Scudder
Tax Free
Money Fund
Semiannual Report
June 30, 1998
Pure No-Load(TM) Funds
A money market fund offering opportunities for income exempt from regular
federal income tax and stability of principal from high-quality, short-term
municipal securities.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
Scudder Tax Free Money Fund
- --------------------------------------------------------------------------------
Date of Inception: 1/9/80 Total Net Assets as of Ticker Symbol: STFXX
6/30/98: $233.4 million
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o Scudder Tax Free Money Fund provided a positive total return of 1.49% for the
six-month period ended June 30, 1998, while the Fund's 30-day net annualized
yield at the end of June was 3.02%.
o To match the Fund's 3.02% 30-day yield as of June 30, 1998, investors in the
36% and 39.6% tax brackets would have had to earn 4.72% and 5.00%, respectively,
from a taxable money market investment.
o Despite the stability of interest rates, the Fund's average maturity was
gradually shortened toward the end of the period, in anticipation of possible
increases in short-term interest rates in the near future given the continuing
strength of the U.S. economy.
Table of Contents
3 Letter from the Fund's President 17 Financial Highlights
4 Portfolio Management Discussion 18 Notes to Financial Statements
7 Glossary of Investment Terms 20 Officers and Trustees
9 Investment Portfolio 21 Investment Products and Services
14 Financial Statements 22 Scudder Solutions
2 - Scudder Tax Free Money Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to present the semiannual report for Scudder Tax Free Money
Fund for the 6-month period ended June 30, 1998.
During the period covered by this report, the U.S. economy enjoyed ongoing
strength, including a still-climbing stock market, a strong dollar, high
consumer confidence, and low unemployment. Earlier this year the Federal Reserve
worried that the U.S. economy was growing too rapidly, but so far the Fed has
left rates unchanged. Bond prices generally rose during the period and the
30-year Treasury bond yield declined to a new low.
Money market funds generally provided attractive returns during the period
for those investors seeking a stable share price and an interest-paying
alternative to cash. For its most recent semiannual period ended June 30, 1998,
the Fund provided a positive total return of 1.49%. Its 30-day net annualized
yield at the end of June was 3.02%. For more detail on the events of the past 6
months and your managers' outlook for the months ahead, please turn to the
discussion beginning on page 4.
For those of you interested in new Scudder products and services, we would
like to take this opportunity to highlight two upcoming additions to our
international category, both of which are scheduled to begin operations on
September 1st. Scudder International Growth Fund will seek long-term capital
appreciation by investing primarily in the equity securities of non-U.S.
companies with high earnings growth potential, and Scudder International Value
Fund will seek long-term capital appreciation by investing primarily in
undervalued foreign equity securities. For further information on these new
funds, please call 1-800-225-2470.
Thank you for choosing Scudder Tax Free Money Fund to help meet your
investment needs. If you should have any questions regarding your investment, or
any of the Scudder Funds, please do not hesitate to call us at the number above,
or visit our Web site at http://funds.scudder.com.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Tax Free Money Fund
3 - Scudder Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
The U.S. economy continued its lengthy run of prosperity during the first half
of 1998, although toward the end of the period there was some evidence that
perhaps the trend was beginning to weaken. During the six months, the Fund's
investments in short-term, high quality securities provided a balance to more
aggressive stock and bond holdings.
Scudder Tax Free Money Fund provided a positive total return of 1.49% for the
six months ended June 30, 1998. The Fund's 30-day net annualized yield at the
end of June was 3.02%. To match the Fund's yield during the same 30-day time
frame, investors in the 36% and 39.6% tax brackets would have had to earn 4.72%
and 5.00%, respectively, from a comparable taxable investment.
U.S. Economy
Continues Strong
During the period, the domestic economy was encouraged by a number of positive
fundamentals that bolstered the overall investment environment. Consumer
confidence was high and employment was strong, with many new jobs being created
during the period. We experienced two back-to-back quarters of strong GDP growth
in the fourth quarter of 1997 and the first quarter of 1998. Although the
numbers for the most recent quarter ended June 30 are likely to be weaker, we
anticipate that growth will be slightly higher again during the second half of
1998.
The record run in the U.S. stock market, which has now extended over seven
years, showed signs of abating in early 1998, as high valuations and
decelerating corporate profit growth began to be felt. Overseas, Asia's troubles
became more visible, particularly in the world's second-largest economy, Japan,
which is now officially in recession. Concerns over Asia, combined with slowing
profit growth in the United States and high valuations for U.S. equities, are
prompting renewed interest in the relative safety and more reliable returns of
domestic fixed income securities. Bond prices have generally been rising and the
benchmark 30-year Treasury bond yield (which moves in the opposite direction to
bond prices) declined to a new low. U.S. government issues have been
particularly strong lately, due to a lack of supply in the Treasury market -- a
result of the robust economy allowing the government to pay down some of its
debt.
Average Maturity Shortened in
Anticipation of Rising Rates
During the period, we kept a watchful eye on the Federal Reserve Board,
particularly in early 1998 when the possibility of rate increases seemed likely
in view of Fed concerns over the rapidly growing domestic economy. The strength
of the U.S. dollar, however, has eliminated any need for the Fed to tighten the
money supply so far. Short-term interest rates have now been anchored below 5.5%
for over a year and a half, with the last major change occurring in February of
1997. In this stable environment, we took advantage of smaller movements in the
market, such as those occasioned by tax periods and quarter ends.
4 - Scudder Tax Free Money Fund
<PAGE>
Early in 1998, when inflation fears had cooled and it seemed likely that the Fed
would continue to keep rates stable for a while, we were extending maturities in
the portfolio. The average maturity was 49 days at the end of January. However,
as the period progressed and the continued stability of monetary policy seemed
less assured, we took a more defensive position, gradually shortening the
average maturity to 27 days as of June 30th. Issues with shorter maturities are
beneficial in the event of rate hikes, because principal comes due earlier and
may be reinvested at the higher prevailing rates. In addition to being affected
by interest rates, tax-exempt securities also tend to be impacted by seasonal
factors, which cause their yields to fluctuate more than taxable issues. We take
advantage of seasonal swings when we can, trying to place maturities more
heavily in periods when the market offers more value.
Increased Focus on
Commercial Paper
Over the period, the portfolio was invested in a diversified mix of high-quality
tax-exempt money market instruments, including commercial paper, municipal
notes, and variable-rate demand notes. The portfolio is fully invested in first
tier debt instruments only, which has been true of the Fund historically.
We increased our weighting in commercial paper during the period, primarily due
to the flexibility that it offers in choosing maturity dates. Commercial paper
matures in one to three months, and accounted for over 25% of the portfolio as
of June 30th. General obligation bonds and demand notes tend to have less
flexibility; the bulk of them mature on June 30th and therefore need to be
reinvested when the market is expensive and yields are low. With the yield curve
nearly flat, there is currently little income inducement to buy general market
notes. We prefer to buy more commercial paper in this climate of expected rate
hikes, and also if rates ultimately remain stable, because there is generally a
lower risk of loss with commercial paper.
Outlook for Increased
Volatility Ahead
It is likely that the domestic economy will continue to be strong for the near
term, as it is still supported by a number of positive fundamentals. During the
most recent quarter, we saw the earliest signals suggesting that this strength
may begin to wane in the future, possibly owing to the Asian crisis finally
impacting the United States. However, we do anticipate a continuation of healthy
economic growth for the second half of the year.
Our strategy going forward is to continue monitoring the economic environment,
watch the Fed closely for any indication of a change in monetary policy, and
keep the average maturity of the portfolio defensively short. As this already
prolonged economic boom for the U.S. economy continues, it leaves us wondering
what might happen next and when. This uncertainty has created an outlook that
supports shortening the Fund's maturity, as we believe a rise in rates is most
likely the next move.
5 - Scudder Tax Free Money Fund
<PAGE>
In the months ahead, the Fund's management team will continue to collect
economic data and carefully monitor the investment climate as it positions your
Fund for high current income free from federal taxes plus price stability and
liquidity. In an uncertain investment environment such as this, Scudder Tax Free
Money Fund offers the safety and stability of short-term, high-quality money
market instruments. We continue to believe in the value of owning a money market
fund as part of a well-diversified portfolio.
Sincerely,
Your Portfolio Management Team
/s/Frank J. Rachwalski, Jr. /s/Jerri I. Cohen
Frank J. Rachwalski, Jr. Jerri I. Cohen
6 - Scudder Tax Free Money Fund
<PAGE>
Glossary of Investment Terms
COMMERCIAL PAPER Short-term obligations with maturities
ranging from 2 to 270 days, and issued by
banks, corporations, and other borrowers to
investors with temporarily idle cash. These
instruments are unsecured and usually
discounted, although some are
interest-bearing, and offer a high level of
safety and liquidity.
DURATION A measure of the portfolio's sensitivity to
changes in interest rates. If an investment
portfolio has a duration of 4.9 years and
interest rates decline by about 1% from
present levels, the value of the portfolio
would rise by about 4.9%, and vice versa.
GDP Gross domestic product is a commonly
referenced measure of the health of the U.S.
economy, and refers to the market value of
the goods and services produced by labor and
property in the United States. Too strong
economic growth can lead to accelerating
inflation; weak growth can lead to a
recession.
INFLATION An overall increase in the prices of goods
and services, as happens when business and
consumer spending increases relative to the
supply of goods available in the marketplace
-- in other words, when too much money is
chasing too few goods. High inflation has a
negative impact on the prices of fixed-income
securities.
LIQUIDITY A characteristic of an investment or an asset
referring to the ease of convertibility into
cash within a reasonably short period of
time.
MATURITY Reaching the date at which a debt instrument
is due and payable. A bond due to mature on
January 1, 2010 will return the bondholder's
principal and final interest payment when it
reaches maturity on that date.
MONEY MARKET Market for short-term debt instruments,
including banker's acceptances, commercial
paper, negotiable certificates of deposit,
repurchase agreements, and Treasury bills.
Money market instruments are traded through
dealers, money center banks, and the Open
Market Trading Desk at the New York Federal
Reserve Bank. All of these instruments have a
high level of safety and liquidity.
MUNICIPAL BOND An interest-bearing debt security issued by a
state or local government entity.
7 - Scudder Tax Free Money Fund
<PAGE>
TAXABLE EQUIVALENT YIELD The level of yield a fully taxable instrument
would have to provide to equal that of a
tax-free municipal bond on an after-tax
basis.
TOTAL RETURN The most common yardstick to measure the
performance of a fund. Total return --
annualized or compound -- is based on a
combination of share price changes plus
income and capital gain distributions, if
any, expressed as a percentage gain or loss
in value.
VARIABLE RATE DEMAND NOTE A note representing borrowings (usually from
a commercial bank) that is payable on demand
and that bears interest tied to a money
market rate, usually the bank's prime rate.
The rate on the note is adjusted upward or
downward each time the base rate changes.
YIELD The dividends or interest paid on a security,
expressed as a percentage of the security's
current price.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
8 - Scudder Tax Free Money Fund
<PAGE>
Investment Portfolio as of June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal Credit
Amount ($) Rating(b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal Investments 100.0%
- ------------------------------------------------------------------------------------------------------------------------------
Alaska
Alaska Housing Finance Corp., General Mortgage Revenue, Series 1991-A, Weekly
Demand Note, 3.55%, 6/1/2026* ................................................ 5,000,000 A1+ 5,000,000
Arizona
Apache County Industrial Development Revenue, Tuscan Electric Co.,
Springerville Project:
Series 1983 B, Weekly Demand Note, 3.65%, 12/15/2018* ....................... 2,500,000 A1+ 2,500,000
Series 1985 A, Weekly Demand Note, 3.6%, 12/1/2020* ......................... 1,500,000 A1+ 1,500,000
Maricopa County, AZ, Pollution Control Revenue, Palos Verde Project,
Series 1985 F, Tax Exempt Commercial Paper, 3.6%, 10/15/1998 ................. 2,000,000 A1 2,000,000
California
City of Riverside, CA, Countrywood Apartments, Multi-Family Revenue,
Series 1985 D, Weekly Demand Bonds, 3.65%, 11/1/2030* ........................ 1,000,000 SKI 1,000,000
Kern County, CA, Board of Education, Tax and Revenue Anticipation Notes,
Series 1998, 4.5%, 7/7/1998 .................................................. 2,500,000 SP1+ 2,500,237
Lancaster, CA, Willows Project Series 1985A, Multi-Family Revenue,
Weekly Demand Bonds, 3.65%, 2/1/2005* ........................................ 3,650,000 A1 3,650,000
Riverside, CA, Multi-Family Housing Revenue, Polk Apartments, Weekly Demand
Note, 3.5%, 12/1/2023* ....................................................... 2,000,000 A1 2,000,000
San Marcos, CA, Redevelopment Agency, Multi-Family Rental Housing Agency,
Variable Rate Demand Bonds, 3.65%, 6/1/2005* ................................. 5,000,000 A1 5,000,000
Colorado
Colorado Student Loan Revenue Authority, Series 1990, Weekly Demand Note,
AMT, 3.5%, 9/1/2024* ......................................................... 2,700,000 MIG1 2,700,000
Northglenn, CO, Industrial Development Revenue, Series 1988, Weekly
Demand Note, 3.5%, 1/1/2009* ................................................. 1,400,000 MIG1 1,400,000
Delaware
New Castle County, DE, Pollution Control Revenue, Variable Weekly, 3.35%,
10/1/2008* ................................................................... 2,340,000 SKI 2,340,000
District of Columbia
District of Columbia, General Obligation, Daily Demand Note:
Refunding Bonds, Series A4, 4%, 10/1/2007* ................................... 5,200,000 A1+ 5,200,000
Series A3, 4%, 10/1/2007* .................................................... 1,200,000 A1+ 1,200,000
District of Columbia, Transportation Authority, 4.5%, 9/30/1998 ................ 3,000,000 SP1+ 3,004,530
Florida
City of Gainsville, FL, Utilities Systems, Tax Exempt Commercial Paper,
3.7%, 9/15/1998 .............................................................. 4,334,000 A1+ 4,334,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Credit
Amount ($) Rating(b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Putnam County, FL, Pollution Control Revenue, Seminole Electric Cooperative
Finance Corp., 1984 Series H-2, Weekly Demand Note, 3.65%, 3/15/2014* ........ 2,440,000 A1+ 2,440,000
Sarasota County, FL, Public Hospital, Tax Exempt Commercial Paper, 3.65%,
8/12/1998 .................................................................... 3,050,000 A1+ 3,050,000
Sunshine State, FL, Government Finance Commission, Series 1986, Tax Exempt
Commercial Paper, 3.75%, 8/12/1998 ........................................... 3,000,000 MIG1 3,000,000
West Orange, FL, Memorial Hospital District, Tax Exempt Commercial Paper, 3.5%,
7/21/1998 .................................................................... 2,000,000 MIG1 2,000,000
Georgia
DeKalb Private Hospital Authority, Egleston Children's Hospital at Emory
University, 1994 Series B, Weekly Demand Note, 3.6%, 3/1/2024* ............... 5,000,000 A1+ 5,000,000
Gainsville-Riverside, GA, Redevelopment Authority, 3.55%, 1/1/2023* ............ 2,000,000 SKI 2,000,000
Illinois
Illinois Development Finance Authority:
Molex Inc. Project, Series 1985, Weekly Demand Note, 3.55%, 7/1/2005* ........ 1,000,000 SKI 1,000,000
Pollution Control Revenue, Weekly Demand Note, AMT, Series 1997B, 3.75%,
4/1/2032 (c)* ............................................................. 1,700,000 AAA 1,700,000
Illinois Educational Facilities Authority, University Pooled Finance Program,
Weekly Demand Note, 3.5%, 12/1/2005 (c)* ..................................... 2,220,000 MIG1 2,220,000
Indiana
Indiana Health Facilities Financing Authority, Variable Weekly, 3.45%,
11/1/2020* ................................................................... 4,175,000 A1+ 4,175,000
Jasper County, IN, Pollution Control Revenue, Northern Indiana Public Service
Co., Tax Exempt Commercial Paper, Series 1988C, 3.65%, 10/13/1998 ............ 1,400,000 A1+ 1,400,000
Kentucky
Mayfield, KY, Multi-City Lease Revenue Kentucky League of Cities Funding Trust,
Weekly Demand Note, Series 1996, 3.7%, 7/1/2026* ............................. 1,400,000 MIG1 1,400,000
Pendleton County, KY, Series 1989, Tax Exempt Commercial Paper, 3.8%,
7/23/1998 .................................................................... 1,015,000 A1+ 1,015,000
Maine
Maine Educational Loan Marketing Corporation Student Loan Revenue, AMT,
Series 1997 A, Weekly Demand Note, 3.55%, 5/1/2032* .......................... 2,000,000 A1+ 2,000,000
Maryland
Anne Arundel County, MD, Baltimore Electric & Gas Company, Tax Exempt
Commercial Paper, 3.9%, 8/14/1998 ............................................ 2,300,000 A1 2,300,000
Maryland Health & Higher Educational Facilities Authority, Variable Rate Demand
Note, Series 1985A, 3.5%, 4/1/2035* .......................................... 4,000,000 MIG1 4,000,000
Massachusetts
Massachusetts Bay Transportation Authority, Series 1997 B, 4.5%, 9/4/1998 ...... 2,000,000 MIG2 2,002,158
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Credit
Amount ($) Rating(b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michigan
Wayne Charter County, MI, Airport Revenue, Detroit Metropolitan County,
Series 1996 B, Weekly Demand Note, 3.5%, 12/1/2016* .......................... 2,900,000 MIG1 2,900,000
Minnesota
Cottage Grove, MN, Minnesota Mining and Manufacturing, Series 1982, Weekly
Demand Note, 3.89%, 8/1/2012* ................................................ 1,100,000 AAA 1,100,000
Mississippi
Clairborne County, MS, Series 1985G-2, Tax Exempt Commercial Paper, 3.65%,
10/14/1998 ................................................................... 3,000,000 A1+ 3,000,000
Missouri
Missouri State Independence Water Utility Revenue, Series 1986, Tax Exempt
Commercial Paper, 3.55%, 8/14/1998 ........................................... 1,800,000 MIG1 1,800,000
St. Louis, MO, Airport Revenue Municipal Securities Trust Receipts, AMT,
Series SGA71, 3.67%, 7/1/2022* ............................................... 3,000,000 A1+ 3,000,000
Nebraska
Nebraska Public Power District, Tax Exempt Commercial Paper:
3.5%, 7/20/1998 .............................................................. 4,000,000 P1 4,000,000
3.7%, 9/14/1998 .............................................................. 4,000,000 P1 4,000,000
Omaha, NE, Public Power District, Tax Exempt Commercial Paper, 3.6%,
10/14/1998 ................................................................... 1,650,000 P1 1,650,000
New Jersey
Salem County, NJ, Industrial Pollution Control Financing Authority, E.I.
du Pont de Nemours and Co., Floating Rate Demand Note, 3.8%, 3/1/2012* ....... 11,400,000 P1 11,400,000
New Mexico
Albuquerque, NM, Gross Receipts/Lodgers Tax, Series 1991A, Weekly Demand Note,
3.5%, 7/1/2022* .............................................................. 1,000,000 A1+ 1,000,000
New York
Long Island, NY, Power Authority, Tax Exempt Commercial Paper, 3.7%, 9/9/1998 .. 3,000,000 A1+ 3,000,000
New York City, NY, General Obligation, Daily Demand Note, 4.1%, 10/1/2021* ..... 900,000 A1+ 900,000
Suffolk County, NY, Tax Anticipation Notes, Series 1997, 4.25%, 8/13/1998 ...... 3,000,000 SP1+ 3,002,187
North Carolina
North Carolina Municipal Power Agency, Catawba Electric Revenue, Tax Exempt
Commercial Paper, 3.75%, 9/14/1998 ........................................... 3,500,000 A1+ 3,500,000
North Dakota
Mercer County, ND, Pollution Control Revenue, Cooperative Finance Corp.,
United Power, Weekly Demand Note, 3.65%, 8/15/2014* .......................... 3,000,000 A1 3,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Credit
Amount ($) Rating(b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ohio
Hamilton County, OH, Franciscan Sisters of the Poor Health System, Series A,
Daily Demand Note, 4.75%, 3/1/2017* .......................................... 4,500,000 MIG1 4,500,000
Ohio State, Water Development, Series 1988A, Tax Exempt Commercial Paper, 3.8%,
8/17/1998 .................................................................... 3,400,000 A1+ 3,400,000
Oklahoma
Oklahoma Development Financing Authority Revenue, AMT, Variable Weekly,
3.7%, 6/1/2018* .............................................................. 3,200,000 SKI 3,200,000
Pennsylvania
Beaver County, PA, Duqesne University, Tax Exempt Commercial Paper, 3.8%,
9/15/1998 .................................................................... 4,000,000 A1+ 4,000,000
Bucks County, PA, Oxford Falls Plaza, Series 1984, 3.75%, 10/1/2014* ........... 9,100,000 SKI 9,100,000
Delaware Valley Finance Authority, Variable Weekly, 3.45%, 8/1/2016* ........... 5,000,000 A1+ 5,000,000
Elk County, PA, Industrial Development Authority, Series 1989, Weekly
Demand Note, 4.33%, 3/1/2004* ................................................ 1,000,000 SKI 1,000,000
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue, Series
1997 A, Weekly Demand Note, AMT, 3.7%, 3/1/2027* ............................. 2,000,000 MIG1 2,000,000
Philadelphia, PA, School District Tax and Revenue Anticipation Notes,
Series 1993A, 4.5%, 7/1/1998 (c) ............................................. 1,000,000 AAA 1,000,000
Puerto Rico
Puerto Rico Commonwealth Tax and Revenue Anticipation Notes, Series 1997 A,
4.5%, 7/30/1998 .............................................................. 2,000,000 SP1+ 2,001,167
Tennessee
Franklin, TN, Industrial Development Revenue, Franklin Oaks Apartments, Weekly
Demand Note, Series 1985, 3.55%, 12/15/2021* ................................. 2,600,000 MIG1 2,600,000
Texas
Camp County, TX, Industrial Development, Pollution Control Revenue, Texas
Oil & Gas Corp., Floating Rate Demand Bond, 3.7%, 12/1/2013* ................. 2,000,000 A1 2,000,000
Harris County, TX, Health Facilities Sisters of Charity, Series 1997A,
Tax Exempt Commercial Paper, 3.75%, 8/13/1998 ................................ 3,800,000 A1+ 3,800,000
Panhandle-Plains, TX, Higher Education Authority, Student Loan Revenue:
AMT, Series 1995 A, Weekly Demand Note, 3.5%, 6/1/2025* ...................... 1,900,000 MIG1 1,900,000
AMT, Series 1997 Y, Weekly Demand Note, 3.5%, 10/1/2002* ..................... 2,500,000 MIG1 2,500,000
San Antonio, TX, Electric & Gas Public Services:
3.64%, 2/1/2020* ............................................................. 2,000,000 A1+ 2,000,000
SG #79, Series 1996, Weekly Demand Note, 3.68%, 2/1/2018* .................... 2,000,000 SKI 2,000,000
Tax Exempt Commercial Paper, 3.75%, 7/22/1998 ................................ 3,800,000 A1+ 3,800,000
San Antonio, TX, Industrial Development Authority, River Center Associates
Project, Weekly Demand Note, 3.6%, 12/1/2012* ................................ 3,300,000 SKI 3,300,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Credit
Amount ($) Rating(b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
State of Texas, Tax and Revenue Anticipation Note, Series 1998A, 4.75%,
8/31/1998 .................................................................... 13,000,000 MIG1 13,021,460
State of Texas Government Obligation, Tax Exempt Commercial Paper, Series 1997B,
3.4%, 7/6/1998 ............................................................... 3,000,000 A1+ 3,000,000
Utah
Utah Board of Regents, Student Loan Revenue Series 1988, AMT, Weekly Demand
Note, 3.5%, 11/1/2013 (c)* ................................................... 2,500,000 MIG1 2,500,000
Utah, Government Obligation, Highway Authority, Tax Exempt Commercial Paper:
Series 1997A, 3.75%, 9/30/1998 ............................................... 3,200,000 A1+ 3,200,000
Series 1998A, 3.75%, 9/11/1998 ............................................... 2,000,000 A1+ 2,000,000
Virginia
Virginia Port Authority Facility, Municipal Trust Receipts, AMT, SG 111,
Series 1997, Weekly Demand Note, 3.73%, 7/1/2024* ............................ 2,605,000 A1+ 2,605,000
Washington
Student Loan Finance Association, WA, Series 1988 A&B, Weekly Demand Note,
3.55%, 1/1/2004* ............................................................. 2,000,000 MIG1 2,000,000
Washington State Motor Vehicle Fuel Tax, Series 1996, 5%, 7/1/1998 ............. 2,000,000 SKI 2,000,000
Washington State Public Power Supply System, Nuclear Project #2, Series 1993 B,
4.3%, 7/1/1998 (c) ........................................................... 2,000,000 AAA 2,000,000
Wisconsin
Wausau, WI, Pollution Control Revenue, Minnesota Mining and Manufacturing,
Floating Rate Demand Note:
Series 1982, 3.89%, 8/1/2017* ............................................... 2,300,000 AAA 2,300,000
Series 1983, 3.89%, 12/1/2001* .............................................. 900,000 AAA 900,000
Whitewater, WI, Industrial Development Maclean Fogg Project, AMT, Weekly
Demand Note, 3.65%, 12/1/2009* ............................................... 1,000,000 MIG1 1,000,000
Wyoming
Wyoming, Gillette, Pollution Control Revenue, Series 1988, Tax Exempt
Commercial Paper, 3.6%, 9/18/1998 ............................................ 2,200,000 A1+ 2,200,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $231,110,739) (a) 231,110,739
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $231,110,739.
(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 Kemper Investments, Inc. (SKI) have been
determined by the Adviser to be of comparable quality to rated eligible
securities.
(c) Bond is insured by one of these companies: AMBAC, FGIC, FSA or MBIA.
* 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.
13 - Scudder Tax Free Money Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of June 30, 1998 (Unaudited)
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at value (amortized cost $231,110,739) ................ $ 231,110,739
Cash ............................................................... 846
Receivable for Fund shares sold .................................... 3,400,939
Interest receivable ................................................ 2,062,620
Other assets ....................................................... 8,974
----------------
Total assets ....................................................... 236,584,118
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ................................... 2,027,121
Dividends payable .................................................. 49,293
Accrued management fee ............................................. 75,605
Other payables and accrued expenses ................................ 994,272
----------------
Total liabilities .................................................. 3,146,291
--------------------------------------------------------------------------------------------
Net assets, at value $ 233,437,827
--------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized loss ...................................... (702,940)
Paid-in capital .................................................... 234,140,767
--------------------------------------------------------------------------------------------
Net assets, at value $ 233,437,827
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($233,437,827 / 233,269,721 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.
14 - Scudder Tax Free Money Fund
<PAGE>
Statement of Operations
six months ended June 30, 1998 (Unaudited)
<TABLE>
<S> <C>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------
Interest ........................................................... $ 4,760,432
----------------
Expenses:
Management fee ..................................................... 656,222
Services to shareholders ........................................... 151,951
Custodian and accounting fees ...................................... 41,293
Trustees' fees and expenses ........................................ 19,355
Reports to shareholders ............................................ 14,336
Auditing ........................................................... 21,325
Registration fees .................................................. 24,318
Legal .............................................................. 5,863
Other .............................................................. 16,192
----------------
Total expenses before reductions ................................... 950,855
Expense reductions ................................................. (93,683)
----------------
Expenses, net ...................................................... 857,172
--------------------------------------------------------------------------------------------
Net investment income 3,903,260
--------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net realized loss from investments (3,898)
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 3,899,362
--------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Tax Free Money Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Year Ended
1998 December 31,
Increase (Decrease) in Net Assets (Unaudited) 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ................................. $ 3,903,260 $ 6,849,299
Net realized loss from investment transactions ........ (3,898) (2,932)
---------------- ----------------
Net increase in net assets resulting from operations .. 3,899,362 6,846,367
---------------- ----------------
Distributions to shareholders from net investment
income ............................................. (3,903,260) (6,849,299)
---------------- ----------------
Fund share transactions at net asset value of
$1.00 per share:
Shares sold ........................................... 509,507,436 815,443,293
Shares issued to shareholders in reinvestment of
distributions ...................................... 3,576,403 6,236,249
Shares redeemed ....................................... (562,697,947) (758,866,018)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ....................................... (49,614,108) 62,813,524
---------------- ----------------
Increase (decrease) in net assets ..................... (49,618,006) 62,810,592
Net assets at beginning of period ..................... 283,055,833 220,245,241
---------------- ----------------
Net assets at end of period ........................... $233,437,827 $283,055,833
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - 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>
Six Months Ended
June 30, 1998 Years Ended December 31,
(Unaudited) 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------
Net asset value, beginning of period ............ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------------------
Net investment income ........................... .015 .031 .029 .032 .022 .018
Less distributions from net investment income ... (.015) (.031) (.029) (.032) (.022) (.018)
-------------------------------------------------------------------------
Net asset value, end of period .................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) ................................ 1.49** 3.10 2.91 3.27 2.26 1.86
Ratios and Supplemental Data
Net assets, end of period ($ millions) .......... 233 283 220 239 257 222
Ratio of operating expenses net, to average
daily net assets (%) .......................... .65* .65 .70 .75 .77 .75
Ratio of operating expenses before expense
reductions to average daily net assets ........ .72* .76 .75 .75 .77 .75
Ratio of net investment income to average
daily net assets (%) .......................... 2.96* 3.06 2.86 3.21 2.24 1.84
</TABLE>
* Annualized
** Not annualized
17 - Scudder Tax Free Money Fund
<PAGE>
Notes to Financial Statements (Unaudited)
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, as amended, 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, 1997, the Fund had a net tax basis capital loss carryforward
of approximately $699,000, 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), December 31, 2002 ($38,000), December 31,
2003 ($78,000), December 31, 2004 ($544,000) and December 31, 2005 ($3,000), 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 Kemper
Investments, 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 these agreements. 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
18 - Scudder Tax Free Money Fund
<PAGE>
and payable monthly. The Adviser has agreed to maintain the annualized expenses
of the Fund at not more than 0.65% of average daily net assets until February
28, 1999. For the six months ended June 30, 1998, the Adviser did not impose a
portion of its fee, amounting to $93,683, and the portion imposed amounted to
$562,539, equivalent to an annual effective rate of 0.43% of the Fund's average
daily net assets.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended June 30, 1998, the amount charged to the Fund by SSC aggregated
$97,694, of which $16,682 is unpaid at June 30, 1998.
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 six months
ended June 30, 1998, the amount charged to the Fund by SFAC aggregated $23,490,
of which $3,703 is unpaid at June 30, 1998.
The Fund pays each Trustee not affiliated with the Adviser an annual retainer,
plus specified amounts for attended board and committee meetings. For the six
months ended June 30, 1998, Trustees' fees and expenses aggregated $19,355.
19 - Scudder Tax Free Money Fund
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General
Manager, WGBH Educational
Foundation
Dawn-Marie Driscoll
Trustee; President, Driscoll
Associates; Executive Fellow,
Center for Business Ethics,
Bentley College
Peter B. Freeman
Trustee; Corporate Director
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration, Northeastern
University
Kathryn L. Quirk*
Trustee, Vice President and
Assistant Secretary
Jean C. Tempel
Trustee; Managing Partner,
Technology Equity Partners
K. Sue Cote*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President, Secretary and
Treasurer
John R. Hebble*
Assistant Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
20 - 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
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
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
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment 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 Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Equity
- -------------
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth 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, Inc.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal 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 in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. ***Only the Scudder Shares of the Fund are part
of the Scudder Family of Funds. ++Only the International Shares of the Fund are
part of the Scudder Family of Funds. +++ +++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 Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various other stock exchanges.
21 - Scudder Tax Free Money Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.*
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
* Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you previously designated.
Distributions Direct
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
22 - Scudder Tax Free Money Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 8,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
</TABLE>
23 - Scudder Tax Free Money Fund
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $200 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts. It is one of the ten largest mutual fund companies in the
U.S.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Group. As a result, Zurich's subsidiary, Zurich Kemper Investments,
Inc., with 50 years of mutual fund and investment management experience, was
combined with Scudder. Headquartered in New York, Scudder Kemper Investments
offers a full range of investment counsel and asset management capabilities,
based on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and perspective,
the firm seeks opportunities in markets throughout the world to meet the needs
of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Group. The Zurich Group is an internationally recognized leader in
financial services, including property/casualty and life insurance, reinsurance,
and asset management.
Shares of Scudder Tax Free Money Fund are not insured or guaranteed by the U.S.
Government. The 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
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