[Image] Scudder High Yield Tax Free Fund Profile [Image]
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The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
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Fund Profile
July 1, 1997
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1. What Is The Fund's Objective?
Scudder High Yield Tax Free Fund seeks to provide a high level of
income, exempt from regular federal income tax from an actively
managed portfolio of municipal securities.
2. What Does The Fund Invest In?
At least 80% of the Fund's net assets, and normally 100% of its
portfolio assets, will be invested in municipal securities, the
interest income from which is free from regular federal income tax.
The Fund will invest at least 50% of its assets in municipal bonds
rated, at the time of purchase, within the four highest quality rating
categories of Moody's Investors Service, Inc. (Aaa, Aa, A or Baa),
Standard & Poor's or Fitch Investor's Service, Inc. (AAA, AA, A or
BBB), or their equivalents as determined by the Fund's investment
adviser, Scudder, Stevens & Clark, Inc.
The Fund may invest, however, up to 50% of its total assets in bonds
rated below Baa by Moody's or below BBB by S&P or Fitch (i.e., "junk
bonds"), 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.
The Fund may invest more than 25% of its assets in industrial
development or other private activity bonds. The Fund normally expects
to invest principally in municipal securities with long-term
maturities (i.e., more than 10 years) but may invest in short- and
medium-term municipal securities as well. The Fund may invest more
than 20% of its total assets in taxable securities during periods
which require a defensive position.
3. What Are The Risks Of Investing In The Fund?
The Fund's share price and yield may fluctuate daily in response to
changing bond market conditions. In addition, changes in fiscal and
monetary policies, interest rate levels and general economic
conditions may affect the Fund's share price and yield. Furthermore,
the Fund's holdings in unrated securities and securities rated below
investment-grade (i.e., "junk bonds") carry a greater risk of default
and more price volatility than securities rated investment-grade.
These types of securities are especially subject to adverse changes in
general economic conditions, to changes in the financial conditions of
their issuers, and to price fluctuation in response to changes in
interest rates. You incur principal risk when you invest because your
shares, when sold, may be worth more or less than what you paid for
them.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking potentially high
tax free yields and:
o the opportunity for higher yields than those normally offered by
a fund emphasizing only the highest-quality bonds,
o can tolerate fluctuations in share price, and
o have or plan to have other investments for the benefit of
diversification.
Depending on your tax bracket and individual situation, you may earn a
substantially higher after-tax return from this Fund than from
comparable investments whose income is subject to federal taxes.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder High Yield Tax Free Fund are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses (after expense maintenance) --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below are for the fiscal year ended December 31,
1996, during which Scudder maintained the total annualized expenses
of the Fund at not more than 0.80% of average daily net assets from
January 1, 1996 to April 30, 1996. Had Scudder not done so, expenses
would have amounted to the figures set out below.
Investment management fee (after waiver) 0.68%
12b-1 fees None
Other expenses 0.27%
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Total Fund operating expenses 0.95%
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Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$10 $30 $53 $117
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above 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.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed since it commenced
operations on January 22, 1987, assuming reinvestment of all
distributions. Performance is historical and may not be indicative of
future results. Total return and principal value will fluctuate. The
Fund's 30-day net annualized SEC yield on June 30, 1997 was 5.13%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA:
1988 13.48%
1989 10.32
1990 6.02
1991 13.46
1992 10.88
1993 13.85
1994 -8.38
1995 19.28
1996 4.43
The Fund's Average Annual Total Return
for the period ended June 30, 1997
One Year 10.06%
Five Years 7.21%
Ten Years 8.54%
If the adviser had not maintained the Fund's expenses, average annual
total return for the one year, five year and life of Fund periods
would have been lower.
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is managed by a team of Scudder
investment professionals who each play an important role in the Fund's
management process.
Lead Portfolio Manager Philip Condon has had responsibility for the
Fund's day-to-day operations since its inception in 1987. Mr. Condon
joined Scudder in 1983. Donald C. Carleton, Portfolio Manager, has
been a portfolio manager at Scudder since he joined the firm in 1983.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is $2,500,
except that shareholders may open an account with at least $1,000 if
an automatic investment plan of $100/month is established. Scudder
retirement plans and certain other accounts have similar or lower
minimum share balance requirements. A shareholder who maintains an
account balance of less than $2,500 without establishing an automatic
investment plan, will be assessed an annual fee of $10.00, payable to
the Fund. Retirement accounts and certain other accounts will not be
assessed the $10.00 charge. You may also exchange Fund shares free of
charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by telephone, fax, or mail.
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. Capital gains
distributions, if any, will be made in November or December. You may
elect to 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 the 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.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
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[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about the Fund. If you would
like more information before you invest, please consult the Fund's
accompanying prospectus. For details about the Fund's holdings or
recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.
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