Scudder
Tax Free
Money Fund
Annual Report
May 31, 1999
No-Load 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 no-load fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Scudder Tax Free Money Fund
- --------------------------------------------------------------------------------
Date of Inception: 1/9/80 Total Net Assets as of Ticker Symbol: STFXX
5/31/99: $257.4 million
- --------------------------------------------------------------------------------
o Scudder Tax Free Money Fund's fiscal year end has changed from December 31 to
May 31. For its abbreviated fiscal year that began on January 1, 1999, and ended
May 31, 1999, Scudder Tax Free Money Fund provided a 1.03% total return, while
the Fund's 30-day net annualized yield at the end of May was 2.81%.
o To match the Fund's 2.81% 30-day net annualized yield as of May 31, investors
in the 36% and 39.6% tax brackets would have had to earn 4.39% and 4.65%,
respectively, from a comparable taxable investment.
o The Fund invests in a varied mix of short-term tax-exempt securities,
including tax-exempt commercial paper and variable-rate demand notes.
Table of Contents
3 Letter from the Fund's President 18 Notes to Financial Statements
4 Portfolio Management Discussion 20 Report of Independent Accountants
7 Glossary of Investment Terms 21 Tax Information
9 Investment Portfolio 24 Officers and Trustees
14 Financial Statements 25 Investment Products and Services
17 Financial Highlights 26 Scudder Solutions
2 - Scudder Tax Free Money Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
We are pleased to report to you on Scudder Tax Free Money Fund's
abbreviated fiscal year ended May 31, 1999. We have changed the Fund's fiscal
year end from December 31 to May 31 as part of a larger effort to create
efficiencies and reduce the costs of producing Scudder fund regulatory materials
such as fund reports and prospectuses. Going forward, you will receive regular
reports following the Fund's annual and semiannual periods ending in May and
November.
During a period of increased volatility for the financial markets, Scudder
Tax Free Money Fund continued to seek competitive income free from federal taxes
and a stable $1.00 share price for its investors. On May 31, 1999, the Fund
offered a 30-day net annualized yield of 2.81%, equivalent to 4.39% and 4.65%,
respectively, for investors in the 36% and 39.6% federal tax brackets. Over its
abbreviated fiscal year that began January 1, 1999, and ended May 31, 1999, the
Fund provided a total return of 1.03%. A "flight to quality" during much of the
period that spurred a large number of investors to turn to money market
instruments and tended to depress short-term interest rates has subsided. This
is indicated to us by the spread between the Fed Funds rate and the 90-day
Treasury bill rate: As wide as one and a half percentage points in mid-October,
the spread closed to a tenth of a percentage point as of May 31. Please read the
Portfolio Management Discussion beginning on page 4 for additional information
concerning your Fund's investment environment, strategy, and outlook.
For those interested in new Scudder products, we are pleased to introduce
Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both funds are
managed with the goal of providing long-term outperformance compared to their
benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
Please call a Scudder Investor Information representative at 1-800-225-2470
if you have questions about your Fund. Page 27 provides more information on how
to contact Scudder. Thank you for choosing Scudder Tax Free Money Fund to help
meet your investment needs.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Tax Free Money Fund
3 - Scudder Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Through a period that included a massive "flight to quality," shifting interest
rate stances by the Federal Reserve, a rising but volatile U.S. stock market,
and a robust U.S. economy, Scudder Tax Free Money Fund provided shareholders
with a stable $1.00 share price and a competitive tax-free yield. As of May 31,
1999, the Fund's 30-day net annualized yield was 2.81%. To match the Fund's
2.81% 30-day net annualized yield as of May 31, investors in the 36% and 39.6%
tax brackets would have had to earn 4.39% and 4.65%, respectively, from a
comparable taxable investment. Over its abbreviated fiscal year that began
January 1, 1999, and ended May 31, 1999, the Fund provided a total return of
1.03%. The Fund's 12-month total return of 2.71% is roughly equivalent to the
2.72% average return of similar money market funds during the same period as
tracked by Lipper Analytical Services, Inc.^1
The Markets Settle Down
Market turmoil hit a peak in the wake of the Russian currency devaluation late
last summer, followed by the near collapse of the Long Term Capital Management
hedge fund. Volatility in the U.S. stock market increased greatly while a
massive reallocation to U.S. Treasury bonds and money market instruments led to
significantly lower bond and money market yields. The Federal Reserve's three
interest rate cuts during the third and fourth quarters of 1998 helped to
gradually restore market stability.
During this period, the U.S. economy continued to grow beyond all expectations,
with a dramatic 6% annualized increase in GDP for the fourth quarter of 1998 and
a strong start in 1999 that seemed to assure at least 4% GDP growth this year.
Reflecting a healthy economy and investor expectations for continued growth, the
Dow Jones average reached 10,560 by the close of the Fund's fiscal year. At the
same time, the Federal Reserve was preparing to nudge interest rates higher
(after the bond market had already done so) in an effort to head off
inflationary pressures. The credit concerns that drove so much investor activity
in late 1998 had gradually subsided.
Shorter Maturity in Light of Tight Supply
As reported last December, a vigorous U.S. economy has given many municipalities
and state agencies (typical issuers of tax-free money market securities) the
incentive and the ability -- with their healthier balance sheets -- to borrow
longer-term at attractive rates rather than through the money markets. This was
the primary reason for a significant shortage of supply of tax-exempt money
market securities during the period. As a result (with the exception of a
moderate extension during tax season, when rates are more attractive) we kept
the Fund's average maturity shorter than usual during the period because we felt
that money market yields at the longer end of our acceptable maturity range did
- ----------
^1 Lipper Analytical Services, Inc, is an independent analyst of investment
performance. Performance includes reinvestment of dividends and capital
gains. Past performance is no guarantee of future results.
4 - Scudder Tax Free Money Fund
<PAGE>
not offer attractive value. The Fund's average maturity was 29 days on May 31,
1999, compared with 26 days on December 31, 1998.
Portfolio Allocation
Scudder Tax Free Money Fund's portfolio consists of a diversified mix of
short-term tax-exempt securities, including tax-exempt commercial paper and
variable-rate demand notes. Variable-rate demand notes are securities with
floating rates that are adjusted weekly or daily to capture current yields and
preserve liquidity. Because of their attractive characteristics, they continue
to comprise a significant portion (56%) of the portfolio. Tax-exempt commercial
paper, the Fund's second largest holding at 41%, boosts stability by allowing
the Fund to lock in relatively attractive rates over a period of one to three
months.
Outlook
In light of recent increases in short-term interest rates -- including an
increase in the Federal Funds target rate following the close of the period -- a
long-predicted slowdown in U.S. economic activity seems more likely to occur in
1999. At the same time, we expect that inflation will remain restrained, which
should place an upper limit on short-term rate increases. Though we plan to
extend the Fund's average maturity when the market offers sufficient value, we
will maintain a cautious approach during the coming months. We will also monitor
the level of worldwide economic activity closely over the remainder of the year:
The United States has been the only significant engine of economic growth for
some time. If the incipient economic recovery in Asia and other parts of the
5 - Scudder Tax Free Money Fund
<PAGE>
world gathers steam, we will watch for additional upward pressure on inflation
and short-term interest rates and adjust our strategy accordingly.
The Fund's management team will continue to collect and analyze economic data
and carefully monitor the investment climate as we position the Fund for high
current income free from federal taxes plus price stability and liquidity. We
believe that a prudently managed money market fund such as Scudder Tax Free
Money Fund can be a valuable part of a balanced investment portfolio.
Sincerely,
Your Portfolio Management Team
/s/Frank J. Rachwalski, Jr. /s/Jerri I. Cohen
Frank J. Rachwalski, Jr. Jerri I. Cohen
Scudder Tax Free
Money Fund:
A Team Approach to Investing
Scudder Tax Free Money Fund is managed by a team of Scudder Kemper
Investments, Inc. (the "Adviser") professionals, each of whom plays an
important role in the Fund's management process. Team members work together
to develop investment strategies and select securities for the Fund's
portfolio. They are supported by the Adviser's large staff of economists,
research analysts, traders, and other investment specialists who work in our
offices across the United States and abroad. We believe our team approach
benefits Fund investors by bringing together many disciplines and leveraging
our extensive resources.
Lead Portfolio Manager Frank J. Rachwalski, Jr. joined the Adviser in 1973
and has over 26 years of experience in short-term fixed income investing and
research. Mr. Rachwalski assumed responsibility for the Fund's investment
strategy and operations in January 1998.
Portfolio Manager Jerri I. Cohen joined the Adviser in 1981 and has 18 years
of investment industry experience. Ms. Cohen joined the team in 1998.
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 A note representing borrowings (usually from a
NOTE 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 May 31, 1999
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Municipal Investments 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Arizona
Apache County, AZ, Industrial Development Revenue, Tuscan Electric Co., Springville Project:
Weekly Demand Note, Series 1983 B, 3.40%, 12/15/2018* ................................................. 2,500,000 2,500,000
Weekly Demand Note, Series 1985 A, 3.35%, 12/1/2020* .................................................. 1,500,000 1,500,000
Salt River Project Agricultural Improvement and Power District, Tax Exempt Commercial Paper,
3.20%, 8/11/1999 ...................................................................................... 3,300,000 3,300,000
Colorado
Colorado Student Loan Revenue Authority, Weekly Demand Note, AMT, 3.40%, 9/1/2024* ...................... 2,700,000 2,700,000
Platte River Power Authority:
Tax Exempt Commercial Paper, 3.25%, 8/17/1999 ......................................................... 3,000,000 3,000,000
Tax Exempt Commercial Paper, 3.25%, 8/19/1999 ......................................................... 3,000,000 3,000,000
Delaware
New Castle County, DE, Pollution Control Revenue, General Motors Project, Weekly Demand
Note, 3.35%, 10/1/2008* ............................................................................... 2,340,000 2,340,000
District of Columbia
District of Columbia, General Obligation, Daily Demand Note, 3.45%, 10/1/2007* .......................... 5,958,000 5,958,000
Florida
Collier County, FL, Health Facilities Authority, Cleveland Clinic Health System, Daily Demand
Note, 3.20%, 1/1/2033* ................................................................................ 2,500,000 2,500,000
Florida Municipal Power Agency, Tax Exempt Commercial Paper, 3.15%, 8/12/1999 ........................... 4,000,000 4,000,000
Hillsborough, FL, Industrial Development Authority, Tampa Electric Company, Daily Demand
Note, AMT, 3.50%, 11/1/2020* .......................................................................... 1,800,000 1,800,000
Orange County, FL, Health Facilities Authority, Presbyterian Retirement Communities, Weekly
Demand Note, 3.30%, 11/1/2028* ........................................................................ 3,000,000 3,000,000
Orlando, FL, Capital Improvement Revenue, Tax Exempt Commercial Paper, 3.45%, 6/7/1999 .................. 2,000,000 2,000,000
Putnam County, FL, Pollution Control Revenue, Seminole Electric Cooperative Finance Corp.,
Weekly Demand Note, 3.35%, 3/15/2014* ................................................................. 2,390,000 2,390,000
Sunshine State, FL, Governmental Financing Commission, Tax Exempt Commercial Paper, 3.10%,
7/13/1999 (b) ......................................................................................... 3,500,000 3,500,000
Georgia
Fayette County, GA, Educational Facilities Revenue, Catholic School Properties Inc. Project,
Weekly Demand Note, 3.30%, 4/1/2024* .................................................................. 5,000,000 5,000,000
Gainsville Redevelopment Authority, Riverside Military Academy, Weekly Demand Note, 3.30%,
1/1/2023* ............................................................................................. 2,000,000 2,000,000
Municipal Electric Authority of Georgia, Tax Exempt Commercial Paper, 3.30%, 6/14/1999 .................. 3,500,000 3,500,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Illinois
Illinois Development Finance Authority:
Molex Inc. Project, Weekly Demand Note, 3.30%, 7/1/2005* ................................... 1,000,000 1,000,000
Pollution Control Revenue, Weekly Demand Note, AMT, 3.35%, 4/1/2032 (b)* ................... 1,700,000 1,700,000
Illinois Educational Facilities Authority:
National College of Education, Weekly Demand Note, 3.25%, 5/1/2019* ........................ 2,200,000 2,200,000
Tax Exempt Commercial Paper, 3.25%, 8/12/1999 .............................................. 2,500,000 2,500,000
Illinois Health Facilities Authority, Victory Health Services, Tax Exempt Commercial Paper,
3.25%, 9/7/1999 ............................................................................ 2,500,000 2,500,000
Indiana
Indiana Health Facilities Financing Authority, Community Mental Health Facility, Weekly Demand
Note, 3.25%, 11/1/2020 (b)* ................................................................ 3,965,000 3,965,000
Jasper County, IN, Pollution Control Revenue, Northern Indiana Public Service Co., Tax Exempt
Commercial Paper, 3.20%, 7/23/1999 ......................................................... 3,500,000 3,500,000
Kentucky
Danville, KY, Multi-City Lease Revenue, Tax Exempt Commercial Paper, 3.15%, 7/9/1999 ......... 4,960,000 4,960,000
Mason County, KY, East Kentucky Power Cooperative, Pollution Control Revenue, Weekly
Demand Note, 3.35%, 10/15/2014* ............................................................ 3,000,000 3,000,000
Mayfield, KY, Multi-City Lease Revenue, Kentucky League of Cities Funding Trust, Weekly
Demand Note, 3.40%, 7/1/2026* .............................................................. 4,400,000 4,400,000
Pendleton County, KY, Multi-County Lease Revenue:
Tax Exempt Commercial Paper, 3.10%, 7/19/1999 .............................................. 4,000,000 4,000,000
Tax Exempt Commercial Paper, 3.10%, 7/21/1999 .............................................. 2,600,000 2,600,000
Louisiana
West Baton Rouge Parish, Dow Chemical Project, Tax Exempt Commercial Paper, 3.25%,
8/11/1999 .................................................................................. 3,700,000 3,700,000
Maine
Maine Educational Loan Marketing Corporation, Student Loan Revenue, Weekly Demand Note,
AMT, 3.25%, 5/1/2032 (b)* .................................................................. 2,000,000 2,000,000
Maryland
Baltimore County, MD, Oak Crest Village Inc. Project, Weekly Demand Note, 3.50%, 1/1/2029* ... 3,000,000 3,000,000
Michigan
Michigan Strategic Fund, Hope Network Project, Weekly Demand Note, 3.35%, 9/1/2023* .......... 4,185,000 4,185,000
Wayne Charter County, MI, Airport Revenue, Detroit Metropolitan County, Weekly Demand
Note, AMT, 3.25%, 12/1/2016* ............................................................... 2,815,000 2,815,000
Minnesota
Cottage Grove, MN, Minnesota Mining and Manufacturing, Weekly Demand Note, 3.73%,
8/1/2012* .................................................................................. 1,100,000 1,100,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Missouri
Missouri Environmental Improvement & Energy Resources Authority, Tax Exempt Commercial
Paper, 3.20%, 6/14/1999 .................................................................. 3,000,000 3,000,000
St. Louis, MO, Airport Revenue Municipal Securities Trust Receipts, Weekly Demand Note, AMT,
3.36%, 7/1/2022 (b)* ..................................................................... 3,000,000 3,000,000
Nevada
Las Vegas Valley Water District:
Tax Exempt Commercial Paper, 3.40%, 6/11/1999 ............................................ 3,000,000 3,000,000
Tax Exempt Commercial Paper, 3.15%, 7/20/1999 ............................................ 3,000,000 3,000,000
Tax Exempt Commercial Paper, 3.25%, 7/21/1999 ............................................ 3,500,000 3,500,000
New Jersey
Salem County, NJ, Industrial Pollution Control Financing Authority, E.I. du Pont de Nemours
and Co., Weekly Demand Note, 3.80%, 3/1/2012* ............................................ 11,400,000 11,400,000
New York
Nassau County, NY, Tax Anticipation Notes:
Series B, 3.50%, 8/18/1999 ............................................................... 4,300,000 4,303,927
Series C, 3.50%, 12/22/1999 .............................................................. 1,300,000 1,302,812
North Dakota
Mercer County, ND, Pollution Control Revenue, Cooperative Finance Corp., United Power,
Weekly Demand Note, 3.35%, 8/15/2014* .................................................... 2,950,000 2,950,000
Oklahoma
Oklahoma Development Finance Authority, LGX Project, Weekly Demand Note, AMT, 3.42%,
6/1/2018* ................................................................................ 3,200,000 3,200,000
Pennsylvania
Bucks County, PA, Oxford Falls Plaza Project, Weekly Demand Note, 3.50%, 10/1/2014* ........ 9,100,000 9,100,000
Delaware Valley, PA, Regional Finance Authority Revenue, Weekly Demand Note, 3.20%,
8/1/2016* ................................................................................ 5,000,000 5,000,000
Pennsylvania, General Obligation, Tax Exempt Commercial Paper, 3.20%, 8/11/1999 ............ 3,700,000 3,700,000
Pennsylvania Higher Education Assistance Agency:
Student Loan Revenue, Weekly Demand Note, AMT, 3.40%, 3/1/2027* .......................... 2,000,000 2,000,000
University of Pennsylvania Health Services, Weekly Demand Note, 3.45%, 1/1/2026* ......... 5,500,000 5,500,000
South Carolina
South Carolina Public Service Authority, Tax Exempt Commercial Paper, 3.20%, 8/12/1999 ..... 3,500,000 3,500,000
Tennessee
Clarksville, TN, Public Building Authority, Pooled Financings, Weekly Demand Note, 3.25%,
6/1/2024* ................................................................................ 3,800,000 3,800,000
Maury County, TN, Industrial Development Board Water Facility Revenue, Saturn Corp. ........
Project, Weekly Demand Note, AMT, 3.40%, 6/1/2027* ....................................... 2,880,000 2,880,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Texas
Austin, TX, Utility System, Tax Exempt Commercial Paper, 3.25%, 6/14/1999 ................. 3,500,000 3,500,000
Brazos River Authority, TX, Pollution Control Revenue, Daily Demand Note, AMT, 3.50%,
6/1/2030 (b)* ........................................................................... 4,400,000 4,400,000
Camp County, TX, Industrial Development Pollution Control Revenue, Texas Oil & Gas
Corp., Weekly Demand Note, 3.40%, 12/1/2013* ............................................ 2,500,000 2,500,000
Harris County, TX, SCH Health Care System, Tax Exempt Commercial Paper:
3.20%, 7/26/1999 ........................................................................ 4,400,000 4,400,000
3.15%, 7/20/1999 ........................................................................ 3,600,000 3,600,000
Houston, TX, Water and Sewer System:
Tax Exempt Commercial Paper, 3.25%, 7/15/1999 ........................................... 4,000,000 4,000,000
Tax Exempt Commercial Paper, 3.25%, 7/19/1999 ........................................... 3,100,000 3,100,000
Panhandle-Plains, TX, Higher Education Authority, Student Loan Revenue:
Weekly Demand Note, AMT, Series 1997 Y, 3.25%, 10/1/2002* ............................... 2,500,000 2,500,000
Weekly Demand Note, AMT, Series 1995 A, 3.25%, 6/1/2025* ................................ 1,900,000 1,900,000
San Antonio, TX, Electric & Gas Municipal Securities Trust Receipts:
SG #79, Weekly Demand Note, Series 1996, 3.32%, 2/1/2018 (b)* ........................... 2,000,000 2,000,000
SGA #48, Weekly Demand Note, 3.33%, 2/1/2020* ........................................... 2,000,000 2,000,000
San Antonio, TX, Industrial Development Authority, River Center Associates Project, Weekly
Demand Note, 3.30%, 12/1/2012* .......................................................... 3,100,000 3,100,000
State of Texas, Tax and Revenue Anticipation Note, 4.50%, 8/31/1999 ....................... 3,000,000 3,008,670
Texas Municipal Power Agency:
Tax Exempt Commercial Paper, 3.30%, 7/20/1999 ........................................... 4,000,000 4,000,000
Tax Exempt Commercial Paper, 3.15%, 7/21/1999 ........................................... 3,500,000 3,500,000
Tax Exempt Commercial Paper, 3.25%, 7/22/1999 ........................................... 3,000,000 3,000,000
Texas Public Finance Authority, Tax Exempt Commercial Paper, 3.10%, 7/20/1999 ............. 4,000,000 4,000,000
University of Texas:
Tax Exempt Commercial Paper, 3.25%, 7/19/1999 ........................................... 2,300,000 2,300,000
Tax Exempt Commercial Paper, 3.25%, 7/21/1999 ........................................... 1,800,000 1,800,000
Utah
Utah Board of Regents, Student Loan Revenue, Weekly Demand Note, AMT, 3.35%,
11/1/2013 (b)* .......................................................................... 2,500,000 2,500,000
Virginia
Virginia Port Authority Facility, Municipal Trust Receipts, Weekly Demand Note, AMT, 3.39%,
7/1/2024 (b)* ........................................................................... 2,605,000 2,605,000
</TABLE>
The accompanying notes are an integral part of the financial statements
12 - Scudder Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------------------
West Virginia
<S> <C> <C>
Randolph County, WV, Industrial Development Revenue, Allegheny Wood Products Project,
Weekly Demand Note, AMT, 3.42%, 12/1/2007* ............................................ 2,920,000 2,920,000
Wisconsin
Eau Claire, WI, Solid Waste Revenue, Pope & Talbot Inc. Project, Weekly Demand Note, AMT,
3.45%, 11/1/2014* ..................................................................... 2,400,000 2,400,000
Wausau, WI, Pollution Control Revenue, Minnesota Mining and Manufacturing:
Weekly Demand Note, Series 1983, 3.73%, 12/1/2001* .................................... 900,000 900,000
Weekly Demand Note, Series 1982, 3.73%, 8/1/2017* ..................................... 2,300,000 2,300,000
Whitewater, WI, Industrial Development, MacLean Fogg Project, Weekly Demand Note, 3.50%,
12/1/2009* ............................................................................ 1,000,000 1,000,000
- ----------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $254,483,409) (a) 254,483,409
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $254,483,409.
(b) 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.
AMT: Subject to alternative minimum tax.
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 May 31, 1999
<TABLE>
<CAPTION>
Assets
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (amortized cost $254,483,409) .................... $ 254,483,409
Cash ................................................................... 2,794,446
Receivable for investments sold ........................................ 200,003
Interest receivable .................................................... 1,318,117
Receivable for Fund shares sold ........................................ 5,181,706
Other assets and receivables ........................................... 104,727
-------------
Total assets ........................................................... 264,082,408
Liabilities
- ------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ....................................... 6,465,231
Dividends payable ...................................................... 39,111
Accrued management fee ................................................. 85,941
Other payables and accrued expenses .................................... 108,967
-------------
Total liabilities ...................................................... 6,699,250
------------------------------------------------------------------------------------------
Net assets, at value ................................................... $ 257,383,158
------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized loss .......................................... (702,940)
Paid-in capital ........................................................ 258,086,098
------------------------------------------------------------------------------------------
Net assets, at value ................................................... $ 257,383,158
------------------------------------------------------------------------------------------
Net Asset Value
- ------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($257,383,158 /
257,215,052 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>
Statements of Operations
<TABLE>
<CAPTION>
Five Months
Ended Year Ended
May 31, 1999 December 31,
Investment Income (Note D) 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest ............................................ $ 3,301,932 $ 9,075,116
---------------- ----------------
Expenses:
Management fee ...................................... 530,612 1,284,548
Services to shareholders ............................ 113,960 280,553
Custodian and accounting fees ....................... 39,072 85,557
Trustees' fees and expenses ......................... 18,352 36,733
Reports to shareholders ............................. 19,240 26,385
Auditing ............................................ 40,848 42,405
Registration fees ................................... 14,948 53,116
Legal ............................................... 5,180 5,382
Other ............................................... 10,768 24,140
---------------- ----------------
Total expenses before reductions .................... 792,980 1,838,819
Expense reductions .................................. (103,184) (167,229)
---------------- ----------------
Expenses, net ....................................... 689,796 1,671,590
----------------------------------------------------------------------------------------------
Net investment income 2,612,136 7,403,526
----------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Net realized gain (loss) from investments -- (3,898)
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $ 2,612,136 $ 7,399,628
----------------------------------------------------------------------------------------------
</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>
Five Months
Ended
May 31, 1999 Years Ended December 31,
Increase (Decrease) in Net Assets (Note D) 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income .............................. $ 2,612,136 $ 7,403,526 $ 6,849,299
Net realized loss from investment transactions ..... -- (3,898) (2,932)
--------------- --------------- ---------------
Net increase in net assets resulting from operations 2,612,136 7,399,628 6,846,367
--------------- --------------- ---------------
Distributions to shareholders from net investment
income........................................... (2,614,750) (7,401,457) (6,849,299)
--------------- --------------- ---------------
Fund share transactions at net asset value of $1.00
per share:
Shares sold ........................................ 702,916,893 1,093,015,777 815,443,293
Shares issued to shareholders in reinvestment of
distributions.................................... 2,401,066 6,769,820 6,236,249
Shares redeemed .................................... (696,770,475) (1,134,001,313) (758,866,018)
--------------- --------------- ---------------
Net increase (decrease) in net assets from Fund
share transactions............................... 8,547,484 (34,215,716) 62,813,524
--------------- --------------- ---------------
Increase (decrease) in net assets .................. 8,544,870 (34,217,545) 62,810,592
Net assets at beginning of period .................. 248,838,288 283,055,833 220,245,241
--------------- --------------- ---------------
Net assets at end of period ........................ $ 257,383,158 $ 248,838,288 $ 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>
Five Months
Ended May 31,
1999 Years Ended December 31,
(Note D) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<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 .010 .029 .031 .029 .032 .022
Less distributions from net investment income (a).. (.010) (.029) (.031) (.029) (.032) (.022)
--------------------------------------------------------------------------
Net asset value, end of period .................... $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) .................................. 1.03(b)** 2.92(b) 3.10(b) 2.91(b) 3.27 2.26
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............ 257 249 283 220 239 257
Ratio of operating expenses net, to average
daily net assets (%)............................. .65* .65 .65 .70 .75 .77
Ratio of operating expenses before expense
reductions to average daily net assets........... .75* .71 .76 .75 .75 .77
Ratio of net investment income to average daily
net assets (%) .................................. 2.46* 2.87 3.06 2.86 3.21 2.24
</TABLE>
(a) Net realized capital gains (losses) were less than 6/10 of 1 cent per
share.
(b) Total returns may have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
17 - 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, 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.
At May 31, 1999, the Fund had a net tax basis capital loss carryforward of
approximately $703,000, which may be applied against any realized net taxable
gains of each succeeding year until fully utilized or until May 31, 2000
($7,000), May 31, 2001 ($29,000), May 31, 2002 ($38,000), May 31, 2003
($78,000), May 31, 2004 ($544,000), May 31, 2005 ($3,000) and May 31, 2006
($4,000) 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. ("Scudder Kemper" or 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 and payable monthly. The Adviser has
18 - Scudder Tax Free Money Fund
<PAGE>
agreed to maintain the annualized expenses of the Fund at not more than 0.65% of
average daily net assets until September 30, 1999. For the five months ended May
31, 1999, the Adviser did not impose a portion of its fee, amounting to
$103,184, and the portion imposed amounted to $427,428, equivalent to an annual
effective rate of 0.40% of the Fund's average daily net assets. For the year
ended December 31, 1998, the Adviser did not impose a portion of its fee
amounting to $167,229, and the portion imposed amounted to $1,117,319,
equivalent to an 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
five months ended May 31, 1999, the amount charged to the Fund by SSC aggregated
$79,169, and included in other assets and receivables at May 31, 1999 is $80,304
which is due from SSC. For the year ended December 31, 1998, the amount charged
to the Fund by SSC aggregated $201,755.
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 five months
ended May 31, 1999, the amount charged to the Fund by SFAC aggregated $19,148,
of which $3,841 is unpaid at May 31, 1999. For the year ended December 31, 1998,
the amount charged to the Fund by SFAC aggregated $46,090.
The Fund pays each Trustee not affiliated with the Adviser an annual retainer,
plus specified amounts for attended board and committee meetings. For the five
months ended May 31, 1999, Trustees' fees and expenses aggregated $18,352. For
the year ended December 31, 1998, the Trustees' fees and expenses aggregated
$36,733.
C. Line of Credit
The Fund and several Scudder Funds ("The Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 33 percent of its net assets under the agreement.
D. Year End Change
On August 10, 1998, the Board of Directors of the Trust changed the fiscal year
end of the Fund from December 31 to May 31.
19 - Scudder Tax Free Money Fund
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of the Scudder Tax Free Money Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Scudder Tax Free Money Fund (the
"Fund") at May 31, 1999, the results of its operations, the changes in its net
assets, and the financial highlights for the periods indicated therein, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at May 31, 1999 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
Boston, Massachusetts PricewaterhouseCoopers LLP
July 22, 1999
20 - Scudder Tax Free Money Fund
<PAGE>
Tax Information
Of the dividends paid from net investment income for the taxable year ended May
31, 1999, 100% are designated as exempt interest dividends for federal income
tax purposes.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your account, please call 1-800-SCUDDER.
21 - Scudder Tax Free Money Fund
<PAGE>
This Page
intentionally
left blank.
22 - Scudder Tax Free Money Fund
<PAGE>
This Page
intentionally
left blank.
23 - 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; Venture Partner,
Venture Capital Group
Thomas W. Joseph*
Vice President
Ann M. McCreary*
Vice President
Frank J. Rachwalski, Jr.*
Vice President
John Millette*
Vice President and Secretary
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
24 - 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 --
Prime Reserve Shares*
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 GNMA Fund
Scudder Income Fund
Scudder Corporate Bond 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 Select 500 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 Select 1000 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
Preferred Series
- ----------------
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
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.
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 or classes thereof 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. +++
+++ +++A no-load variable annuity contract issued by Glenbrook Life and Annuity
Company and underwritten by Allstate Financial Services, Inc., sold 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.
25 - 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 -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: 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
- ------------------------------------------------------------------------------------------------------------------------------
26 - 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
800 no-load funds from well-known companies--with no
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder
Brokerage account already reserved for them, with
no minimum investment. For information about
Scudder Brokerage Services, call 1-800-700-0820.
Fund Folio funds held less than six months will be charged a transaction fee. 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.
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>
27 - 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 $280 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services 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 Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
