free Money Fund
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from
the audited financial statements.
If you would like more detailed information concerning the Fund's
performance, a complete portfolio listing and audited financial
statements are available in the Fund's Annual Report dated December
31, 1995 and may be obtained without charge by writing or calling
Scudder Investor Services, Inc.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period .......... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income ......... .032 .022 .018 .025 .041 .053 .057 .046 .040 .041
Less distributions
from net investment
income ...................... (.032) (.022) (.018) (.025) (.041) (.053) (.057) (.046) (.040) (.041)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period ............... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) .............. 3.27 2.26 1.86 2.54 4.20 5.44 5.83 4.73 4.03 4.19
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end of
period ($ millions) ......... 239 257 222 267 279 303 279 358 390 383
Ratio of operating
expenses to
average daily
net assets (%) .............. .75 .77 .75 .73 .70 .72 .70 .67 .66 .63
Ratio of net investment
income to average daily
net assets (%) .............. 3.21 2.24 1.84 2.53 4.12 5.30 5.67 4.61 4.03 4.01
</TABLE>
Financial highlights
Scudder Medium Term Tax Free Fund
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from
the audited financial statements.
If you would like more detailed information concerning the Fund's
performance, a complete portfolio listing and audited financial
statements are available in the Fund's Annual Report dated December
31, 1995 and may be obtained without charge by writing or calling
Scudder Investor Services, Inc.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.......................... $10.39 $11.36 $10.86 $10.62 $10.11 $10.04 $10.02 $10.07 $10.34 $10.03
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (a) ......... .54 .53 .60 .65 .67 .54 .56 .54 .54 .62
Net realized and
unrealized gain (loss)
on investments.................... .92 (.92) .56 .27 .52 .07 .02 (.05) (.22) .41
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations..... 1.46 (.39) 1.16 .92 1.19 .61 .58 .49 .32 1.03
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions from:
From net investment income......... (.54) (.53) (.60) (.65) (.67) (.54) (.56) (.54) (.54) (.62)
From net realized
gains on investments.............. (.05) (.05) (.06) (.03) (.01) -- -- -- (.05) (.10)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions................ (.59) (.58) (.66) (.68) (.68) (.54) (.56) (.54) (.59) (.72)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period..... $11.26 $10.39 $11.36 $10.86 $10.62 $10.11 $10.04 $10.02 $10.07 $10.34
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) (b)................. 14.32 (3.50) 10.94 8.93 12.13 6.29 6.00 4.92 3.23 10.54
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
($ millions)....................... 712 701 1,017 661 268 27 54 99 125 104
Ratio of operating expenses
net, to average daily net
assets (%) (a)..................... .70 .63 .14 -- -- .97 .91 .79 .80 .82
Ratio of net investment income
to average net assets (%).......... 4.92 4.94 5.35 6.07 6.44 5.37 5.62 5.05 5.37 6.00
Portfolio turnover rate (%).......... 36.1 33.8 37.3 22.4 14.0 116.9 15.7 31.2 32.6 44.3
(a) Portion of expenses
reimbursed by
the Adviser.................... $ -- $ -- $ .005 $ .014 $ .020 $ .001 $ -- $ -- $ -- $ --
Management fee and
other fees not imposed......... $ .003 $ .01 $ .063 $ .064 $ .062 $ .002 $ -- $ -- $ -- $ --
Annualized ratio of operating expenses, including expenses reimbursed,
management fee and other expenses not imposed, to average daily net assets
aggregated 0.72%, 0.71%, 0.75%, 0.80%, 0.88% and 1.00% for the years ended
December 31, 1995, 1994, 1993, 1992, 1991 and 1990, respectively.
(b) Total returns may have been higher due to maintenance of the Fund's
expenses. On November 1, 1990, the Fund adopted its present name and
objective. Prior to that date, the Fund was known as the 1990 Portfolio
of the Scudder Tax Free Target Fund and its objective was to provide high
tax-free income and current liquidity. Financial information for each of
the five years in the period ended December 31, 1990 should not be
considered representative of the present Fund.
</TABLE>
Financial highlights
Scudder Managed Municipal Bonds
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from
the audited financial statements.
If you would like more detailed information concerning the Fund's
performance, a complete portfolio listing and audited financial
statements are available in the Fund's Annual Report dated December
31, 1995 and may be obtained without charge by writing or calling
Scudder Investor Services, Inc.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period .......................... $8.07 $9.09 $8.72 $8.80 $8.45 $8.54 $8.60 $8.24 $8.93 $8.40
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Income from
investment
operations:
Net investment
income .......................... .48 .46 .47 .51 .53 .55 .59 .60 .61 .61
Net realized
and unrealized
gain (loss) on
investment
transactions .................... .87 (1.00) .66 .25 .47 -- .33 .38 (.58) .77
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total from
investment
operations ....................... 1.35 (.54) 1.13 .76 1.00 .55 .92 .98 .03 1.38
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Less distributions:
From net
investment
income .......................... (.48) (.46) (.47) (.51) (.53) (.55) (.59) (.60) (.61) (.61)
From net realized
gains on
investment
transactions .................... -- -- (.29) (.33) (.12) (.09) (.39) (.02) (.11) (.24)
In excess of net
realized gains .................. -- (.02) -- -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions .............. (.48) (.48) (.76) (.84) (.65) (.64) (.98) (.62) (.72) (.85)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value,
end of period .................... $8.94 $8.07 $9.09 $8.72 $8.80 $8.45 $8.54 $8.60 $8.24 $8.93
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN (%) .................. 17.12 (6.04) 13.32 8.98 12.23 6.77 11.19 12.27 .34 16.84
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end of
period ($ millions) .............. 775 709 910 830 796 719 691 635 592 663
Ratio of operating
expenses to average
daily net assets (%) ............. .63 .63 .63 .63 .64 .61 .62 .61 .63 .58
Ratio of net investment
income to average
daily net assets (%) ............. 5.59 5.41 5.21 5.76 6.16 6.61 6.78 7.13 7.20 6.88
Portfolio turnover
rate (%) ......................... 17.8 33.7 52.8 59.6 32.4 72.1 89.8 75.5 73.5 78.0
</TABLE>
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Financial highlights
Scudder High Yield Tax Free Fund
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from
the audited financial statements.
If you would like more detailed information concerning the Fund's
performance, a complete portfolio listing and audited financial
statements are available in the Fund's Annual Report dated December
31, 1995 and may be obtained without charge by writing or calling
Scudder Investor Services, Inc.
<TABLE>
<CAPTION>
JANUARY 22, 1987
(COMMENCEMENT
YEARS ENDED DECEMBER 31, OF OPERATIONS) TO
--------------------------------------------------------------------- DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ........................... $10.86 $12.55 $11.90 $11.67 $11.19 $11.35 $11.06 $10.52 $12.00
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income (a) ........... .68 .70 .67 .72 .76 .77 .76 .83 .78
Net realized and unrealized
gain (loss) on investments ......... 1.37 (1.73) .93 .50 .69 (.11) .35 .54 (1.48)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations .......................... 2.05 (1.03) 1.60 1.22 1.45 .66 1.11 1.37 (.70)
------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
From net investment income .......... (.72) (.66) (.67) (.72) (.76) (.77) (.76) (.83) (.78)
From net realized gains on
investment transactions ............ -- -- (.21) (.27) (.21) (.05) (.06) -- --
In excess of net realized gains
on investment transactions ......... -- -- (.07) -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions .................. (.72) (.66) (.95) (.99) (.97) (.82) (.82) (.83) (.78)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ....... $12.19 $10.86 $12.55 $11.90 $11.67 $11.19 $11.35 $11.06 $10.52
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) ..................... 19.28 (8.38) 13.85 10.88 13.36 6.02 10.32 13.48 (5.81)**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of
period ($ millions) ................. 304 260 317 204 160 129 114 74 36
Ratio of operating expenses net,
to average daily net assets
(%) (a) ............................. .80 .80 .92 .98 1.00 1.00 1.00 .67 .40*
Ratio of net investment income
to average daily net assets (%) ..... 5.77 6.01 5.38 6.10 6.65 6.88 6.72 7.65 8.45*
Portfolio turnover rate (%) .......... 27.3 34.3 56.4 56.6 45.5 33.4 75.8 36.7 131.8*
(a) Reflects a per share amount
of expenses, exclusive of
management fees,
reimbursed by the
Adviser of ...................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ .010 $ .066
Reflects a per share amount
of management fee not
imposed by the Adviser of ....... $ .02 $ .02 $ .01 $ -- $ -- $ .01 $ .01 $ .05 $ .06
Operating expense ratio
before expense
reductions (%) .................. .94 .97 .98 .99 1.04 1.09 1.15 1.25 1.80*
* Annualized
** Not annualized
</TABLE>
Financial highlights
Scudder Limited Term Tax Free Fund
The following table includes selected data for a share outstanding
throughout the period and other performance information derived from
the audited financial statements.
If you would like more detailed information concerning the Fund's
performance, a complete portfolio listing and audited financial
statements are available in the Fund's Annual Report dated October 31,
1995 and may be obtained without charge by writing or calling Scudder
Investor Services, Inc.
<TABLE>
<CAPTION>
For the Period
February 15, 1994
Year Ended (commencement
October 31, of operations) to
1995 October 31, 1994
----------- ------------------
<S> <C> <C>
Net asset value, beginning of period.................................. $ 11.67 $ 12.00
-------- ---------
Income from investment operations:
Net investment income (a)........................................... .56 .38
Net realized and unrealized gain (loss) on investments.............. .34 (.33)
-------- --------
Total from investment operations...................................... .90 .05
-------- --------
Less distributions from net investment income......................... (.56) (.38)
-------- --------
Net asset value, end of period........................................ $ 12.01 $ 11.67
======== ========
TOTAL RETURN (%) (b).................................................. 7.94 .44**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions)................................ 122 68
Ratio of operating expenses, net to average daily net assets (%) (a).. .23 --
Ratio of net investment income to average daily net assets (%)........ 4.78 4.84*
Portfolio turnover rate (%)........................................... 37.5 36.3*
(a) Reflects a per share amount of expenses, exclusive of
management fees, reimbursed by the Adviser of................. $ .01 $ .04
Reflects a per share amount of management fee and other
fees not imposed by the Adviser of............................ $ .07 $ .06
Operating expense ratio including expenses
reimbursed, management fee and other expenses
not imposed (%)............................................... .85 1.29*
(b) Total returns are higher due to maintenance of the Fund's expenses.
</TABLE>
* Annualized
* * Not annualized
Profile|Application Request
A message from Scudder's chairman
[Image] Scudder, Stevens & Clark, Inc., investment adviser to the
Scudder Family of Funds, was founded in 1919. We offered
America's first no-load mutual fund in 1928. Today, we manage in
excess of $100 billion for many private accounts and over 50 mutual
fund portfolios. We manage the mutual funds in a special program for
the American Association of Retired Persons, as well as the fund
options available through Scudder Horizon Plan, a tax-advantaged
variable annuity. We also advise The Japan Fund and nine closed-end
funds that invest in countries around the world.
The Scudder Family of Funds is designed to make investing easy and
less costly. It includes money market, tax free, income and growth
funds as well as IRAs, 401(k)s, Keoghs and other retirement plans.
Services available to all shareholders include toll-free access to the
professional service representatives of Scudder Investor Relations,
easy exchange among funds, shareholder reports, informative
newsletters and the walk-in convenience of Scudder Funds Centers.
All Scudder mutual funds are pure no-load(tm). This means you pay no
commissions to purchase or redeem your shares or to exchange from one
fund to another. There are no "12b-1" fees either, which many other
funds now charge to support their marketing efforts. All of your
investment goes to work for you. We look forward to welcoming you as a
shareholder.
Scudder tax free funds
Five pure no-load(tm) (no sales charges) mutual funds seeking tax-free
income through different investment objectives:
o Scudder Tax Free Money Fund
o Scudder Limited Term Tax Free Fund
o Scudder Medium Term Tax Free Fund
o Scudder Managed Municipal Bonds
o Scudder High Yield Tax Free Fund
Contents
Investment characteristics
Scudder Tax Free Money Fund
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Selecting among the Funds
Additional information about policies and investments
Distribution and performance information
Summary of important features
Fund organization
Purchases
Exchanges and redemptions
Transaction information
Shareholder benefits
Trustees and Officers
Investment products and services
How to contact Scudder
Investment characteristics
Scudder Tax Free Money Fund, Scudder Limited Term Tax Free Fund,
Scudder Medium Term Tax Free Fund, Scudder Managed Municipal Bonds and
Scudder High Yield Tax Free Fund (the "Funds") are tax-free income
funds advised by Scudder, Stevens & Clark, Inc. (the "Adviser"). The
five Funds' prospectuses are presented together so you can understand
their important differences and decide which Fund or combination of
Funds is most suitable for your investment needs.
Tax-free income
The five Funds have different investment objectives and
characteristics, yet they all seek to provide income that is, in the
opinion of bond counsel, free from regular federal income tax, by
investing in municipal securities. Municipal securities include notes
and bonds issued by states, cities and towns to raise revenue for
various public purposes.
Depending on your tax bracket, your return from these Funds may be
substantially higher than the after-tax return you would earn from
comparable taxable investments. The chart below shows what an investor
would have to earn from a comparable taxable investment to equal the
tax-free yield provided by the Funds for the period ended December 31,
1995.
Maturity of investments
A significant difference among these five Scudder tax-free funds is
the average maturity of their investments.
Scudder Tax Free Money Fund invests primarily in short-term municipal
notes and maintains a dollar-weighted average portfolio maturity of 90
days or less. Scudder Limited Term Tax Free Fund invests primarily in
shorter-term, high-grade municipal debt securities and maintains a
dollar-weighted average effective maturity of between one and five
years. Scudder Medium Term Tax Free Fund invests primarily in
high-grade intermediate-term municipal bonds (i.e., average effective
maturity of between five and 10 years). Scudder Managed Municipal
Bonds and Scudder High Yield Tax Free Fund each have flexible
investment policies regarding maturity, but both normally invest in
long-term municipal securities (i.e., more than 10 years). The yield
and the potential for price fluctuation are generally greater, the
longer the maturity of the municipal security.
TAX-FREE YIELDS and CORRESPONDING TAXABLE EQUIVALENTS
Tax-Free Taxable Equivalent Yield**
Yield for
the
30-day
period
ended
39.6%
December 28% Tax 31% Tax 36% Tax Tax
31, 1995 Bracket Bracket Bracket Bracket
---------- --------- --------- --------- ---------
Scudder Tax
Free Money
Fund* 4.01% 5.57% 5.81% 6.27% 6.64%
Scudder
Limited
Term Tax
Free Fund 4.03% 5.60% 5.84% 6.30% 6.67%
Scudder
Medium Term
Tax Free
Fund 4.22% 5.86% 6.12% 6.59% 6.99%
Scudder
Managed
Municipal
Bonds 4.71% 6.54% 6.83% 7.36% 7.80%
Scudder
High Yield
Tax Free
Fund 5.47% 7.60% 7.93% 8.55% 9.06%
* The tax-free yield for Scudder Tax Free Money Fund is for the
seven-day period ended December 31, 1995.
** Based on federal income tax rates in effect for the 1996 taxable
year.
The yield levels of tax-free and taxable investments continuously
change. Before investing in a Scudder tax-free fund, you may want to
compare its yield to the after-tax yield of an investment paying
taxable income.
For up-to-date yield information on these Scudder tax-free funds,
shareholders can call SAIL, Scudder Automated Information Line,
toll-free, at any time: 1-800-343-2890.
Scudder Managed Municipal Bonds and Scudder High Yield Tax Free Fund
have historically had the highest yields of the five Funds since these
Funds usually have the longest average maturities. Scudder Tax Free
Money Fund, which seeks to maintain a share price of $1.00 and invests
in shorter-term securities, offers the greatest capital protection of
these five Funds.
Scudder Limited Term Tax Free Fund, Scudder Medium Term Tax Free Fund,
Scudder Managed Municipal Bonds and Scudder High Yield Tax Free Fund
are designed to offer, on average, more income than Scudder Tax Free
Money Fund. Scudder Limited Term Tax Free Fund and Scudder Medium Term
Tax Free Fund offer greater price stability but lower yield potential
than Scudder Managed Municipal Bonds and Scudder High Yield Tax Free
Fund. This price stability reduces the impact of interest rate changes
on the Fund's share price, but does not eliminate credit risk.
Other factors in addition to maturity affect the yield and price
fluctuation of each Fund, including the absolute level of interest
rates, the relationship among short-, medium- and long-term interest
rates, the quality of the Fund's investments and the Fund's expenses.
The share prices of Scudder Limited Term Tax Free Fund, Scudder Medium
Term Tax Free Fund, Scudder Managed Municipal Bonds and Scudder High
Yield Tax Free Fund tend to rise as interest rates decline and decline
as interest rates rise.
Except as otherwise indicated, each Fund's investment objectives and
policies are not fundamental and may be changed without a vote of
shareholders. Shareholders will receive written notice of any changes
in a Fund's objective. If there is a change in investment objective,
shareholders should consider whether that Fund remains an appropriate
investment in light of their then current financial position and
needs. There can be no assurance that each Fund's objectives will be
met.
Scudder Tax Free Money Fund
Investment objectives and policies
Scudder Tax Free Money Fund, a diversified open-end management
investment company, seeks to provide income exempt from regular
federal income tax and stability of principal through investments in
municipal securities. All of the Fund's investments are high quality,
have a remaining maturity of 397 calendar days or less and have
minimal credit risk as determined by the Adviser. The dollar-weighted
average maturity of the Fund's portfolio is 90 days or less.
The Fund seeks to maintain a constant net asset value of $1.00 per
share, although in extreme circumstances this may not be possible. A
small portion of the income may be subject to regular federal,
alternative minimum, state and local income taxes.
Investments
All of the Fund's municipal securities must meet certain quality
criteria at the time of purchase. Generally, the Fund may purchase
only securities which are rated, or issued by an issuer rated, within
the two highest quality rating categories of two or more of the
following rating agencies: Moody's Investors Service, Inc. ("Moody's")
(Aaa and Aa, MIG 1 and MIG 2, and P1), Standard & Poor's ("S&P") (AAA
and AA, SP1+ and SP1, A1+ and A1) and Fitch Investors Service, Inc.
("Fitch") (AAA and AA, F1 and F2). Where only one rating agency has
rated a security (or its issuer), the Fund generally may purchase that
security as long as the rating falls within the categories described
above. Where a security (or its issuer) is unrated, the Fund may
purchase that security if, in the judgment of the Adviser, it is
comparable in quality to securities described above. All of the
securities in which the Fund may invest are dollar-denominated and
must meet credit standards applied by the Adviser pursuant to
procedures established by the Trustees. Should an issue of municipal
securities cease to be rated or if its rating is reduced below the
minimum required for purchase by the Fund, the Adviser will dispose of
any such security unless the Trustees of the Fund determine that such
disposal would not be in the best interests of the Fund.
Municipal securities in which the Fund may invest include municipal
notes, short-term municipal bonds, variable rate demand instruments
and tax-exempt commercial paper. Municipal notes are generally used to
provide for short-term capital needs and generally have maturities of
one year or less. Examples include tax anticipation and revenue
anticipation notes, which are generally issued in anticipation of
various seasonal revenues, bond anticipation notes, and construction
loan notes. Short-term municipal bonds may include general obligation
bonds, which are secured by the issuer's pledge of its faith, credit
and taxing power for payment of principal and interest, and revenue
bonds, which are generally paid from the revenues of a particular
facility or a specific excise tax or other source. Examples of taxable
investments in which the Fund may invest include obligations of
corporate issuers, U.S. Treasury obligations, U.S. Government
obligations, money market instruments and repurchase agreements.
The Fund may invest more than 25% of its assets in industrial
development or other private activity bonds, subject to the Fund's
fundamental investment policies, and also subject to the Fund's
current intention not to invest in municipal securities whose
investment income is taxable or subject to the alternative minimum tax
("AMT" bonds). For purposes of the Fund's investment limitation
regarding concentration of investments in any one industry, industrial
development or other private activity bonds ultimately payable by
companies within the same industry will be considered as if they were
issued by issuers in the same industry.
It is a fundamental policy, which may not be changed without a vote of
shareholders, that at least 80% of the Fund's assets will normally be
invested in short-term municipal securities.
Under normal market conditions the Fund expects to invest 100% of its
portfolio securities in municipal securities. The Fund may, on a
temporary basis, hold and invest up to 20% of its assets in cash and
cash equivalents and in temporary investments of taxable securities
with remaining maturities of 397 calendar days or less. For temporary
defensive purposes the Fund may invest more than 20% in such
investments. In 1995, all of the Fund's dividends were 100% federally
tax-exempt. The Fund may also invest in stand-by commitments and other
puts, repurchase agreements, reverse repurchase agreements,
participation interests and when-issued or forward delivery
securities. See "Additional information about policies and
investments" for more information about these investment techniques.
Scudder Limited Term Tax Free Fund
Investment objectives and policies
Scudder Limited Term Tax Free Fund, a diversified series of Scudder
Tax Free Trust, seeks to provide as high a level of income exempt from
regular federal income tax as is consistent with a high degree of
principal stability. In pursuing this goal, the Fund maintains a
diversified portfolio of shorter-term, high-grade municipal debt
securities with a dollar-weighted average effective maturity of
between one and five years. Within this limitation, the Fund may not
purchase individual securities with effective maturities greater than
10 years at the time of purchase or issuance, whichever is later. To
the extent the Fund invests in higher-grade securities, it will be
unable to avail itself of opportunities for higher income which may be
available with lower-grade investments.
The Fund's price and yield can fluctuate daily in response to changing
bond market conditions.
Investments
The Fund invests in municipal securities that are debt obligations
issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia and their subdivisions,
agencies and instrumentalities, the interest on which is, in the
opinion of bond counsel, exempt from regular federal income tax. These
securities include municipal notes, which are generally used to
provide short-term capital needs and have maturities of one year or
less. Municipal notes include tax anticipation notes, revenue
anticipation notes, bond anticipation notes and construction loan
notes.
The Fund may also invest in municipal bonds, which meet longer-term
capital needs and generally have maturities of more than one year when
issued. Municipal bonds include general obligation bonds which are
secured by the issuer's pledge of its faith, credit and taxing power
for payment of principal and interest, revenue bonds, industrial
development and other private activity bonds.
The Fund purchases securities that it believes are attractive and
competitive values in terms of quality, yield and the relationship of
current price to maturity value. However, recognizing the dynamics of
municipal obligation prices in response to changes in general economic
conditions, fiscal and monetary policies, interest rate levels and
market forces such as supply and demand for various issues, the
Adviser, subject to the Trustees' supervision, performs credit
analysis and manages the Fund's portfolio continuously, attempting to
take advantage of opportunities to improve total return, which is a
combination of income and principal performance over the long term.
For federal income tax purposes, the income earned from municipal
securities may be entirely tax-free, taxable or subject to only the
alternative minimum tax. However, the Fund has no current intention of
investing in municipal securities whose interest income is taxable or
AMT bonds.
Normally at least 80% of the Fund's net assets are invested in
municipal securities which are rated within the three highest quality
rating categories of Moody's (Aaa, Aa and A), S&P or Fitch (AAA, AA
and A) or their equivalents, or if unrated, judged by the Adviser to
be of comparable quality, at the time of purchase. The Fund may invest
in a debt security so rated by one rating agency although the security
may be rated lower by one or more of the other agencies. However, the
Fund will not invest in any debt security rated lower than Baa by
Moody's, BBB by S&P or Fitch or of equivalent quality as determined by
the Adviser.
Securities must also meet credit standards applied by the Adviser.
Should the rating of a portfolio security be downgraded after being
purchased by the Fund, the Adviser will determine whether it is in the
best interest of the Fund to retain or dispose of the security.
It is a fundamental policy, which may not be changed without a vote of
shareholders, that at least 80% of the Fund's total assets will
normally be invested in municipal securities and, under normal market
conditions, the Fund expects to invest 100% of its portfolio
securities in municipal securities. However, if defensive
considerations or an unusual disparity between after-tax income on
taxable and municipal securities makes it advisable, up to 20% of the
Fund's assets may be held in cash or invested in short-term taxable
investments, including U.S. Government obligations and money market
instruments. The Fund may temporarily invest more than 20% of its
assets in taxable securities during periods which, in the Adviser's
opinion, require a defensive position. A portion of the Fund's income
may be subject to regular federal, state and local income taxes.
The Fund may also invest in third party puts, municipal lease
obligations, variable rate demand instruments and when-issued or
forward delivery securities, may purchase warrants to purchase debt
securities, and may also engage in strategic transactions. See
"Additional information about policies and investments" for more
information about these investment techniques.
Scudder Medium Term Tax Free Fund
Investment objectives and policies
Scudder Medium Term Tax Free Fund, a diversified series of Scudder Tax
Free Trust, seeks to provide a high level of income free from regular
federal income taxes and to limit principal fluctuation. The Fund is
designed for investors seeking a higher level of federally tax-free
income than normally provided by tax-free money market or other
short-term investments, and more price stability than investments in
long-term municipal bonds.
The Fund will invest primarily in high-grade, intermediate-term
municipal bonds. The dollar-weighted average effective maturity of the
Fund's portfolio will range between five and 10 years. Within this
limitation, the Fund may not purchase individual securities with
effective maturities greater than 15 years. To the extent the Fund
invests in high-grade securities, it will be unable to avail itself of
opportunities for higher income which may be available with
lower-grade investments.
Investments
The municipal securities in which the Fund may invest are debt
obligations issued by or on behalf of states, territories and
possessions of the United States, the District of Columbia and their
subdivisions, agencies and instrumentalities, the interest on which is
exempt from federal income tax. Such municipal securities include
municipal notes, which are generally used to provide short-term
capital needs and have maturities of one year or less. Municipal notes
include tax anticipation notes, revenue anticipation notes, bond
anticipation notes and construction loan notes.
The Fund may also invest in municipal bonds, which meet longer-term
capital needs and generally have maturities of more than one year when
issued. Municipal bonds include general obligation bonds which are
secured by the issuer's pledge of its faith, credit and taxing power
for payment of principal and interest, revenue bonds, prerefunded
bonds, industrial development and other private activity bonds. The
Fund may also invest in variable rate demand instruments.
The Fund may invest more than 25% of its assets in industrial
development or other private activity bonds, subject to the Fund's
fundamental investment policies, and also subject to the Fund's
current intention not to invest in municipal securities whose
investment income is taxable or AMT bonds. For purposes of the Fund's
investment limitation regarding concentration of investments in any
one industry, industrial development or other private activity bonds
ultimately payable by companies within the same industry will be
considered as if they were issued by issuers in the same industry.
Normally at least 80% of the Fund's net assets are invested in
municipal bonds which are rated within the three highest quality
rating categories of Moody's (Aaa, Aa and A), S&P or Fitch (AAA, AA
and A) or their equivalents, or if unrated, judged by the Adviser to
be of comparable quality, at the time of purchase. The Fund will not
invest in any debt security rated lower than Baa by Moody's, BBB by
S&P or Fitch or of equivalent quality as determined by the Adviser.
The Fund may invest in a debt security so rated by one rating agency
although the security may be rated lower by one or more of the other
agencies. Securities must also meet credit standards applied by the
Adviser. Should the rating of a portfolio security be downgraded, the
Adviser will determine whether it is in the best interest of the Fund
to retain or dispose of the security.
At least 80% of the Fund's total assets will normally be invested in
municipal bonds and, under normal market conditions, the Fund expects
to invest 100% of its portfolio securities in municipal securities.
However, if defensive considerations or an unusual disparity between
after-tax income on taxable and municipal securities makes it
advisable, up to 20% of the Fund's assets may be held in cash or
invested in short-term taxable investments, including U.S. Government
obligations and money market instruments. The Fund may temporarily
invest more than 20% of its assets in taxable securities during
periods which, in the Adviser's opinion, require a defensive position.
A portion of the Fund's income may be subject to regular federal,
state and local income taxes.
The Fund may also invest in stand-by commitments and other puts,
repurchase agreements, reverse repurchase agreements, municipal lease
obligations, variable rate demand instruments and when-issued or
forward delivery securities, may purchase warrants to purchase debt
securities, and may also engage in strategic transactions. See
"Additional information about policies and investments" for more
information about these investment techniques.
Scudder Managed Municipal Bonds
Investment objectives and policies
Scudder Managed Municipal Bonds, a diversified series of Scudder
Municipal Trust, seeks to provide income exempt from regular federal
income tax primarily through investments in high-grade, long-term
municipal securities.
The Fund attempts to take advantage of opportunities in the market
caused by such factors as temporary yield disparities among individual
issues or classes of securities in an effort to achieve better capital
performance than that of an unmanaged portfolio of municipal bonds.
A small portion of its income may be subject to regular federal,
alternative minimum, state and local income taxes.
Investments
It is a fundamental policy, which may not be changed without a vote of
shareholders, that at least 80% of the Fund's net assets will normally
be invested in municipal bonds. Under normal market conditions, the
Fund expects to invest 100% of its portfolio in municipal securities.
The Fund has the flexibility to invest in municipal securities with
short-, medium- and long-term maturities. During recent years, its
portfolio has been invested primarily in long-term municipal bonds.
The municipal securities in which the Fund may invest are issued by or
on behalf of states, territories and possessions of the United States
and the District of Columbia and their subdivisions, agencies and
instrumentalities. The interest on these securities is exempt from
regular federal income tax. These municipal securities include
municipal notes, which are generally used to provide short-term
capital needs and have maturities of one year or less. Municipal notes
include tax anticipation notes, revenue anticipation notes, bond
anticipation notes and construction loan notes. The Fund may also
invest in municipal bonds, which meet longer-term capital needs and
generally have maturities of more than one year when issued.
Municipal bonds include: general obligation bonds, which are secured
by the issuer's pledge of its faith, credit and taxing power for
payment of principal and interest; revenue bonds; prerefunded bonds;
industrial development and pollution control bonds. The Fund may also
invest in other municipal securities such as variable rate demand
instruments.
The Fund may invest more than 25% of its assets in industrial
development or other private activity bonds, subject to the Fund's
fundamental investment policies, and also subject to the Fund's
current intention not to invest in municipal securities whose
investment income is taxable or AMT bonds. For purposes of the Fund's
investment limitation regarding concentration of investments in any
one industry, industrial development or other private activity bonds
ultimately payable by companies within the same industry will be
considered as if they were issued by issuers in the same industry.
Under normal market conditions, 100% of the Fund's investments in
municipal securities will consist of municipal securities rated at the
time of purchase within the four highest quality rating categories of
Moody's (Aaa, Aa, A and Baa), S&P or Fitch (AAA, AA, A and BBB) or
their equivalents. Additionally, at least 75% of the Fund's total
assets will be invested in municipal securities rated at the time of
purchase by any of these rating services within the three highest
quality rating categories or their equivalents. Unrated obligations
will be purchased only if they are considered to be of a quality
comparable to obligations rated within the four highest ratings
described above and are readily marketable. Securities must also meet
credit standards applied by the Adviser. Should the rating of a
portfolio security be downgraded the Adviser will determine whether it
is in the best interest of the Fund to retain or dispose of the
security.
If defensive considerations or an unusual disparity between after-tax
income on taxable and municipal securities makes it advisable, up to
20% of the Fund's assets may be held in cash or invested in short-term
taxable investments, including U.S. Government obligations and money
market instruments. The Fund may invest more than 20% of its assets in
taxable securities to meet temporary liquidity requirements.
The Fund may also invest in stand-by commitments and other puts,
repurchase agreements, municipal lease obligations, variable rate
demand instruments and when-issued or forward delivery securities, may
purchase warrants to purchase debt securities, and may also engage in
strategic transactions. See "Additional information about policies and
investments" for more information about these investment techniques.
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Scudder High Yield Tax Free Fund
Investment objectives and policies
Scudder High Yield Tax Free Fund, a diversified series of Scudder
Municipal Trust, seeks to provide a high level of income, exempt from
regular federal income tax, from an actively managed portfolio
consisting primarily of investment-grade municipal securities.
The Fund will invest at least 65% of its assets at the time of
purchase in municipal bonds rated within the four highest quality
rating categories of Moody's (Aaa, Aa, A or Baa), S&P or Fitch (AAA,
AA, A or BBB), or their equivalents as determined by the Adviser. The
Fund may invest, however, up to 35% of its total assets in bonds rated
below Baa by Moody's or below BBB by S&P or Fitch, or unrated
securities considered to be of equivalent quality. The Fund may not
invest in bonds rated below B by Moody's, S&P or Fitch, or their
equivalent. Should the rating of a portfolio security be downgraded
the Adviser will determine whether it is in the best interest of the
Fund to retain or dispose of the security.
High quality bonds, those within the two highest quality rating
categories, characteristically have a strong capacity to pay interest
and repay principal. Medium-grade bonds, those within the next two
such categories, are defined as having adequate capacity to pay
interest and repay principal. Lower-grade bonds (so-called "junk
bonds"), those rated below Baa by Moody's or BBB by S&P or Fitch,
involve greater price variability and a higher degree of speculation
with respect to the payment of principal and interest. Although some
have produced higher yields in the past than the investment-grade
bonds in which the Fund primarily invests, lower-grade bonds are
considered to be predominantly speculative and, therefore, carry
greater risk.
The Fund expects to invest primarily in medium-grade bonds. During
periods which, in the Adviser's opinion, require defensive investing,
the Fund may temporarily invest up to 100% of its assets in
high-quality municipal securities and high-quality short-term
tax-exempt or taxable instruments.
Profile|Application Request
Investments
It is a fundamental policy, which may not be changed without a vote of
shareholders, that at least 80% of the Fund's net assets will normally
be invested in municipal securities. Under normal market conditions,
the Fund expects to invest 100% of its portfolio assets in municipal
securities, the interest income from which is, in the opinion of bond
counsel, free from regular federal income tax. These municipal
securities are debt obligations issued by or on behalf of states,
territories and possessions of the United States and the District of
Columbia and their subdivisions, agencies and instrumentalities. Such
municipal securities include municipal notes, which are generally used
to provide short-term capital needs, and have maturities of one year
or less. Municipal notes include tax anticipation notes, revenue
anticipation notes and construction loan notes.
The Fund may also invest in municipal bonds, which meet longer-term
capital needs and generally have maturities of more than one year when
issued. Municipal bonds include general obligation bonds, revenue
bonds, prerefunded bonds, industrial development and pollution control
bonds. General obligation bonds and notes are secured by the issuer's
pledge of its full faith, credit and taxing power for payment of
principal and interest. Revenue bonds and notes are generally paid
from the revenues of a particular facility or a specific excise tax or
other revenue source. The Fund may also invest in other municipal
securities such as variable rate demand instruments. The Fund may
invest more than 25% of its assets in industrial development or other
private activity bonds, subject to the Fund's fundamental investment
policies, and also subject to the Fund's 20% limitation on investing
in AMT bonds and the Fund's current intention not to invest in
municipal securities whose investment income is subject to regular
federal income tax. For purposes of the Fund's investment limitation
regarding concentration of investments in any one industry, industrial
development or other private activity bonds ultimately payable by
companies within the same industry will be considered as if they were
issued by issuers in the same industry.
Under normal market conditions, the Fund expects to invest principally
in municipal securities with long-term maturities (i.e., more than 10
years). The Fund has the flexibility, however, to invest in municipal
securities with short- and medium-term maturities as well. The Fund
may invest more than 20% of its total assets in taxable securities to
meet temporary liquidity requirements.
The Fund may also invest in stand-by commitments and other puts,
repurchase agreements, municipal lease obligations, variable rate
demand instruments and when-issued or forward delivery securities and
may also engage in strategic transactions. See "Additional information
about policies and investments" for more information about these
investment techniques.
The Fund's distributions from interest on certain municipal securities
may be subject to the alternative minimum tax depending upon
investors' particular situations. However, no more than 20% of the
Fund's net assets will normally be invested in municipal securities
whose interest income, when distributed to shareholders, is subject to
the individual alternative minimum tax. In addition, state and local
taxes may apply, depending on your state tax laws.
Profile|Application Request
Selecting among the Funds
The five tax-free Funds discussed in this prospectus have been
presented in the order of their place on the risk/return spectrum --
from the least-risk Scudder Tax Free Money Fund to Scudder High Yield
Tax Free Fund, which has the highest risk but also the highest return
potential of the five. Investors should choose the Fund or Funds that
best match their own tolerance for risk and requirements for tax-free
income.
Scudder Tax Free Money Fund can be appropriate for investors looking
for income at today's tax-free money market rates while enjoying
stability of principal. For many investors what is most appealing
about this Fund is that it seeks to maintain its share price at a
constant net asset value of $1.00 per share. And since it pays income
that is normally 100% free from regular federal income tax, investors
normally retain the value of their initial investment, tax-free
earnings on that investment, plus earnings on those earnings, if
dividends are reinvested.
Scudder Limited Term Tax Free Fund is designed for investors seeking
high tax-free income consistent with a high degree of price stability.
While price and yield can fluctuate, the Fund may be appropriate for
investors needing a secondary cash reserve, monthly income or a
long-term savings vehicle.
Investors may choose this Fund as an alternative to a tax-free money
market fund. While a tax-free money fund is managed for total price
stability, it generally offers lower and less stable yields than a
short-term municipal bond fund. Further, the Fund may appeal to
investors concerned about market volatility or the possibility of
rising interest rates, who are willing to accept somewhat lower yields
than normally provided by a longer-term bond fund in exchange for
greater price stability.
Scudder Medium Term Tax Free Fund is designed for individual and
institutional investors who are looking for higher after-tax income
than comparable taxable investments can provide. The Fund seeks a
higher level of income than tax-free money market instruments normally
offer, and greater price stability than is generally available from
longer-term municipal bonds. Over time, the Fund's share price will
fluctuate with changing market conditions. When interest rates rise,
the value of the securities held by this Fund will generally decline.
A fall in interest rates will usually lead to an increase in the value
of those securities. A fund with a maturity longer than Scudder Medium
Term Tax Free Fund will tend to have a higher yield but will exhibit
greater share price volatility; a fund with a shorter maturity will
have a lower yield but offers more price stability.
Scudder Medium Term Tax Free Fund's emphasis on high-grade securities
is also expected to limit share price volatility. The Fund's
professional managers will attempt to take advantage of market
opportunities to achieve a higher total return than would be available
from an unmanaged portfolio of intermediate-term municipal bonds.
Scudder Managed Municipal Bonds provides income exempt from regular
federal income tax so investors will normally be able to keep 100% of
their investment income. Investors also benefit from ongoing analysis
and professional management by Scudder, Stevens & Clark, Inc. Again,
the Fund's professional managers attempt to take advantage of market
opportunities to achieve a higher total return than unmanaged
portfolios of municipal bonds. Typically, the Fund expects to have a
higher yield than the three tax-free funds described above because its
portfolio is usually invested in securities with longer maturities.
With its emphasis on investment-grade bonds, Scudder High Yield Tax
Free Fund offers a sensible approach to high tax-free yields. It is
designed for investors seeking the opportunity for yields higher than
those normally offered by a fund emphasizing investment in only
highest-quality bonds, but unwilling to assume the risk often
associated with a fund emphasizing investment primarily in
non-investment-grade bonds. Depending on your tax bracket, you may
earn a substantially higher after-tax return from this Fund than from
comparable investments whose income is subject to federal taxes. For
example, if you are a high income taxpayer with a top federal income
tax rate of 39.6% in 1995, you would need to earn a taxable yield of
9.06% to receive after-tax income equal to the 5.47% tax-free yield
provided by Scudder High Yield Tax Free Fund for the 30-day period
ended December 31, 1995.
The yield levels of tax-free and taxable investments continually
change. Before investing in any of these Funds, you should compare
their yields to the after-tax yields you would receive from comparable
investments paying taxable income.
The Adviser maintains a large fixed-income research staff, has a long
tradition of independent municipal bond credit analysis and has over
$14 billion in municipal bond assets under management. In addition,
each Fund offers all the benefits of the Scudder Family of Funds
including free checkwriting for Scudder Tax Free Money Fund, Scudder
Limited Term Tax Free Fund and Scudder Medium Term Tax Free Fund.
Scudder, Stevens & Clark, Inc. manages a diverse family of pure
no-load(tm) funds and provides a wide range of services to help
investors meet their investment needs. Please refer to "Investment
products and services" for additional information.
Additional information about policies and investments
Investment restrictions
Each of the Funds has adopted certain fundamental policies which may
not be changed without a vote of shareholders and which are designed
to reduce the Funds' investment risk.
Each of the Funds may not borrow money except as a temporary measure
for extraordinary or emergency purposes. Each of the Funds, with the
exception of Scudder Medium Term Tax Free Fund, may not make loans
except through the lending of portfolio securities, the purchase of
debt securities or through repurchase agreements. Scudder Medium Term
Tax Free Fund may not make loans except through the purchase of debt
securities or through repurchase agreements.
In addition, each Fund has adopted the following nonfundamental
policies: each Fund may not invest more than 10% of its net assets in
securities which are not readily marketable, restricted securities and
repurchase agreements maturing in more than seven days. Scudder
Limited Term Tax Free Fund may not make loans if the market value of
securities loaned exceeds 30% of the value of the Fund's total assets.
A complete description of these and other policies and restrictions is
contained under "Investment Restrictions" in the Funds' Statement of
Additional Information.
When-issued securities
Each of the Funds may purchase securities on a when-issued or forward
delivery basis, for payment and delivery at a later date. The price
and yield are generally fixed on the date of commitment to purchase.
During the period between purchase and settlement, no interest accrues
to the Fund. At the time of settlement, the market value of the
security may be more or less than the purchase price.
Repurchase agreements
As a means of earning taxable income for periods as short as
overnight, each of the Funds, with the exception of Scudder Limited
Term Tax Free Fund, may enter into repurchase agreements with selected
banks and broker/dealers. Under a repurchase agreement, the Fund
acquires securities, subject to the seller's agreement to repurchase
them at a specified time and price. Income from repurchase agreements
will be taxable when distributed to shareholders. See "Risk factors."
Municipal lease obligations
Each of the Funds, with the exception of Scudder Tax Free Money Fund,
may invest in municipal lease obligations and participation interests
in such obligations. These obligations, which may take the form of a
lease, an installment purchase contract or a conditional sales
contract, are issued by state and local governments and authorities to
acquire land and a wide variety of equipment and facilities.
Generally, the Funds will not hold such obligations directly, but will
purchase a certificate of participation or other participation
interest in a municipal obligation from a bank or other financial
intermediary. A participation interest gives each Fund a proportionate
interest in the underlying obligation.
Stand-by commitments and other puts
To facilitate liquidity, each of the Funds, with the exception of
Scudder Limited Term Tax Free Fund, may enter into "stand-by
commitments" permitting them to resell municipal securities to the
original seller at a specified price. Stand-by commitments generally
involve no cost, and any costs would be, in any event, limited to no
more than 0.5% of the value of the assets of each Fund. Any such costs
may, however, reduce yield.
Third party puts
Each of the Funds may purchase long-term fixed-rate bonds that have
been coupled with an option granted by a third party financial
institution allowing a Fund at specified intervals (not exceeding 397
calendar days in the case of Scudder Tax Free Money Fund) to tender
(or "put") its bonds to the institution and receive the face value
thereof. These third party puts are available in several different
forms, may be represented by custodial receipts or trust certificates
and may be combined with other features such as interest rate swaps.
See "Risk factors."
Variable rate demand instruments
Each of the Funds may also invest in variable rate demand instruments.
Variable rate demand instruments are securities with long-stated
maturities but demand features that allow the holder to demand 100% of
the principal plus interest within one to seven days. The coupon
varies daily, weekly or monthly with the market. The price remains at
par and this provides a great deal of stability to the portfolio at
market yields.
Strategic Transactions and derivatives
Each of the Funds, with the exception of Scudder Tax Free Money Fund,
may, but is not required to, utilize various other investment
strategies as described below to hedge various market risks (such as
interest rates and broad or specific market movements), to manage the
effective maturity or duration of a Fund's portfolio, or to enhance
potential gain. These strategies may be executed through the use of
derivative contracts. Such strategies are generally accepted as a part
of modern portfolio management and are regularly utilized by many
mutual funds and other institutional investors. Techniques and
instruments may change over time as new instruments and strategies are
developed or regulatory changes occur.
In the course of pursuing these investment strategies, a Fund may
purchase and sell exchange-listed and over-the-counter put and call
options on securities, fixed-income indices and other financial
instruments, purchase and sell financial futures contracts and options
thereon, and enter into various interest rate transactions such as
swaps, caps, floors or collars (collectively, all the above are called
"Strategic Transactions").
Strategic Transactions may be used without limit (except to the extent
that 80% of a Fund's net assets are required to be invested in
tax-exempt municipal securities, and as limited by its other
investment restrictions) to attempt to protect against possible
changes in the market value of securities held in or to be purchased
for a Fund's portfolio resulting from securities markets fluctuations,
to protect a Fund's unrealized gains in the value of its portfolio
securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of fixed-income
securities in a Fund's portfolio, or to establish a position in the
derivatives markets as a temporary substitute for purchasing or
selling particular securities. Some Strategic Transactions may also be
used to enhance potential gain although no more than 5% of a Fund's
assets will be committed to Strategic Transactions entered into for
non-hedging purposes. Any or all of these investment techniques may be
used at any time and in any combination, and there is no particular
strategy that dictates the use of one technique rather than another,
as use of any Strategic Transaction is a function of numerous
variables including market conditions. The ability of a Fund to
utilize these Strategic Transactions successfully will depend on the
Adviser's ability to predict pertinent market movements, which cannot
be assured. The Funds will comply with applicable regulatory
requirements when implementing these strategies, techniques and
instruments. Strategic Transactions involving financial futures and
options thereon will be purchased, sold or entered into only for bona
fide hedging, risk management or portfolio management purposes and not
for speculative purposes. Please refer to "Risk factors -- Strategic
Transactions and derivatives" for more information.
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Risk factors
The Funds' risks are determined by the nature of the securities held
and the portfolio management strategies used by the Adviser. The
following are descriptions of certain risks related to the investments
and techniques that certain Funds may use from time to time.
Debt securities. Securities rated Baa by Moody's or BBB by S&P or
Fitch are neither highly protected nor poorly secured. These
securities normally pay higher yields but involve potentially greater
price variability than high-quality securities. These securities are
regarded as having adequate capacity to repay principal and pay
interest, although adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to do so.
Moody's considers bonds it rates Baa to have speculative elements as
well as investment-grade characteristics.
Securities rated below Baa by Moody's or BBB by S&P or Fitch involve
greater price volatility and higher degrees of speculation with
respect to the payment of principal and interest. These securities
involve greater risk of loss or price changes due to changes in the
issuer's capacity to pay. The market prices of such lower-rated debt
securities may decline significantly in periods of general economic
difficulty. In addition, the trading market for those securities is
generally less liquid than for higher-rated securities and a Fund may
have difficulty disposing of these securities at the time it may wish
to do so. The lack of a liquid secondary market for certain securities
may also make it more difficult for a Fund to obtain accurate market
quotations for purposes of valuing its portfolio and calculating its
net asset value.
Repurchase agreements. If the seller under a repurchase agreement
becomes insolvent, the Fund's right to dispose of the securities may
be restricted, or the value of the securities may decline before the
Fund is able to dispose of them. In the event of the commencement of
bankruptcy or insolvency proceedings with respect to the seller of the
securities before repurchase of the securities under a repurchase
agreement, the Fund may encounter delay and incur costs, including a
decline in the value of the securities, before being able to sell the
securities.
Third party puts. In connection with third party puts, the financial
institution granting the option does not provide credit enhancement,
and typically if there is a default on or significant downgrading of
the bond or a loss of its tax-exempt status, the put option will
terminate automatically, the risk to the Fund will be that of holding
a long-term bond and, in the case of Scudder Tax Free Money Fund, the
weighted average maturity of the Fund's portfolio would be adversely
affected.
Municipal lease obligations. Municipal lease obligations and
participation interests in such obligations frequently have risks
distinct from those associated with general obligation or revenue
bonds. Municipal lease obligations are not secured by the governmental
issuer's credit, and if funds are not appropriated for lease payments,
the lease may terminate, with the possibility of default on the lease
obligation and significant loss to the Funds. Although
"non-appropriation" obligations are secured by the leased property,
disposition of that property in the event of foreclosure might prove
difficult, time consuming and costly. In addition, the tax treatment
of such obligations in the event of non-appropriation is unclear. In
evaluating the credit quality of a municipal lease obligation that is
unrated, the Adviser will consider a number of factors including the
likelihood that the governmental issuer will discontinue appropriating
funding for the leased property. For more information please refer to
the Funds' Statement of Additional Information.
Illiquid investments. The absence of a trading market can make it
difficult to ascertain a market value for illiquid investments.
Disposing of illiquid investments may involve time- consuming
negotiation and legal expenses, and it may be difficult or impossible
for the Fund to sell them promptly at an acceptable price.
Strategic Transactions and derivatives. Strategic Transactions,
including derivative contracts, have risks associated with them
including possible default by the other party to the transaction,
illiquidity and, to the extent the Adviser's view as to certain market
movements is incorrect, the risk that the use of such Strategic
Transactions could result in losses greater than if they had not been
used. Use of put and call options may result in losses to a Fund,
force the purchase or sale of portfolio securities at inopportune
times or for prices higher than (in the case of put options) or lower
than (in the case of call options) current market values, limit the
amount of appreciation a Fund can realize on its investments or cause
a Fund to hold a security it might otherwise sell. The use of options
and futures transactions entails certain other risks. In particular,
the variable degree of correlation between price movements of futures
contracts and price movements in the related portfolio position of a
Fund creates the possibility that losses on the hedging instrument may
be greater than gains in the value of a Fund's position. In addition,
futures and options markets may not be liquid in all circumstances and
certain over-the-counter options may have no markets. As a result, in
certain markets, a Fund might not be able to close out a transaction
without incurring substantial losses, if at all. Although the use of
futures contracts and options transactions for hedging should tend to
minimize the risk of loss due to a decline in the value of the hedged
position, at the same time they tend to limit any potential gain which
might result from an increase in value of such position. Finally, the
daily variation margin requirements for futures contracts would create
a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial
premium. Losses resulting from the use of Strategic Transactions would
reduce net asset value, and possibly income, and such losses can be
greater than if the Strategic Transactions had not been utilized. The
Strategic Transactions that a Fund may use and some of their risks are
described more fully in the Funds' Statement of Additional
Information.
Distribution and performance information
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Dividends and capital gains distributions
The Funds' dividends from net investment income are declared daily and
distributed monthly. The Funds intend to distribute net realized
capital gains after utilization of capital loss carryforwards, if any,
in November or December to prevent application of a federal excise
tax. An additional distribution may be made if required. Any dividends
or capital gains distributions declared in October, November or
December with a record date in such a month and paid the following
January will be treated by shareholders for federal income tax
purposes as if received on December 31 of the calendar year declared.
According to preference, shareholders may receive distributions in
cash or have them reinvested in additional shares of the Fund.
Distributions of tax-exempt income are not subject to federal income
taxes, except for the possible applicability of the alternative
minimum tax. However, distributions may be subject to state and local
income taxes. A portion of each Fund's income, including income from
repurchase agreements, gains from options, and market discount bonds,
may be taxable to shareholders as ordinary income. Long-term capital
gains distributions, if any, are taxable as long-term capital gains
regardless of the length of time shareholders have owned shares.
Short-term capital gains and any other taxable income distributions
are taxable as ordinary income. Distributions of tax-exempt income are
taken into consideration in computing the portion, if any, of Social
Security and railroad retirement benefits subject to federal and, in
some cases, state taxes.
Each Fund sends detailed tax information about the amount and type of
its distributions to its shareholders by January 31 of the following
year.
Performance information
From time to time, quotations of the Funds' performance may be
included in advertisements, sales literature, or shareholder reports.
All performance figures are historical, show the performance of a
hypothetical investment and are not intended to indicate future
performance.
The "SEC yield" of Scudder Limited Term Tax Free Fund, Scudder Medium
Term Tax Free Fund, Scudder Managed Municipal Bonds and Scudder High
Yield Tax Free Fund is an annualized expression of the net income
generated by the Fund over a specified 30-day (one month) period, as a
percentage of a Fund's share price on the last day of that period.
This yield is calculated according to methods required by the
Securities and Exchange Commission (the "SEC"), and therefore may not
equate to the level of income paid to shareholders. "Total return" is
the change in value of an investment in a Fund for a specified period.
The "average annual total return" of a Fund is the average annual
compound rate of return of an investment in a Fund assuming the
investment has been held for one year, five years and ten years as of
a stated ending date. (If the Fund has not been in operation for at
least ten years, the life of the Fund will be used where applicable.)
"Cumulative total return" represents the cumulative change in value of
an investment in any of the Funds for various periods. All types of
total return calculations assume that all dividends and capital gains
distributions during the period were reinvested in shares of the
Funds. Each Fund's tax-equivalent yield is calculated by determining
the rate of return that would have to be achieved on a fully taxable
investment to produce the after-tax equivalent of the Fund's yield,
assuming certain tax brackets for a Fund shareholder. Yields for all
five Funds are expressed as annualized percentages. The "effective SEC
yield" of Scudder Tax Free Money Fund is expressed similarly but, when
annualized, the income earned by an investment in that Fund is assumed
to be reinvested and will reflect the effects of compounding. The
yield of Scudder Tax Free Money Fund refers to the income generated by
an investment in the Fund over a specified seven-day period.
Performance for any of the Funds will vary based upon, among other
things, changes in market conditions and the level of the Funds'
expenses.
<TABLE>
<CAPTION>
Summary of important features
<S> <C> <C> <C> <C> <C>
Scudder
Scudder Limited Scudder Medium Managed Scudder High
Scudder Tax Free Term Tax Free Term Tax Free Municipal Yield Tax
Money Fund Fund Fund Bonds Free Fund
Investment * money market * higher and * higher * income * high
characteristics fund income more stable tax-free income exempt from tax-free
exempt from level of than generally regular income
regular federal federally available from federal
income tax tax-free income tax-free money income tax
than normally market funds
provided by
tax-free money
market
investments
* stability of * more price * more price * net asset *
principal stability than stability than value potentially
investments in investments in fluctuates greater
long-term long-term with level price
municipal bonds municipal bonds of interest variability
rates
Investments * short-term * shorter-term, * intermediate- * primarily * primarily
municipal high-grade term municipal long-term long-term
securities municipal securities municipal municipal
securities securities securities
* * *
dollar-weighted dollar-weighted dollar-weighted
average maturity average average
of 90 days or effective effective
less maturity of maturity of
between one and between five and
five years ten years
Quality * 100% of * normally at * normally at * at least * at least
investments least 80% of least 80% of 75% of 65% of
rated within top investments investments investments investments
two quality rated within top rated within top rated within rated within
rating three quality three quality top three top four
categories, or rating rating quality quality
judged to be of categories, or categories, or rating rating
comparable equivalent equivalent categories, categories,
quality or or
equivalent equivalent
* 100% of
municipal
securities
rated within
top four
quality
rating
categories,
or
equivalent
Dividends Dividends for all five funds are declared daily and paid monthly. Shareholders may
choose to reinvest their dividends or receive them in cash.
</TABLE>
Fund organization
Scudder Tax Free Money Fund, Scudder Tax Free Trust and Scudder
Municipal Trust (the "Trusts") are open-end management investment
companies registered under the Investment Company Act of 1940 (the
"1940 Act"). The Trusts were organized as Massachusetts business
trusts in October 1979, December 1982 and September 1976,
respectively. Scudder Limited Term Tax Free Fund and Scudder Medium
Term Tax Free Fund are diversified series of Scudder Tax Free Trust.
Scudder High Yield Tax Free Fund and Scudder Managed Municipal Bonds
are diversified series of Scudder Municipal Trust.
The activities of the Funds are supervised by their respective Boards
of Trustees. Shareholders have one vote for each share held on matters
on which they are entitled to vote. The Trusts are not required and
have no current intention of holding annual shareholder meetings,
although special meetings may be called for purposes such as electing
or removing Trustees, changing fundamental investment policies or
approving an investment advisory contract. Shareholders will be
assisted in communicating with other shareholders in connection with
removing a Trustee as if Section 16(c) of the 1940 Act were
applicable.
The prospectuses of each of the five Funds are combined in this
prospectus. Each Fund offers only its own shares, yet it is possible
that a Fund might become liable for a misstatement or omission
regarding another Fund. The Trustees of each Trust have considered
this and approved the use of a combined prospectus.
Investment adviser
The Funds retain the investment management firm of Scudder, Stevens &
Clark, Inc., a Delaware corporation, to manage the Funds' daily
investment and business affairs subject to the policies established by
their respective Boards of Trustees. The Trustees have overall
responsibility for the management of their respective funds under
Massachusetts law.
The management fee for Scudder Limited Term Tax Free Fund is 0.60% of
the Fund's average daily net assets on an annual basis.
The management fees for Scudder Tax Free Money Fund, Scudder Medium
Term Tax Free Fund, Scudder Managed Municipal Bonds and Scudder High
Yield Tax Free Fund are graduated so that increases in a Fund's net
assets may result in a lower fee and decreases in a Fund's net assets
may result in a higher fee.
The management fees are payable monthly, provided that each Fund will
make such interim payments as may be requested by the Adviser not to
exceed 75% of the amount of the fee then accrued on the books of the
Fund and unpaid.
Until December 31, 1996, the Adviser has agreed not to impose all or a
portion of its investment management fee and to take other action, to
the extent necessary, to maintain the annualized expenses of Scudder
Limited Term Tax Free Fund at 0.75% of the Fund's average daily net
assets.
For the year ended December 31, 1995, the Adviser received investment
management fees of 0.50% and 0.51%, 0.55% and 0.54% of the average
daily net assets on an annualized basis of Scudder Tax Free Money
Fund, Scudder Managed Municipal Bonds, Scudder Medium Term Tax Free
Fund and Scudder High Yield Tax Free Fund, respectively.
For the fiscal year ended October 31, 1995, the Adviser received an
investment management fee of 0.07% of the average daily net assets on
an annualized basis from Scudder Limited Term Tax Free Fund.
All of a Fund's expenses are paid out of gross investment income.
Shareholders pay no direct charges or fees for investment or
administrative services.
Scudder, Stevens & Clark, Inc. is located at Two International Place,
Boston, Massachusetts.
Transfer agent
Scudder Service Corporation, P.O. Box 2291, Boston, Massachusetts
02107-2291, a subsidiary of the Adviser, is the transfer, shareholder
servicing and dividend-paying agent for the Funds.
Underwriter
Scudder Investor Services, Inc., a subsidiary of the Adviser, is the
Funds' principal underwriter. Scudder Investor Services, Inc.
confirms, as agent, all purchases of shares of the Funds. Scudder
Investor Relations is a telephone information service provided by
Scudder Investor Services, Inc.
Custodian
State Street Bank and Trust Company is the custodian for the Funds.
Fund accounting agent
Scudder Fund Accounting Corporation, a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and
maintaining the general accounting records of the Funds.
Profile|Application Request
Purchases
------------ -----------------------------------------
Opening an Minimum initial investment: $1,000; IRAs
account $500
Group retirement plans (401(k), 403(b),
etc.) have similar or lower minimums.
See appropriate plan literature.
Make checks * By Mail Send your completed and
payable to signed application and
"The check
Scudder
Funds." by regular or by
mail to: express,
registered,
or certified
mail to:
The Scudder
Scudder Shareholder
Funds Service
P.O. Box Center
2291 42 Longwater
Boston, MA Drive
Norwell, MA
02107-2291 02061-1612
* By Wire Please see Transaction
information -- Purchasing
shares -- By wire for
details, including the ABA
wire transfer number. Then
call 1-800-225-5163 for
instructions.
* In Person Visit one of our Funds
Centers to complete your
application with the help
of a Scudder
representative. Funds
Center locations are
listed under Shareholder
benefits.
------------ -----------------------------------------
Purchasing Minimum additional investment: $100;
additional IRAs $50
shares
Group retirement plans (401(k), 403(b),
etc.) have similar or lower minimums.
See appropriate plan literature.
Make checks * By Mail Send a check with a
payable to Scudder investment slip,
"The or with a letter of
Scudder instruction including your
Funds." account number and the
complete Fund name, to the
appropriate address listed
above.
* By Wire Please see Transaction
information -- Purchasing
shares -- By wire for
details, including the ABA
wire transfer number.
* In Person Visit one of our Funds
Centers to make an
additional investment in
your Scudder fund account.
Funds Center locations are
listed under Shareholder
benefits.
* By Please see Transaction
Telephone information -- Purchasing
shares -- By AutoBuy for
more details.
* By You may arrange to make
Automatic investments on a regular
Investment basis through automatic
Plan ($50 deductions from your bank
minimum) checking account. Please
call 1-800-225-5163 for
more information and an
enrollment form.
Profile|Application Request
Exchanges and redemptions
-----------
Exchanging
shares
---------------------------------------------------------
Minimum investments: $1,000 to establish a new account;
$100 to exchange among existing accounts
* By
Telephone
To speak with a service representative,
call 1-800-225-5163 from 8 a.m. to 8 p.m.
eastern time or to access SAIL(tm),
Scudder's Automated Information Line, call
1-800-343-2890 (24 hours a day).
* By Mail
or Fax
Print or type your instructions and
include:
- the name of the Fund and the account
number you are exchanging from;
- your name(s) and address as they appear
on your account;
- the dollar amount or number of shares
you wish to exchange;
- the name of the Fund you are exchanging
into;
- your signature(s) as it appears on your
account; and
- a daytime telephone number.
Send your instructions
by regular
mail to:
or by
express,
registered,
or certified
mail to:
or by fax to:
The Scudder
Funds
P.O. Box
2291
Boston, MA
02107-2291
Scudder
Shareholder
Service
Center
42 Longwater
Drive
Norwell, MA
02061-1612
1-800-821-6234
-----------
Redeeming
------------
* By
shares
-------------------------------------------
To speak with a service representative,
Telephone
eastern time or to access SAIL(tm),
Scudder's Automated Information Line, call
1-800-343-2890 (24 hours a day). You may
have redemption proceeds sent to your
predesignated bank account, or redemption
proceeds of up to $50,000 sent to your
address of record.
* By
"Write-
A-Check"
For Scudder Tax Free Money Fund, Scudder
Limited Term Tax Free Fund and Scudder
Medium Term Tax Free Fund, you may redeem
shares by writing checks against your
account balance as often as you like for
at least $100, but not more than
$5,000,000.
* By Mail
or Fax
Send your instructions for redemption to
the appropriate address or fax number
above and include:
- the name of the Fund and account number
you are redeeming from;
- your name(s) and address as they appear
on your account;
- the dollar amount or number of shares
you wish to redeem;
- your signature(s) as it appears on your
account; and
- a daytime telephone number.
A signature guarantee is required for
redemptions over $50,000. See Transaction
information -- Redeeming shares.
* By
Automatic
Withdrawal
Plan
You may arrange to receive automatic cash
payments periodically. Call 1-800-225-5163
for more information and an enrollment
form.
Transaction information
Purchasing shares
Purchases are executed at the next calculated net asset value per
share after the Fund's transfer agent receives the purchase request in
good order. Purchases are made in full and fractional shares. (See
"Share price.")
By check. If you purchase shares with a check that does not clear,
your purchase will be canceled and you will be subject to any losses
or fees incurred in the transaction. Checks must be drawn on or
payable through a U.S. bank. If you purchase shares by check and
redeem them within seven business days of purchase, the Fund may hold
redemption proceeds until the purchase check has cleared. If you
purchase shares by federal funds wire, you may avoid this delay.
Redemption requests by telephone, or by "Write-A-Check" in the case of
Scudder Tax Free Money Fund, Scudder Limited Term Tax Free Fund and
Scudder Medium Term Tax Free Fund, prior to the expiration of the
seven-day period will not be accepted.
By wire. To open a new account by wire, first call Scudder at
1-800-225-5163 to obtain an account number. A representative will
instruct you to send a completed, signed application to the transfer
agent. Accounts cannot be opened without a completed, signed
application and a Scudder fund account number. Contact your bank to
arrange a wire transfer to:
The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552
Your wire instructions must also include:
-- the name of the fund in which the money is to be invested,
-- the account number of the fund, and
-- the name(s) of the account holder(s).
The account will be established once the application and money order
are received in good order.
You may also make additional investments of $100 or more to your
existing account by wire.
By "AutoBuy." If you elected "AutoBuy" for your account, you can call
toll-free to purchase shares. The money will be automatically
transferred from your predesignated bank checking account. Your bank
must be a member of the Automated Clearing House for you to use this
service. If you did not elect "AutoBuy," call 1-800-225-5163 for more
information.
To purchase additional shares, call 1-800-225-5163. Purchases must be
for at least $250 but not more than $250,000. Proceeds in the amount
of your purchase will be transferred from your bank checking account
in two or three business days following your call. For requests
received by the close of regular trading on the New York Stock
Exchange (the "Exchange"), normally 4 p.m. eastern time, shares will
be purchased at the net asset value per share calculated at the close
of trading on the day of your call. Shares will begin to earn
dividends on the day the purchase payment from your bank is received
by the Fund. "AutoBuy" requests received after the close of regular
trading on the Exchange will begin their processing and be purchased
at the net asset value calculated the following business day.
If you purchase shares by "AutoBuy" and redeem them within seven days
of the purchase, the Fund may hold the redemption proceeds for a
period of up to seven business days. If you purchase shares and there
are insufficient funds in your bank account, the purchase will be
canceled and you will be subject to any losses or fees incurred in the
transaction. "AutoBuy" transactions are not available for Scudder IRA
accounts and most other retirement plan accounts.
By exchange. Your new account will have the same registration and
address as your existing account.
The exchange requirements for corporations, other organizations,
trusts, fiduciaries, agents, institutional investors and retirement
plans may be different from those for regular accounts. Please call
1-800-225-5163 for more information, including information about the
transfer of special account features.
You can also make exchanges among your Scudder fund accounts on SAIL,
the Scudder Automated Information Line, by calling 1-800-343-2890.
By telephone order. Certain financial institutions may call Scudder
before the close of regular trading on the Exchange, normally 4 p.m.
eastern time, and purchase shares at that day's price. Such purchased
shares will begin to earn dividends on the day on which the payment is
received by the Fund. If payment by check or wire is not received from
the financial institution within three business days, the order is
subject to cancellation and the financial institution will be
responsible for any loss to the Fund resulting from this cancellation.
Please call 1-800-854-8525 for more information.
Redeeming shares
The Funds allow you to redeem shares (i.e., sell them back to the
Fund) without redemption fees.
By telephone. This is the quickest and easiest way to sell Fund
shares. If you elected telephone redemption to your bank on your
application, you can call to request that federal funds be sent to
your authorized bank account. If you did not elect telephone
redemption to your bank on your application, call 1-800-225-5163 for
more information.
Redemption proceeds will be wired to your bank unless otherwise
requested. If your bank cannot receive federal reserve wires,
redemption proceeds will be mailed to your bank. There will be a $5
charge for all wire redemptions.
You can also make redemptions from your Scudder fund account on SAIL
by calling 1-800-343-2890.
If you open an account by wire, you cannot redeem shares by telephone
until the Fund's transfer agent has received your completed and signed
application. Telephone redemption is not available for shares held in
Scudder IRA accounts and most other Scudder retirement plan accounts.
In the event that you are unable to reach the Fund by telephone, you
should write to the Fund; see "How to contact Scudder" for the
address.
By "AutoSell." If you elected "AutoSell" for your account, you can
call toll-free to redeem shares. The money will be automatically
transferred to your predesignated bank checking account. Your bank
must be a member of the Automated Clearing House for you to use this
service. If you did not elect "AutoSell," call 1-800-225-5163 for more
information.
To redeem shares, call 1-800-225-5163. Redemptions must be for at
least $250. Proceeds in the amount of your redemption will be
transferred to your bank checking account in two or three business
days following your call. For requests received by the close of
regular trading on the Exchange, shares will be redeemed at the net
asset value per share calculated at the close of trading on the day of
your call. "AutoSell" requests received after the close of regular
trading on the Exchange will begin their processing and be redeemed at
the net asset value calculated the following business day.
"AutoSell" transactions are not available for Scudder IRA accounts and
most other retirement plan accounts.
By "Write-A-Check." You may redeem shares of Scudder Tax Free Money
Fund, Scudder Limited Term Tax Free Fund and Scudder Medium Term Tax
Free Fund by writing checks against your account balance for at least
$100. Your Fund investments will continue to earn dividends until your
check is presented to the Fund for payment.
Checks will be returned by the Fund's transfer agent if there are
insufficient shares to meet the withdrawal amount. You should not
attempt to close an account by check, because the exact balance at the
time the check clears will not be known when the check is written.
Signature guarantees. For your protection and to prevent fraudulent
redemptions, on written redemption requests in excess of $50,000 we
require an original signature and an original signature guarantee for
each person in whose name the account is registered. (Each Fund
reserves the right, however, to require a signature guarantee for all
redemptions.) You can obtain a signature guarantee from most banks,
credit unions or savings associations, or from broker/dealers,
municipal securities broker/dealers, government securities
broker/dealers, national securities exchanges, registered securities
associations, or clearing agencies deemed eligible by the Securities
and Exchange Commission. Signature guarantees by notaries public are
not acceptable. Redemption requirements for corporations, other
organizations, trusts, fiduciaries, agents, institutional investors
and retirement plans may be different from those for regular accounts.
For more information, please call 1-800-225-5163.
Telephone transactions
Shareholders automatically receive the ability to exchange by
telephone and the right to redeem by telephone up to $50,000 to their
address of record. Shareholders also may, by telephone, request that
redemption proceeds be sent to a predesignated bank account. Each Fund
uses procedures designed to give reasonable assurance that telephone
instructions are genuine, including recording telephone calls, testing
a caller's identity and sending written confirmation of telephone
transactions. If a Fund does not follow such procedures, it may be
liable for losses due to unauthorized or fraudulent telephone
instructions. Each Fund will not be liable for acting upon
instructions communicated by telephone that it reasonably believes to
be genuine.
Share price
Purchases and redemptions, including exchanges, are made at net asset
value. For each of the Funds, Scudder Fund Accounting Corporation
determines net asset value per share as of the close of regular
trading on the Exchange on each day the Exchange is open for trading.
For Scudder Tax Free Money Fund, Scudder Fund Accounting Corporation
also determines net asset value per share as of noon, eastern time, on
each day the Exchange is open for trading. Net asset value per share
is calculated for purchases and redemptions by dividing the value of
total Fund assets, less all liabilities, by the total number of shares
outstanding. In calculating the net asset value per share, each Fund
uses the current market value of the securities, except that Scudder
Tax Free Money Fund uses the amortized cost value.
Processing time
For Scudder Limited Term Tax Free Fund, Scudder Medium Term Tax Free
Fund, Scudder Managed Municipal Bonds and Scudder High Yield Tax Free
Fund all purchase and redemption requests must be received in good
order by the Funds' transfer agent. Requests received by the close of
regular trading on the Exchange are executed at the net asset value
per share calculated at the close of trading that day. Purchase and
redemption requests received after the close of regular trading on the
Exchange will be executed the following business day. Purchases made
by federal funds wire before noon eastern time will begin earning
income that day; all other purchases received before the close of
regular trading on the Exchange will begin earning income the next
business day. Redeemed shares will earn income on the day on which the
redemption request is executed.
If you wish to make a purchase of $500,000 or more you should notify
the Funds' transfer agent of such a purchase by calling
1-800-225-5163.
For Scudder Tax Free Money Fund, purchases made by wire and received
by the Fund's transfer agent before noon on any business day are
executed at noon on that day and begin earning income the same day.
Those made by wire between noon and the close of regular trading on
the Exchange on any business day are executed at the close of trading
the same day and begin earning income the next business day. Purchases
made by check are executed on the day the check is received in good
order by the Fund's transfer agent and begin earning income on the
next business day. Redemption requests received in good order by the
Fund's transfer agent between noon and the close of regular trading on
the Exchange are executed at the net asset value calculated at the
close of regular trading on that day and will earn a dividend on the
redeemed shares that day. If a redemption request is received by noon,
proceeds will normally be wired that day, if requested by the
shareholder, but no dividend will be earned on the redeemed shares on
that day.
The Trusts will normally send redemption proceeds within one business
day following the redemption request, but may take up to seven
business days (or longer in the case of shares recently purchased by
check).
Short-term trading
Purchases and sales should be made for long-term investment purposes
only. Scudder Limited Term Tax Free Fund, Scudder Medium Term Tax Free
Fund, Scudder Managed Municipal Bonds, Scudder High Yield Tax Free
Fund and Scudder Investor Services, Inc. each reserves the right to
restrict purchases of a Fund's shares (including exchanges) when a
pattern of frequent purchases and sales made in response to short-term
fluctuations in a Fund's share price appears evident.
Tax information
A redemption of shares, including an exchange into another Scudder
fund, is a sale of shares and may result in a gain or loss for income
tax purposes (although no gain or loss will be realized in the case of
a redemption or exchange of shares of Scudder Tax Free Money Fund if
it maintains a constant net asset value per share).
Tax identification number
Be sure to complete the Tax Identification Number section of the
Fund's application when you open an account. Federal tax law requires
these Funds to withhold 31% of taxable dividends, capital gains
distributions and, except in the case of Scudder Tax Free Money Fund,
redemption and exchange proceeds from accounts (other than those of
certain exempt payees) without a certified Social Security or tax
identification number and certain other certified information or upon
notification from the IRS or a broker that withholding is required.
The Funds reserve the right to reject new account applications without
a certified Social Security or tax identification number. The Funds
also reserve the right, following 30 days' notice to shareholders, to
redeem all shares in accounts without a certified Social Security or
tax identification number. A shareholder may avoid involuntary
redemption by providing the Fund with a tax identification number
during the 30-day notice period.
Minimum balances
Shareholders should maintain a share balance worth at least $1,000,
which amount may be changed by the Board of Trustees of each Trust.
The Funds reserve the right, following 60 days' written notice to
shareholders, to redeem all shares in sub-minimum accounts, including
accounts of new investors, where a reduction in value has occurred due
to a redemption or exchange out of the account. Reductions in value
that result solely from market activity will not trigger an
involuntary redemption. The Funds will mail the proceeds of the
redeemed account to the shareholder. The shareholder may restore the
share balance to $1,000 or more during the 60-day notice period and
must maintain it at no lower than that minimum to avoid involuntary
redemption.
Third party transactions
If purchases and redemptions of Fund shares are arranged and
settlement is made at an investor's election through a member of the
National Association of Securities Dealers, Inc., other than Scudder
Investor Services, Inc., that member may, at its discretion, charge a
fee for that service.
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Shareholder benefits
Experienced professional management
Scudder, Stevens & Clark, Inc., one of the nation's most experienced
investment management firms, actively manages your Scudder fund
investment. Professional management is an important advantage for
investors who do not have the time or expertise to invest directly in
individual securities.
A team approach to investing
Each of the Funds is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management
process. Team members work together to develop investment strategies
and select securities for the Fund's portfolio. They are supported by
Scudder's large staff of economists, research analysts, traders and
other investment specialists who work in Scudder's offices across the
United States and abroad. Scudder believes its team approach benefits
Fund investors by bringing together many disciplines and leveraging
Scudder's extensive resources.
Donald C. Carleton is Lead Portfolio Manager for Scudder Medium Term
Tax Free Fund and Scudder Managed Municipal Bonds and also serves as
Portfolio Manager for Scudder Tax Free Money Fund, Scudder High Yield
Tax Free Fund and Scudder Limited Term Tax Free Fund. Mr. Carleton has
been a portfolio manager at Scudder since he joined the firm in 1983.
M. Ashton Patton, Lead Portfolio Manager for Scudder Limited Term Tax
Free Fund, has overseen the Fund's investment strategy and daily
operations since the Fund was introduced in 1994. Ms. Patton, who
joined Scudder in 1986 and has been a portfolio manager since 1990, is
also a Portfolio Manager for the Scudder Medium Term Tax Free Fund.
Philip Condon, Lead Portfolio Manager for Scudder High Yield Tax Free
Fund, has had responsibility for the Fund's daily operation since its
inception in 1987. Mr. Condon joined Scudder in 1983 and also serves
as Portfolio Manager for Scudder Managed Municipal Bonds.
K. Sue Cote, Lead Portfolio Manager for Scudder Tax Free Money Fund,
joined Scudder in 1983 as a research assistant and assumed
responsibility for the Fund's investment strategy and operations in
1986.
SAIL(tm) -- Scudder Automated Information Line
For personalized account information including fund prices, yields and
account balances, to perform transactions in existing Scudder fund
accounts, or to obtain information on any Scudder fund, shareholders
can call Scudder's Automated Information Line (SAIL) at
1-800-343-2890, 24 hours a day. During periods of extreme economic or
market changes, or other conditions, it may be difficult for you to
effect telephone transactions in your account. In such an event you
should write to the Fund; please see "How to contact Scudder" for the
address.
Investment flexibility
Scudder offers toll-free telephone exchange between funds at current
net asset value. You can move your investments among money market,
income, growth, tax-free and growth and income funds with a simple
toll-free call or, if you prefer, by sending your instructions through
the mail or by fax. Telephone and fax redemptions and exchanges are
subject to termination and their terms are subject to change at any
time by the Fund or the transfer agent. In some cases, the transfer
agent or Scudder Investor Services, Inc. may impose additional
conditions on telephone transactions.
Dividend reinvestment plan
You may have dividends and distributions automatically reinvested in
additional Fund shares. Please call 1-800-225-5163 to request this
feature.
Shareholder statements
You receive a detailed account statement every time you purchase or
redeem shares. All of your statements should be retained to help you
keep track of account activity and the cost of shares for tax
purposes.
Shareholder reports
In addition to account statements, you receive periodic shareholder
reports highlighting relevant information, including investment
results and a review of portfolio changes.
To reduce the volume of mail you receive, only one copy of most Fund
reports, such as the Fund's Annual Report, may be mailed to your
household (same surname, same address). Please call 1-800-225-5163 if
you wish to receive additional shareholder reports.
Newsletters
Four times a year, Scudder sends you Perspectives, an informative
newsletter covering economic and investment developments, service
enhancements and other topics of interest to Scudder fund investors.
Scudder Funds Centers
As a convenience to shareholders who like to conduct business in
person, Scudder Investor Services, Inc. maintains Funds Centers in
Boca Raton, Boston, Chicago, Cincinnati, Los Angeles, New York,
Portland (OR), San Diego, San Francisco and Scottsdale.
T.D.D. service for the hearing impaired
Scudder's full range of investor information and shareholder services
is available to hearing impaired investors through a toll-free T.D.D.
(Telephone Device for the Deaf) service. If you have access to a
T.D.D., call 1-800-543-7916 for investment information or specific
account questions and transactions.
Scudder tax-advantaged retirement plans
Scudder offers a variety of tax-advantaged retirement plans for
individuals, businesses and non-profit organizations. These flexible
plans are designed for use with the Scudder Family of Funds (except
Scudder tax-free funds, which are inappropriate for such plans).
Scudder Funds offer a broad range of investment objectives and can be
used to seek almost any investment goal. Using Scudder's retirement
plans can help shareholders save on current taxes while building their
retirement savings.
o Scudder No-Fee IRA
o Keogh Plans
o 401(k) Plans
o Profit Sharing and Money Purchase Pension Plans
o 403(b) Plans
o SEP-IRA
o Scudder Horizon Plan (a variable annuity)
Scudder Trust Company (an affiliate of the Adviser) is Trustee or
Custodian for some of these plans and is paid an annual fee for some
of the above retirement plans. For information about establishing a
Scudder No-Fee IRA, SEP-IRA, Profit Sharing Plan, Money Purchase
Pension Plan or a Scudder Horizon Plan, please call 1-800-225-2470.
For information about 401(k)s or 403(b)s please call 1-800-323-6105.
To effect transactions in existing IRA, SEP-IRA, Profit Sharing or
Pension Plan accounts, call 1-800-225-5163.
The variable annuity contract is provided by Charter National Life
Insurance Company (in New York State, Intramerica Life Insurance
Company [S 1802]). The contract is offered by Scudder Insurance
Agency, Inc. (in New York State, Nevada and Montana, Scudder Insurance
Agency of New York, Inc.). CNL, Inc. is the Principal Underwriter.
Scudder Horizon Plan is not available in all states.
Trustees and Officers
David S. Lee*
President and Trustee
Juris Padegs*
Vice President (2) and Trustee
Daniel Pierce*
Vice President and Trustee (1)
Henry P. Becton, Jr.
Trustee (1); President and General Manager, WGBH Educational
Foundation
E. Michael Brown*
Trustee (2)
Dawn-Marie Driscoll
Trustee; Attorney and Corporate Director
Peter B. Freeman
Trustee; Corporate Director and Trustee
Dudley H. Ladd*
Trustee (1)
George M. Lovejoy, Jr.
Trustee (1,2); President, Fifty Associates
Wesley W. Marple, Jr.
Trustee (1,3); Professor of Business Administration, Northeastern
University College of Business Administration
Jean C. Tempel
Trustee (2,3); General Partner, TL Ventures
Donald C. Carleton*
Vice President
Philip G. Condon*
Vice President (1)
K. Sue Cote*
Vice President (2)
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
M. Ashton Patton*
Vice President (3)
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Coleen Downs Dinneen*
Assistant Secretary
(1) Scudder Municipal Trust
(2) Scudder Tax Free Money Fund
(3) Scudder Tax Free Trust
All funds unless otherwise indicated.
* Scudder, Stevens & Clark, Inc.
Investment products and services
The Scudder Family of Funds
Money market
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
Tax free money market+
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax free+
Scudder California Tax Free Fund*
Scudder High Yield Tax Free Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder Medium Term Tax Free Fund
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
Income
Scudder Emerging Markets Income Fund
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Growth
Scudder Capital Growth Fund
Scudder Development Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder Value Fund
The Japan Fund
----------------------------------------------------------------------
Retirement Plans and Tax-Advantaged Investments
IRAs
Keogh Plans
Scudder Horizon Plan*+++ (a variable annuity)
401(k) Plans
403(b) Plans
SEP-IRAs
Profit Sharing and Money Purchase Pension Plans
----------------------------------------------------------------------
Closed-end Funds#
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities Fund, Inc.
----------------------------------------------------------------------
Institutional Cash Management
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(tm)++
----------------------------------------------------------------------
For complete information on any of the above Scudder funds, including
management fees and expenses, call or write for a free prospectus.
Read it carefully before you invest or send money. +A portion of the
income from the tax-free funds may be subject to federal, state and
local taxes. *Not available in all states. +++A no-load variable
annuity contract provided by Charter National Life Insurance Company
and its affiliate, offered by Scudder's insurance agencies,
1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark,
Inc., are traded on various stock exchanges. ++For information on
Scudder Treasurers Trust(tm), an institutional cash management service
that utilizes certain portfolios of Scudder Fund, Inc. ($100,000
minimum), call: 1-800-541-7703.
How to contact Scudder
Account Service and Information:
For existing account service and transactions
Scudder Investor Relations
1-800-225-5163
For personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund
Scudder Automated Information Line (SAIL)
1-800-343-2890
Please address all correspondence to:
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
Investment Information:
To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions
Scudder Investor Relations
1-800-225-2470
For establishing 401(k) and 403(b) plans
Scudder Defined Contribution Services
1-800-323-6105
Or Stop by a Scudder Funds Center :
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you -- they
can be found in the following cities:
Boca Raton
Boston
Chicago
Cincinnati
Los Angeles
New York
Portland, OR
San Diego
San Francisco
Scottsdale
For information on Scudder Treasurers Trust(tm), an institutional cash
management service for corporations, non-profit organizations and
trusts which utilizes certain portfolios of Scudder Fund, Inc.*
($100,000 minimum), call: 1-800-541-7703.
For information on Scudder Institutional Funds*, funds designed to
meet the broad investment management and service needs of banks and
other institutions, call: 1-800-854-8525.
Scudder Investor Relations and Scudder Funds Centers are services
provided through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees
and expenses. Please read it carefully before you invest or send
money.
----------------------------------------------------------------------
Contact Scudder
