Scudder Tax Free Money Fund
Annual Report
December 31, 1996
Pure No-Load(TM) Funds
A money market fund offering opportunities for tax-free income and stability of
principal from high-quality, short-term tax-exempt securities.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
4 Portfolio Management Discussion
7 Investment Portfolio
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
19 Report of Independent Accountants
20 Tax Information
21 Shareholder Meeting Results
25 Officers and Trustees
26 Investment Products and Services
27 How to Contact Scudder
In Brief
o As of December 31, 1996, Scudder Tax Free Money Fund provided a higher
after-tax yield than the average taxable money fund. The Fund's 3.30% 7-day
net annualized yield translated into a 5.16% fully taxable yield for those
in the 36% tax bracket. The average 7-day yield for taxable money funds was
4.90% for the same period, according to IBC's Money Fund Report.
o The Fund's total return for the period was 2.91%, in keeping with the 2.93%
average return of the 133 tax-free money funds tracked by Lipper Analytical
Services.
o As of December 31, the Fund's average maturity stood at a relatively
neutral 56 days, compared with 51 days for the average tax free money fund
tracked by IBC.
2 - Scudder Tax Free Money Fund
<PAGE>
Letter From the Fund's President
Dear Shareholders,
We hope you enjoy our newly redesigned shareholder report. The new format
is designed to enhance the attractiveness and readability of the reports. Let us
know what you think.
This annual report for Scudder Tax Free Money Fund covers a period of
strength for both the U.S. economy and stock market. The economy has been
experiencing an expansion of record length, and while a mild recession would not
be a surprise this year, there are few reasons to question the economy's
long-term strength. While the financial markets will always surge and dip in
response to short-term indicators, we believe many long-term structural factors
such as deregulation, globalization, and technology are setting the stage for an
extended period of global economic growth without harmful levels of inflation.
As such, we don't expect the Federal Reserve to raise interest rates any time
soon, although it remains a possibility.
Money market funds generally provided attractive returns during 1996 for
those investors seeking a stable share price and an interest-paying alternative
to cash. Money funds consistently attracted investor interest, ending the year
at approximately $910 billion in total assets. Scudder Tax Free Money Fund
posted a 3.30% 7-day net annualized yield as of December 31, 1996.
Money market funds remain an important part of any well-balanced portfolio,
providing both a convenient parking place for cash savings and a haven from the
market's short-term fluctuations. Regardless of the economic environment,
Scudder Tax Free Money Fund will seek to maintain its $1.00 share price and
income free from federal taxes.
I'd like to highlight an innovative new product Scudder launched recently
called Scudder Pathway Series. A "fund of funds," Pathway Series is a collection
of four distinct mutual fund portfolios -- Conservative, Growth, Balanced, and
International -- that offers flexibility, diversification, and simplicity. Each
portfolio invests in a select mix of Scudder Funds designed to help achieve a
specific investment objective. For more information on Scudder Fund products and
services, please turn to page 26. Should you have any questions about your Fund
or investments, please contact a Scudder Investor Relations representative at
1-800-225-2470, or access our Web site at http://funds.scudder.com.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder Tax Free Money Fund
3 - Scudder Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
1996 provided money market investors with respectable yields, although a much
anticipated increase in short-term interest rates failed to materialize due
primarily to continued low inflation and moderate economic growth. These factors
bode well for the U.S. economy, and also increase the likelihood of
comparatively high inflation-adjusted yields overall. Scudder Tax Free Money
Fund provided a 3.30% 7-day net annualized yield as of December 31, 1996, which
translates into a 5.16% fully taxable yield for those in the 36% tax bracket.
The average 7-day yield for taxable money funds, by comparison, was 4.90% for
the same period, according to IBC's Money Fund Report. The Fund's total return
for the period was 2.91%, compared with the 2.93% average return of the 133
tax-free money funds tracked by Lipper Analytical Services.
Money Markets Provide Haven in 1996
1996 was a noteworthy year for U.S. stocks, with diminished enthusiasm for bonds
as a result. The S&P 500 Index increased almost 23% for the year, despite wide
vacillations in investor sentiment. In July, for instance, stock returns were
hit hard by inflation fears arising from surprisingly strong economic
indicators. Bond returns for the year were generally mediocre, as long-term
rates ended the year higher, but ratcheted down somewhat over the last six
months of 1996.
Money market funds provided a haven for those uncomfortable with the market's
short-term gyrations, as well as for those who desired a convenient resting
place for their savings. During the year, more than $135 billion flowed into
money funds overall, with industry-wide money fund assets reaching $910 billion
by the end of December.
Money market fund managers spent much of the year with their eyes on the Federal
Reserve, anticipating a potential interest rate hike. As a result, many money
funds defensively shortened their average maturities. Once the Federal Reserve
declined to raise rates in September, sentiment shifted and money fund managers
began extending maturities to capture higher yields.
Portfolio Maintains Neutral Stance
After the Federal Reserve increased short-term interest rates in February, we
began increasing the Fund's average maturity. Market uncertainty caused us to
remain fairly neutral during most of the year, however, as investors prepared
for a hike in short-term rates that never materialized. While we were not
convinced that a rate increase was imminent, we were forced to respond to market
volatility by taking a slightly defensive position. The tradeoff was the lost
opportunity to capture the superior yields offered by longer-maturity
instruments. Once we felt comfortable extending the Fund's average maturity in
September, instruments with longer maturities offered only modest additional
value when compared with more liquid investments available in the marketplace.
4 - Scudder Tax Free Money Fund
<PAGE>
Despite these factors, the Fund continued to post competitive returns during the
year. We continue our search for federally tax-free securities at the longer end
of the maturity spectrum that offer the opportunity to lock in attractive
yields. As of December 31, the Fund's average maturity stood at a neutral 56
days, compared with 51 days for the average tax-free money fund.
At the close of the period, 60% of the Fund was invested in tax-exempt variable
rate demand notes. These very short term securities pay interest at current
market levels and return their entire face value when redeemed, which affords
the Fund a great deal of liquidity and price stability.
A significant portion of the Fund's portfolio (20%) was invested in tax-exempt
commercial paper, much of it in the 35- to 40-day maturity range. Although these
instruments provide less liquidity than shorter-term instruments, they offer the
opportunity to lock in some attractive yields. Moreover, there is an abundance
of liquidity in the rest of the Fund's holdings that allows us the flexibility
to react quickly to interest rate fluctuations if necessary.
The Coming Months
Absent any unforeseen shocks, 1997 should provide investors with moderate
economic growth, stable to higher stock prices, and uncertainty with respect to
interest rates. While always a possibility, we don't expect the Federal Reserve
to lower short-term interest rates any time soon.
5 - Scudder Tax Free Money Fund
<PAGE>
In this environment, we plan to favor money market securities that offer good
relative value across the maturity spectrum. Our focus will remain on quality as
we select investments to maintain Scudder Tax Free Money Fund's stable share
price and competitive yield, with the added benefit of federally tax-free
income. We believe Scudder Tax Free Money Fund continues to offer a relatively
safe vehicle for meeting your short-term investment needs.
Please call a Scudder representative at 1-800-225-2470 should you have any
questions about your Fund. Thank you for choosing Scudder Tax Free Money Fund.
Sincerely,
Your Portfolio Management Team
/s/K. Sue Cote /s/Donald C. Carleton
K. Sue Cote Donald C. Carleton
Scudder Tax Free
Money Fund:
A Team Approach to Investing
Scudder Tax Free Money Fund 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. They are supported by Scudder's large staff of
economists, research analysts, traders, and other investment specialists who
work in our 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.
Lead Portfolio Manager K. Sue Cote, who joined Scudder in 1983, assumed
responsibility for the Fund's investment strategy and operations in 1986 and has
over 10 years of experience in short-term tax free investing. Donald C.
Carleton, Portfolio Manager, has worked on the Fund since 1986 and has 26 years
of experience in tax-free investing.
Your Portfolio Management Team: K. Sue Cote
and Donald C. Carleton (photographs)
6 - Scudder Tax Free Money Fund
<PAGE>
Investment Portfolio as of December 31, 1996
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- -----------------------------------------------------------------------------------------------------------------------------
Municipal Investments 100.0%
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alabama
Montgomery, AL, Pollution Control and Solid Waste, General Electric Co.
Project, Series 1990, Tax Exempt Commercial Paper, 3.55%, 2/24/97 ............... 850,000 A1+ 850,000
Phenix City, AL, Industrial Development Bond, Mead Coated Board Project, Daily
Demand Note, 5.1%, 10/1/25* ..................................................... 600,000 A1 600,000
Alaska
Alaska Housing Finance Corp., General Mortgage Revenue, Series 1991~A, Weekly
Demand Note, 4.3%, 6/1/26* ...................................................... 10,000,000 A1+ 10,000,000
Valdez, AK, Marine Terminal, ARCO Transportation Alaska Inc. Project,
Series 1994A, Tax Exempt Commercial Paper, 3.55%, 2/20/97 ....................... 1,200,000 MIG1 1,200,000
Arizona
Apache County, AZ, Industrial Development Revenue, Tuscon Electric Co.,
Springerville Project, Series 1985 A, Weekly Demand Note, 4.1%, 12/1/20* ........ 1,500,000 A1+ 1,500,000
Maricopa County, AZ, Industrial Development Authority, Royal Oaks Sun City
Project, Weekly Demand Note, 4.15%, 9/1/02* ..................................... 200,000 MIG1 200,000
Maricopa County, AZ, Pollution Control Revenue, Palos Verde Project,
Series 1985F, Tax Exempt Commercial Paper, 3.55%, 2/11/97 ....................... 1,500,000 A1 1,500,000
Pima County, AZ, Industrial Development Authority, Tucson Electric Power Co.
Series 1982 A, Weekly Demand Note, 4.1%, 7/1/22* ................................ 2,100,000 A1+ 2,100,000
Salt River, AZ, Agricultural Improvement District, Tax Exempt Commercial Paper,
3.55%, 2/20/97 .................................................................. 3,000,000 A1+ 3,000,000
California
City of Riverside, CA, Countrywood Apartments, Multi~Family Revenue, Series
1985D, Weekly Demand Bonds, 4.025%, 5/1/05* ..................................... 1,000,000 SS&C 1,000,000
Huntington Beach, CA, Multi~Family Housing Revenue, River Meadows Apartments,
Series B, Weekly Demand Bonds, 4.125%, 10/1/05* ................................. 1,700,000 SS&C 1,700,000
Lancaster, CA, Willows Project Series, Weekly Demand Bonds, 4.15%, 2/1/05* ........ 8,650,000 A1+ 8,650,000
Los Angeles County, CA, Tax And Revenue Anticipation Notes, Series 1996 A, 4.5%,
6/30/97 ......................................................................... 3,000,000 MIG1 3,009,257
Riverside, CA, Multi~Family Housing Revenue, Polk Apartments, Weekly Demand
Note, 4.0%, 12/1/05* ............................................................ 2,000,000 A1 2,000,000
Colorado
Northglenn, CO, Industrial Development Revenue, 4%, 1/1/09* ....................... 1,400,000 MIG1 1,400,000
District Of Columbia
District of Columbia, General Fund Recovery, Series B~3, Daily Demand Note,
5.1%, 6/1/03* ................................................................... 800,000 A1+ 800,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
7 - SCUDDER TAX FREE MONEY FUND
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
District of Columbia, General Obligation, General Fund Recovery, Series B, Daily
Demand Note, 5.1%, 6/1/03* ...................................................... 1,000,000 MIG1 1,000,000
Florida
Broward County, FL, Housing Finance Authority, Welleby Apartments Project, Weekly
Demand Note, 4.25%, 12/1/06* .................................................... 1,000,000 MIG1 1,000,000
City of Gainsville, FL, Utilities System, Series C, Tax Exempt Commercial Paper:
3.45%, 2/20/97 .................................................................. 1,600,000 A1+ 1,600,000
3.4%, 3/10/97 ................................................................... 2,000,000 A1+ 2,000,000
Dade County, FL, Water and Sewer System Revenue, Series 1994, Weekly Demand
Note, 4.0%, 10/5/22 (c)* ........................................................ 2,100,000 A1+ 2,100,000
Jacksonville, FL, Pollution Control Revenue, Florida Power and Light, Series 1994,
Tax Exempt Commercial Paper, 3.65%, 1/7/97 ...................................... 1,000,000 MIG1 1,000,000
Putnam County, FL, Pollution Control Revenue, Seminole Electric Cooperative
Finance Corp., 1984 Series H~2, Weekly Demand Note, 4.15%, 3/15/14* ............. 2,550,000 A1+ 2,550,000
Sarasota County, FL, Public Hospital District, Sarasota Memorial Hospital,
Series 1993A, Tax Exempt Commercial Paper, 3.7%, 2/18/97 ........................ 2,000,000 A1 2,000,000
Georgia
DeKalb Private Hospital Authority, Egleston Children's Hospital at Emory
University, Series 1994 B, Weekly Demand Note, 4.15%, 3/1/24* ................... 5,000,000 A1+ 5,000,000
Georgia Municipal Gas Authority Revenues, Southern Portfolio I, Project C,
Tax Exempt Commercial Paper 3.62%, 1/8/97 ....................................... 3,700,000 MIG1 3,700,000
Idaho
Idaho State Tax Anticipation Notes, Series 1996, 4.5%, 6/30/97 .................... 3,000,000 MIG1 3,008,539
Illinois
Illinois Development Finance Authority, Molex Inc. Project, Series 1985, Weekly
Demand Note, 4.15%, 7/1/05* ..................................................... 1,000,000 SS&C 1,000,000
Illinois Educational Facilities Authority, University Pooled Finance Program,
Weekly Demand Note, 4.25%, 12/1/05 (c)* ......................................... 2,275,000 MIG1 2,275,000
Illinois Health Facilities Authority, Rush Presbyterian St. Lukes Hospital,
Series 1989 A, Tax Exempt Commercial Paper, 3.45%, 3/5/97 ....................... 2,500,000 A1+ 2,500,000
Pekin, IL, Industrial Development Revenue Refunding Bonds, BOC Group, Series
1992, Weekly Demand Note, 4.15%, 9/1/12* ........................................ 5,000,000 SS&C 5,000,000
Skokie IL, Skokie Fashion Square Weekly Demand Note, Series 1984, 4.125%,
12/1/14* ....................................................................... 2,000,000 MIG1 2,000,000
Indiana
Hoosier Energy Rural Electric Project, Sullivan, IN, Series 1985 L, Tax Exempt
Commercial Paper:
3.7%, 1/21/97 ................................................................. 400,000 A1+ 400,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 - SCUDDER TAX FREE MONEY FUND
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3.6%, 2/25/97 .................................................................. 400,000 A1+ 400,000
Indianapolis, IN, Local Public Improvement Bond Bank Notes, Series 1996 H:
4.125%, 7/10/97 ................................................................. 500,000 SP1+ 501,516
4.125%, 7/10/97 ................................................................. 2,000,000 SP1+ 2,006,065
Kentucky
Kentucky Development Finance Authority, Healthcare System, Appalachian Regional
Health Care, Series 1991, Weekly Demand Note, 4.25%, 9/1/06* .................... 1,600,000 MIG1 1,600,000
Mayfield, KY, Multi~City Lease Revenue Kentucky League of Cities Funding Trust,
Weekly Demand Note, Series 1996, 4.3%, 7/1/26* .................................. 1,400,000 MIG1 1,400,000
Maryland
Anne Arundel County, MD, Baltimore Electric & Gas Company, Tax Exempt
Commercial Paper, 3.6%, 3/5/97 .................................................. 3,600,000 A1 3,600,000
Massachusetts
Massachusetts Bay Transportation Authority Notes, Massachusetts Series B, 4.75%,
9/5/97 .......................................................................... 1,000,000 SP1 1,005,204
Michigan
Wayne Charter County, MI, Airport Revenue, Detroit Metropolitan County,
Series 1996B, Weekly Demand Note, 4.1%, 12/1/16* ................................ 3,000,000 MIG1 3,000,000
Minnesota
Cottage Grove, MN, Minnesota Mining and Manufacturing, Series 1982, Weekly
Demand Note, 4.22%, 8/1/12* ..................................................... 1,100,000 A1+ 1,100,000
Rochester, MN, Health Care Facility, Mayo Foundation, Mayo Medical Center,
Series 1992C, Tax Exempt Commercial Paper, 3.6%, 1/23/97 ........................ 1,300,000 A1+ 1,300,000
Missouri
Missouri HEFA School District Advance Funding Notes, Series 1996 C, Kansas City
School District, 4.5%, 9/8/97 ................................................... 2,000,000 SP1+ 2,007,918
Missouri State Health and Educational Facilities Authority, Health Facilities
Revenue, Sisters of Mercy, Weekly Demand Note, 4.2%, 6/1/19* .................... 3,000,000 MIG1 3,000,000
St. Charles County, MO, Industrial Development Authority, Multi~Family Housing,
Sun River Apartments, Weekly Demand Note, 4.15%, 12/1/07* ....................... 3,200,000 MIG1 3,200,000
Montana
Montana State General Obligation Unlimited, Tax and Revenue Anticipation Notes,
Series 1996, 4.5%, 6/27/97 ...................................................... 2,000,000 MIG1 2,007,806
New Jersey
Salem County, NJ, Industrial Pollution Control Financing Authority, E.I. du
Pont de Nemours and Co., Floating Rate Demand Note, 3.65%, 3/1/12* .............. 11,400,000 P1 11,400,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - SCUDDER TAX FREE MONEY FUND
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New Mexico
Albuquerque, NM, Gross Receipts/Lodgers Tax, Series 1991 Weekly Demand Note,
4.1%, 7/1/22* ................................................................... 1,000,000 A1+ 1,000,000
New York
New York City, NY, General Obligation, Revenue Anticipation Notes, Series
1996 B, 4.5%, 6/30/97 ........................................................... 5,000,000 MIG1 5,019,487
New York City, NY, General Obligation Series 1994H~3, Tax Exempt Commercial
Paper, 3.5%, 2/11/97 (c) ........................................................ 1,500,000 A1+ 1,500,000
North Dakota
Mercer County, ND, Pollution Control Revenue, Cooperative Finance Corp., United
Power, Weekly Demand Note, 4.15%, 8/15/14* ...................................... 3,050,000 A1 3,050,000
Ohio
Hamilton County, OH, Economic Development Revenue, Cincinnati Performing Arts
Center, Series 1995, Weekly Demand Note, 4.2%, 6/15/05* ......................... 635,000 SS&C 635,000
Solon, OH, School District Bond Anticipation Notes, Series 1996~2, 4.0%, 4/15/97
3,000,000 SS&C 3,004,406
Oregon
Oregon General Obligation, Veterans Welfare, Series 1973~E , Weekly Demand Note,
4.05%, 12/1/16* ................................................................. 1,600,000 MIG1 1,600,000
Pennsylvania
Bucks County, PA, Oxford Falls Plaza, Series 1984, Weekly Demand Note, 4.25%,
10/1/14* ........................................................................ 9,100,000 MIG1 9,100,000
Elk County PA, Industrial Development Authority, 3.795%, 3/1/04* .................. 1,000,000 SS&C 1,000,000
Emmaus, PA, General Authority Local Government, Revenue Bond Pool Program,
Weekly Demand Note:
4.15%, 3/1/24* ................................................................. 2,500,000 A1+ 2,500,000
Series 1989 G, 4.15%, 3/1/24* .................................................. 3,700,000 A1+ 3,700,000
Series 1989 G~5, 4.2%, 3/1/24* ................................................. 4,000,000 A1 4,000,000
Erie County, PA, Tax Anticipation Notes, Series 1997, 4.25%, 12/31/97 ............. 5,000,000 SS&C 5,012,000
Philadelphia, PA, Tax and Revenue Anticipation Notes, 4.5%, 6/30/97 ............... 2,000,000 MIG1 2,005,211
Philadelphia, PA, School District Tax and Revenue Anticipation Notes,
Series 1996~1997, 4.5%, 6/30/97 ................................................. 5,000,000 SP1 5,011,871
Puerto Rico
Puerto Rico Commonwealth, Tax and Revenue Anticipation Notes, Series 1996, 4.0%,
7/30/97 ......................................................................... 2,000,000 MIG1 2,006,440
South Carolina
Berkley County, SC, General Obligation, Refunding and Improvement Bonds, 6.7%,
5/1/97 (c) ...................................................................... 780,000 AAA 787,101
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - SCUDDER TAX FREE MONEY FUND
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
South Carolina Public Service Authority, Revenue Promissory Notes, Tax Exempt
Commercial Paper, 3.45%, 3/5/97 ................................................. 3,500,000 P1 3,500,000
Tennessee
Franklin, TN, Industrial Development Revenue, Franklin Oaks Apartments, Weekly
Demand Note, 4.25%, 12/1/07* .................................................... 6,100,000 MIG1 6,100,000
Texas
Angelina & Neches River Authority of Texas, IDC, Solid Waste Disposal,
1984 Series D, Daily Demand Note, 5.0%, 5/1/14* ................................. 700,000 MIG1 700,000
Board of Regents, University of Texas, System University Fund, Series 1994A,
Tax Exempt Commercial Paper, 3.7%, 1/21/97 ...................................... 3,000,000 MIG1 3,000,000
Brazos, TX, Harbor Institutional Project, Series 1986, Tax Exempt Commercial
Paper, 3.45%, 3/5/97 ............................................................ 600,000 A1 600,000
Camp County, TX, Industrial Development, Pollution Control Revenue, Texas Oil &
Gas Corp., Floating Rate Demand Bond, 4.3%, 12/1/13* ............................ 2,000,000 A1 2,000,000
Gulf Coast Waste Disposal Authority, Texas, Exxon Project, Tax Exempt Commercial
Paper, 3.6%, 1/14/97 ............................................................ 2,000,000 MIG1 2,000,000
Harris County TX, Toll Road, Series 1994 G, Weekly Demand Note, 4.0%, 8/1/20* ..... 1,000,000 A1+ 1,000,000
Harris County, TX, Tax Anticipation Notes, Series 1996, 4.5%, 2/28/97 ............. 2,000,000 MIG1 2,002,299
Port Development Corp., TX, Marine Terminal Refunding Revenue, Stolt Terminals,
Series 1989, Weekly Demand Note, 4.0%, 1/15/14* ................................. 1,500,000 A1+ 1,500,000
San Antonio, TX, Electric & Gas City Public Services, Series 1995A, Tax Exempt
Commercial Paper:
3.5%, 1/28/97 .................................................................. 2,000,000 A1+ 2,000,000
3.55%, 2/13/97 ................................................................. 2,000,000 A1+ 2,000,000
San Antonio, TX, Industrial Development Authority, River Center Associates
Project, Weekly Demand Note, 4.1%, 12/1/12* ..................................... 6,300,000 A1 6,300,000
State of Texas, General Obligation, Veterans Housing Assistance Refunding Bonds,
Series 1995, Weekly Demand Note, 4.0%, 12/1/16* ................................. 1,000,000 A1+ 1,000,000
Texas Association of School Boards, Certificates of Participation, Tax
Anticipation Notes, Series 1996, 4.75%, 8/29/97 (c) ............................. 1,000,000 MIG1 1,005,202
Texas Tax and Revenue Anticipation Notes, Series 1996, 4.75%, 8/29/97 ............. 8,000,000 SP1+ 8,055,014
Utah
Salt Lake City, UT, Pooled Hospital Financings, Tax Exempt Commercial Paper,
3.45%, 2/10/97 .................................................................. 3,600,000 A1+ 3,600,000
Virginia
Peninsula Port Authority, VI, Coal Terminal Revenue, Dominion Terminal
Project, Daily Demand Note, 4.85%, 7/1/16* ...................................... 600,000 A1+ 600,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - SCUDDER TAX FREE MONEY FUND
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
York County, VI, Pollution Control Revenue, Virginia Electric Power Company,
Series 1985, Tax Exempt Commercial Paper, 3.8%, 1/15/97 ......................... 1,400,000 MIG1 1,400,000
Washington
Washington Health Care Facilities Authority, Sisters of Providence,
Daily Demand Note:
Series 1985 B, 5.0%, 10/1/05* .................................................. 300,000 A1+ 300,000
Series 1985~E, 5.0%, 10/1/05* .................................................. 600,000 A1+ 600,000
Washington Health Care Facilities Authority, Fred Hutchinson Cancer Research
Center, Series~A, Daily Demand Note, 5.25%, 1/1/18* ............................. 1,000,000 MIG1 1,000,000
Washington State Public Power Supply System, Nuclear Project #1, Series 1993
1 A-1, Weekly Demand Note, 4.1%, 7/1/17* ....................................... 2,300,000 A1 2,300,000
Wisconsin
Milwaukee, WI, Promissory Notes, General Obligation, Series 1996B~6, 3.8%,
2/15/97 ......................................................................... 2,000,000 AA 2,001,558
Wausau, WI, Pollution Control Revenue, Minnesota Mining and Manufacturing,
Floating Rate Demand Note:
Series 1983, 4.22%, 12/1/01* ................................................... 900,000 SS&C 900,000
Series 1982, 4.22%, 8/1/17* .................................................... 2,300,000 A1+ 2,300,000
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio ~ 100.0% (Cost $223,866,894) (a) 223,866,894
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $223,866,894.
(b) All of the securities held have been determined by the Adviser to be of
appropriate credit quality as required by the Fund's investment
objectives. Credit ratings shown are assigned by either Standard & Poor's
Ratings Group, Moody's Investors Service, Inc. or Fitch Investors Service,
Inc. Securities rated by Scudder (SS&C) have been determined by the
Adviser to be of comparable quality to rated eligible securities.
(c) Bond is insured by one of these companies: FGIC or FSA.
* Floating rate and monthly, weekly, or daily demand notes are securities
whose yields vary with a designated market index or market rate, such as
the coupon~equivalent of the Treasury Bill rate. Variable rate demand
notes are securities whose yields are periodically reset at levels that
are generally comparable to tax~exempt commercial paper. These securities
are payable on demand within seven calendar days and normally incorporate
an irrevocable letter of credit or line of credit from a major bank. These
notes are carried, for purposes of calculating average weighted maturity,
at the longer of the period remaining until the next rate change or to the
extent of the demand period.
The accompanying notes are an integral part of the financial statements.
12 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of December 31, 1996
<TABLE>
<CAPTION>
Assets
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (amortized cost $223,866,894) (Note A) ........... $ 223,866,894
Cash ................................................................... 870,685
Receivable for investments sold ........................................ 65,000
Receivable for Fund shares sold ........................................ 3,135,525
Interest receivable .................................................... 1,440,218
Other assets ........................................................... 6,533
-------------
Total assets ........................................................... 229,384,855
Liabilities
- ----------------------------------------------------------------------------------------------------------
Payable for investments purchased ...................................... $ 8,091,643
Payable for Fund shares redeemed ....................................... 843,569
Dividends payable ...................................................... 54,407
Accrued management fee (Note B) ........................................ 68,404
Other accrued expenses (Note B) ........................................ 81,591
-------------
Total liabilities ...................................................... 9,139,614
----------------------------------------------------------------------------------------
Net assets, at value $ 220,245,241
----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized loss .......................................... (696,110)
Paid-in capital ........................................................ 220,941,351
----------------------------------------------------------------------------------------
Net assets, at value $ 220,245,241
----------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($220,245,241 /
220,070,917 outstanding shares of beneficial interest, $.01 par value, -------------
unlimited number of shares authorized) .............................. $ 1.00
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Statement of Operations
year ended December 31, 1996
<TABLE>
<CAPTION>
Investment Income
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Interest ................................................................ $ 8,085,755
-------------
Expenses:
Management fee (Note B) ................................................. 1,134,327
Services to shareholders (Note B) ....................................... 288,197
Custodian and accounting fees (Note B) .................................. 87,799
Trustees' fees (Note B) ................................................. 38,096
Reports to shareholders ................................................. 46,682
Auditing ................................................................ 39,739
Registration fees ....................................................... 31,463
Legal ................................................................... 14,479
Other ................................................................... 16,632
-------------
Total expenses before reductions ........................................ 1,697,414
Expense reductions (Note B) ............................................. (103,572)
-------------
Expenses, net ........................................................... 1,593,842
-----------------------------------------------------------------------------------------
Net investment income 6,491,913
-----------------------------------------------------------------------------------------
Realized and unrealized gain on investment transactions
- ----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Net realized gain from investments 3,478
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 6,495,391
-----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended December 31,
Increase (Decrease) in Net Assets 1996 1995
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ....................................... $ 6,491,913 $ 7,694,437
Net realized gain (loss) from investment transactions ....... 3,478 (915)
------------- -------------
Net increase in net assets resulting from operations ........ 6,495,391 7,693,522
------------- -------------
Distributions to shareholders from net investment income .... (6,491,913) (7,694,437)
------------- -------------
Fund share transactions at net aset value of $1.00 per share:
Shares sold ................................................. 544,612,524 502,020,783
Shares issued to shareholders in reinvestment of ............ 5,875,747 6,965,743
distributions
Shares redeemed ............................................. (569,334,268) (526,671,999)
------------- -------------
Net decrease in net assets from Fund share transactions ..... (18,845,997) (17,685,473)
------------- -------------
Decrease in net assets ...................................... (18,842,519) (17,686,388)
Net assets at beginning of period ........................... 239,087,760 256,774,148
------------- -------------
Net assets at end of period ................................. $ 220,245,241 $ 239,087,760
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
-------------------------------------------------------------------------------------------------------------------------
<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............... .029 .032 .022 .018 .025 .041 .053 .057 .046 .040
Less distributions from net
investment income................. (.029) (.032) (.022) (.018) (.025) (.041) (.053) (.057) (.046) (.040)
-----------------------------------------------------------------------------------
Net asset value, end of period...... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
-----------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Total Return (%).................... 2.91 3.27 2.26 1.86 2.54 4.20 5.44 5.83 4.73 4.03
Ratios and Supplemental Data
Net assets, end of period
($ millions)....................... 220 239 257 222 267 279 303 279 358 390
Ratio of operating expenses net,
to average daily net assets (%)... .70 .75 .77 .75 .73 .70 .72 .70 .67 .66
Ratio of operating expenses before
expense reductions to average
daily net assets.................. .75 .75 .77 .75 .73 .70 .72 .70 .67 .66
Ratio of net investment income to
average daily net assets (%)...... 2.86 3.21 2.24 1.84 2.53 4.12 5.30 5.67 4.61 4.03
</TABLE>
16 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Tax Free Money Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open~end management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. The Fund values all portfolio securities utilizing the
amortized cost method permitted in accordance with Rule 2a~7 under the
Investment Company Act of 1940, as amended, and pursuant to which the Fund must
adhere to certain conditions. Under this method, which does not take into
account unrealized securities gains or losses, an instrument is initially valued
at its cost and thereafter assumes a constant accretion/amortization to maturity
of any discount/premium.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its income to its shareholders. The Fund accordingly
paid no federal income taxes and no provision for federal income taxes was
required.
As of December 31, 1996, the Fund had a net tax basis capital loss carryforward
of approximately $696,000, which may be applied against any realized net taxable
gains of each succeeding year until fully utilized or until, December 31, 2000
($7,000), December 31, 2001 ($29,000), and December 31, 2002 ($38,000), December
31, 2003 ($78,000), December 31, 2004 ($544,000), the respective expiration
dates, whichever occurs first.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a dividend to shareholders of record as of twelve o'clock noon
each business day and is paid to shareholders monthly. During any particular
year, net realized gains from investment transactions, in excess of available
capital loss carryforwards, would be taxable to the Fund if not distributed and,
therefore, will be distributed to shareholders. An additional distribution may
be made to the extent necessary to avoid the payment of a four percent federal
excise tax.
The Fund uses the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
Other. Investment transactions are accounted for on a trade date basis (which in
most cases is the same as the settlement date). Interest income is accrued pro
rata to maturity. All premiums and discounts are amortized/accreted for both tax
and financial reporting purposes.
B. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Adviser directs the investments of
the Fund in accordance with its investment objectives, policies, and
restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Adviser provides certain
administrative services in accordance with the Agreement. The management fee
payable under the Agreement is equal to an annual rate of 0.50% on the first
$500,000,000 of average daily net assets, and 0.48% of such net assets in excess
of $500,000,000, computed and accrued daily and payable
17 - SCUDDER TAX FREE MONEY FUND
<PAGE>
monthly. The Agreement provides that if the Fund's expenses, exclusive of taxes,
interest, and extraordinary expenses, exceed specified limits, such excess, up
to the amount of the management fee, will be paid by the Adviser. In addition,
effective August 1, 1996, the Adviser has agreed to maintain the annualized
expenses of the Fund at not more than .65% of average daily net assets until
April 30, 1997. For the year ended December 31, 1996, the Adviser imposed fees
amounting to $1,030,755, which was equivalent to an annual effective rate of
.45% of the Fund's average daily net assets. The Adviser did not impose fees
amounting to $103,572.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended December 31, 1996, the amount charged to the Fund by SSC aggregated
$221,703 of which $16,977 is unpaid at December 31, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
December 31, 1996, the amount charged to the Fund by SFAC aggregated $45,463, of
which $3,795 is unpaid at December 31, 1996.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the year ended
December 31, 1996, Trustees' fees and expenses aggregated $38,096.
18 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of the Scudder Tax Free Money Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Tax Free Money Fund, including the investment portfolio, as of December 31,
1996, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the ten years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Tax Free Money Fund as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the ten years in the period then ended, in conformity with generally accepted
accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
January 31, 1997
19 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Tax Information
Of the dividends paid by the Scudder Tax Free Money Fund from net investment
income for the taxable year ended December 31, 1996, 100% were exempt interest
dividends which are tax exempt for purposes of regular federal income tax, and
for purposes of the federal alternative minimum tax.
20 - SCUDDER TAX FREE MONEY FUND
<PAGE>
Shareholder Meeting Results
A special meeting of shareholders of Scudder Tax Free Money Fund was held on
Tuesday, December 10, 1996, at the offices of Scudder, Stevens & Clark, Inc.,
13th floor, Two International Place, Boston, MA. The three matters voted upon by
the shareholders and the resulting votes for each matter are presented below.
1. The election of seven Trustees to hold office until their respective
successors shall have been duly elected and qualified.
<TABLE>
<CAPTION>
Number of Votes:
<S> <C> <C> <C> <C>
Trustee For Withheld Broker Non-Votes*
------- --- -------- ----------------
David S. Lee 111,927,350 1,093,049 0
E. Michael Brown 111,233,395 1,787,003 0
Dawn-Marie Driscoll 111,827,861 1,192,537 0
Peter B. Freeman 111,731,560 1,288,838 0
George M. Lovejoy 111,876,664 1,143,734 0
Kathryn L. Quirk 111,209,474 1,810,924 0
Jean C. Tempel 111,879,847 1,140,552 0
2. Ratification or rejection of the action taken by the Board of Directors in
selecting Coopers & Lybrand L.L.P. as independent accountants for the
fiscal year ending December 31, 1997.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
110,775,096 1,117,083 1,128,219 0
3. Approval or disapproval of the elimination, addition or amendment of
certain fundamental investment policies.
A. Amendments to the Fund's investment restriction with respect to
investments in real estate.
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
102,416,166 10,523,500 47,603 33,129
B. Amendment to the Fund's investment restriction regarding the issuance
of senior securities.
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
103,347,702 9,591,964 47,603 33,129
21 - Scudder Tax Free Money Fund
<PAGE>
C. Amendments to the Fund's investment restriction with respect to
concentration of its assets.
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
103,663,129 9,286,564 37,576 33,129
D. Elimination of the Fund's investment restriction concerning securities
eligible for purchase.
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
103,373,956 9,575,737 37,576 33,129
E. Amendments to the Fund's investment restriction with respect to
municipal securities.
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
103,629,032 9,320,660 37,576 33,129
F. Amendments to the Fund's investment restriction with respect to
diversification.
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
103,778,341 9,171,351 37,576 33,129
</TABLE>
- ----------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
22 - Scudder Tax Free Money Fund
<PAGE>
This page intentionally left blank.
23 - Scudder Tax Free Money Fund
<PAGE>
This page intentionally left blank.
24 - Scudder Tax Free Money Fund
<PAGE>
Officers and Trustees
David S. Lee*
President and Trustee
E. Michael Brown*
Trustee
Dawn-Marie Driscoll
Trustee; Executive Fellow, Center for Business Ethics;
President, Driscoll Associates
Peter B. Freeman
Trustee; Corporate Director and Trustee
George M. Lovejoy, Jr.
Trustee; President and Director, Fifty Associates
Kathryn L. Quirk*
Vice President and Trustee
Jean C. Tempel*
Trustee; General Partner, TL Ventures
Donald C. Carleton*
Vice President
K. Sue Cote*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
- ----------
* Scudder, Stevens & Clark, Inc.
25 - Scudder Tax Free Money Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
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 Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund*
Scudder Massachusetts Limited Term Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
U. S. Income
- ------------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Quality Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
Retirement Programs
- -------------------
IRA
SEP IRA
SIMPLE IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan *+++ +++ (a variable annuity)
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.
- ----------
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. +++Funds within categories are listed from expected
least to most risk. +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.
26 - Scudder Tax Free Money Fund
<PAGE>
How to Contact Scudder
Account Service and Information
- --------------------------------------------------------------------------------
For existing account services and transactions
Scudder Investor Relations -- 1-800-225-5163
For 24 hour account information, fund information, exchanges, and an
overview of all the services available to you
Scudder Electronic Account Services -- http://funds.scudder.com
For information about your Scudder accounts, exchanges and redemptions
Scudder Automated Information Line (SAIL) -- 1-800-343-2890
Investment Information
- --------------------------------------------------------------------------------
For information about the Scudder funds, including additional applications
and prospectuses, or for answers to investment questions
Scudder Investor Relations -- 1-800-225-2470
[email protected]
Scudder's World Wide Web Site -- http://funds.scudder.com
For establishing 401(k) and 403(b) plans
Scudder Defined Contribution Services -- 1-800-323-6105
Scudder Brokerage Services
- --------------------------------------------------------------------------------
To receive information about this discount brokerage service and to
obtain an application
Scudder Brokerage Services* -- 1-800-700-0820
Please address all correspondence to
- --------------------------------------------------------------------------------
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
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 Chicago San Francisco
Boston New York
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.
* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061 --
Member NASD/SIPC.
** 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.
27 - Scudder Tax Free Money Fund
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
Shares of Scudder Tax Free Money Fund 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.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
<PAGE>
