Shares of Scudder U.S. Treasury 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 U.S. Treasury Money Fund
Annual Report
June 30, 1995
* A money market fund investing in short-term U.S. government securities. For
investors seeking current income plus liquidity and stability of capital.
* A pure no-load(TM)fund with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
TABLE OF CONTENTS
3 Letter from the Fund's President
4 Portfolio Management Discussion
Your Fund's portfolio management team reviews the period's investing
strategies, financial markets, and economic conditions
7 Investment Portfolio
Itemized list of your Fund's portfolio holdings
9 Financial Statements
12 Financial Highlights
13 Notes to Financial Statements
16 Report of Independent Accountants
17 Officers and Trustees
18 Investment Products and Services
19 How to Contact Scudder
2
<PAGE>
LETTER FROM THE FUND'S PRESIDENT
Dear Shareholders,
Stock and bond prices improved dramatically in 1995 as concerns about
inflationary economic growth all but disappeared. In spite of this strong
overall market performance, money funds consistently attracted assets during the
past six months as investors, uncertain about the economic outlook, sought a
safe place for their short-term investments. The total assets of all money funds
rose from approximately $585 billion to approximately $697 billion since last
June -- an increase of more than 19% according to Money Fund Report, a service
of IBC Financial Publishing.
During the second half of 1994 and into early 1995, money market investors
benefited from higher interest rates. Although longer-term interest rates
declined through the first half of 1995, short-term rates remained essentially
flat, affording money market investors relatively attractive levels of income.
Not until July did the Federal Reserve, responding to evidence of slowing
economic growth, lower short-term interest rates. If inflation and economic
growth remain subdued, the possibility exists for further short-term rate cuts
in the months ahead. Declining rates, while a welcome change for many businesses
and consumers, are likely to translate into lower yields for money fund
investors. On the other hand, money funds continue to offer rates that are
generally more attractive than those available from bank savings accounts and
certificates of deposit, although mutual funds are not insured or guaranteed by
the U.S. government.
In times like these it is important to remember that while their yields may
fluctuate, money funds are designed to provide a safe place for your short-term
investment needs. Scudder U.S. Treasury Money Fund seeks to maintain a constant
$1.00 share price, although we cannot assure that this will be the case. Please
call a Scudder Investor Relations representative at 1-800-225-2470 if you have
any questions about your Fund. Thank you for choosing Scudder U.S. Treasury
Money Fund to help meet your investment needs.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder U.S. Treasury Money Fund
3
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
June 30, 1995, closed a fiscal year that rewarded investors in Scudder U.S.
Treasury Money Fund with a stable share price and higher levels of income than
were available in fiscal year 1994. The Fund's 7-day net annualized yield ended
the year at 5.20%, while the 7-day effective yield (which includes the effect of
compounding) was 5.34% on June 30, 1995, compared with 3.43% a year ago. The
Fund's 12-month total return, which factors in the reinvestment of distributions
paid during the year, was 4.70%.
Steadily Rising Rates Were Tough Medicine On Most Everyone --
Except Money Market Investors
Since June 1994, the start of the fiscal year, the Federal Reserve raised
short-term interest rates three times, most recently in February 1995. All told,
the Fed raised rates seven times since February 1994, driving up money market
yields, which tend to track the movement of short-term interest rates. Rates
subsequently rose across the maturity spectrum -- even long-term rates, whose
rise was fueled by heavy selling among bond investors. The Federal Reserve's
actions were meant to brake economic growth and keep inflation at bay. Indeed,
during the 12-month period, higher interest rates raised borrowing costs, which
helped curb spending on a variety of items, including cars and houses. By
November, the evidence pointing toward slowing economic growth convinced
investors that inflation was not a threat, and long-term interest rates began to
ease, narrowing the gap between short- and long-term interest rates.
Even though longer-term interest rates have been moving down for eight
months, money market investors have continued to receive relatively attractive
levels of income because short-term rates remained essentially flat for much of
this period. In the final months of the fiscal year, short-term rates also began
to fall. Still, your Fund's current yield as of June 30, 1995, remained markedly
higher than it was a year ago. Just recently, however, short-term rates received
an additional downward push: Less than a week after the close of your Fund's
fiscal year, the Federal Reserve lowered short-term interest rates for the first
time since 1993 in an effort to keep the economy from slowing too abruptly. If
inflation and economic growth remain subdued, further short-term rate cuts could
occur in the months ahead.
4
<PAGE>
Portfolio Review
The Fund invests chiefly in U.S. Treasury securities, which carry the full
faith and credit backing of the U.S. government, making them the highest-quality
investments available. (Non-U.S. government money funds invest in traditional
money market instruments, such as bank certificates of deposit and corporate
commercial paper.) Treasuries provide the Fund with an extra measure of safety
above that of conventional money funds, which already are considered among the
most conservative of investments. Moreover, the income generated by Treasury
securities is exempt from both state and local income taxes, though not from
federal taxes.
While U.S. Treasury bills and notes constituted the bulk of the portfolio
-- 65% at year-end -- the Fund also invested in select repurchase agreements
(repos), a form of short-term loan that typically provides a yield advantage
over money market instruments with comparable maturities. Specifically, we
invested in repos with maturities of three to four days that are collateralized
by U.S. Treasuries. Because these holdings feature exceedingly short maturities,
they allow the portfolio to help meet shareholder liquidity needs while also
taking advantage of more attractive investment opportunities as they become
available.
As for the overall maturity structure of the portfolio, the Fund began the
fiscal year with an average maturity of 48 days. During much of the period, we
kept the average maturity relatively short to continue capturing income from
higher-yielding instruments as rates remained on an upward slope. In fact, we
maintained this strategy even as short-term rates leveled off in 1995, because
we did not want to rule out the possibility of further Fed rate hikes until we
saw sufficient evidence of economic weakness. But as that evidence mounted in
the final months of the fiscal year, we gradually lengthened maturities to lock
in the more attractive prevailing yields as short-term rates began to fall. The
average maturity of the portfolio at the end of the period was 55 days.
5
<PAGE>
Outlook
For several months now an array of economic indicators have pointed to
weakening U.S. economic growth and confirmed earlier readings that inflation
levels are tame. As such, we continue to favor relatively longer money market
maturities because of their yield advantage over shorter maturities. However, we
are mindful that the possibility also exists of a pick-up in economic growth and
inflation, consistent with a late-cycle rebound. Consequently, we intend to
maintain a cautiously bullish stance on rates going forward, and have begun to
emphasize the mid-range of maturities to allow for investment flexibility and
what we believe is an optimal combination of attractive yield and price
stability. Thank you for choosing Scudder U.S. Treasury Money Fund to help meet
your cash management needs.
Sincerely,
Your Portfolio Management Team
/s/Robert T. Neff /s/Debra A. Hanson
Robert T. Neff Debra A. Hanson
/s/Stephen L. Akers /s/Robert E. Pruyne
Stephen L. Akers Robert E. Pruyne
Scudder U.S. Treasury Money Fund: A Team Approach to Investing
Scudder U.S. Treasury Money Fund is managed by a team of investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Robert T. Neff has had responsibility for the Fund's
day-to-day management since its inception. Bob, who joined Scudder in 1972, has
more than 20 years of experience managing short-term fixed-income assets and is
also Lead Portfolio Manager for Scudder Cash Investment Trust. Portfolio Manager
Robert E. Pruyne has filled many important roles in Scudder's fixed-income
department since he joined the firm in 1958. Portfolio Manager Stephen L. Akers
joined the Fund's team in 1994 and has managed several fixed-income portfolios
since joining Scudder in 1984. Steve also serves as a Portfolio Manager for
Scudder Cash Investment Trust. Portfolio Manager Debra A. Hanson, who joined
Scudder in 1983, assists with the development and execution of investment
strategy and has been managing short-term fixed income assets since 1989.
6
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of June 30, 1995
------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
35.5% REPURCHASE AGREEMENTS
--------------------------------------------------------------------------------------------------------
37,911,000 Repurchase Agreement with Nesbitt
Burns Securities Inc., dated 6/30/95
at 6.125%, to be repurchased at $37,930,350
on 7/3/95, collateralized by a $38,200,000
U.S. Treasury Note, 6%, 6/30/96................................. 37,911,000
23,000,000 Repurchase Agreement with Morgan Stanley
and Co., dated 6/27/95 at 5.97%, to be
repurchased at $23,022,885 on 7/3/95,
collateralized by a $20,070,000 U.S. Treasury
Note, 8.75%, 11/15/08........................................... 23,000,000
36,000,000 Repurchase Agreement with Morgan Stanley
and Co., dated 6/26/95 at 6.03%, to be
repurchased at $36,042,210 on 7/3/95,
collateralized by a $31,070,000 U.S. Treasury
Note, 7.875%, 2/15/21 ........................................... 36,000,000
17,000,000 Repurchase Agreement with NationsBank,
dated 6/28/95 at 5.9%, to be repurchased
at $17,019,503 on 7/5/95, collateralized
by a $17,150,000 U.S. Treasury Note, 5.875%, 3/31/99............ 17,000,000
1,978,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 6/30/95
at 6%, to be repurchased at $1,978,989
on 7/3/95, collateralized by a $1,970,000
U.S. Treasury Note, 6.875%, 10/31/96............................. 1,978,000
19,000,000 Repurchase Agreement with U.B.S. Securities,
dated 6/29/95 at 5.98%, to be repurchased
at $19,022,093 on 7/6/95, collateralized by
a $18,455,000 U.S. Treasury Note, 6.875%, 8/31/99............... 19,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $134,889,000)............................................. 134,889,000
------------
--------------------------------------------------------------------------------------------------------
64.5% U.S. TREASURY OBLIGATIONS
--------------------------------------------------------------------------------------------------------
20,000,000 U.S. Treasury Bill, 5.36%, 7/13/95................................ 19,960,316
10,000,000 U.S. Treasury Bill, 5.27%, 7/20/95................................ 9,969,814
10,000,000 U.S. Treasury Bill, 5.24%, 8/3/95................................. 9,949,047
15,000,000 U.S. Treasury Bill, 5.54%, 8/10/95................................ 14,908,152
10,000,000 U.S. Treasury Bill, 5.72%, 8/17/95................................ 9,929,494
10,000,000 U.S. Treasury Bill, 5.51%, 8/24/95................................ 9,921,196
10,000,000 U.S. Treasury Bill, 5.75%, 8/31/95................................ 9,911,200
10,000,000 U.S. Treasury Bill, 5.59%, 9/7/95................................. 9,900,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
7
<PAGE>
<TABLE>
SCUDDER U.S. TREASURY MONEY FUND
------------------------------------------------------------------------------------------------------------------
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10,000,000 U.S. Treasury Bill, 5.54%, 9/14/95 ................................ 9,890,300
25,000,000 U.S. Treasury Bill, 5.84%, 9/21/95 ................................ 24,697,750
10,000,000 U.S. Treasury Bill, 5.63%, 10/12/95 ............................... 9,846,300
5,000,000 U.S. Treasury Bill, 5.76%, 10/19/95 ............................... 4,917,950
10,000,000 U.S. Treasury Bill, 5.27%, 10/26/95 ............................... 9,825,294
10,000,000 U.S. Treasury Bill, 5.60%, 11/9/95 ................................ 9,805,800
10,000,000 U.S. Treasury Bill, 5.62%, 11/16/95 ............................... 9,793,400
10,000,000 U.S. Treasury Bill, 5.51%, 11/24/95 ............................... 9,781,600
10,000,000 U.S. Treasury Bill, 5.43%, 12/7/95 ................................ 9,763,600
10,000,000 U.S. Treasury Bill, 5.60%, 12/14/95 ............................... 9,752,600
5,000,000 U.S. Treasury Bill, 5.37%, 1/11/96 ................................ 4,856,000
20,000,000 U.S. Treasury Note, 4.250%, 7/31/95 ............................... 19,972,963
5,000,000 U.S. Treasury Note, 3.875%, 8/31/95 ............................... 4,985,150
8,000,000 U.S. Treasury Note, 3.875%, 10/31/95 .............................. 7,954,960
5,000,000 U.S. Treasury Note, 4.250%, 11/30/95 .............................. 4,971,100
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $245,139,797) ............................................. 245,264,486
------------
------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $380,028,797) (a).......................................... 380,153,486
============
<FN>
(a) The cost for federal income tax purposes was $380,028,797. At June 30, 1995, net unrealized appreciation for all
securities based on tax cost was $124,689. This consisted of aggregate gross unrealized appreciation for all
securities in which there was an excess of market value over tax cost of $146,484 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over market value of $21,795.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
8
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------------------------
<CAPTION>
JUNE 30, 1995
-------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at value (including repurchase agreements
of $134,889,000) (identified cost $380,028,797)
(Note A).................................................... $ 380,153,486
Cash............................................................ 3,263,618
Receivables:
Fund shares sold............................................ 2,647,055
Interest.................................................... 556,401
Other assets.................................................... 2,792
-----------
Total assets............................................ 386,623,352
LIABILITIES
Payables:
Fund shares redeemed........................................ $ 2,870,796
Dividends................................................... 67,002
Accrued management fee (Note B)............................. 58,718
Other accrued expenses (Note B)............................. 149,604
-----------
Total liabilities....................................... 3,146,120
-------------
Net assets, at value............................................ $ 383,477,232
=============
NET ASSETS
Net assets consist of:
Net unrealized appreciation on investments.................. $ 124,689
Shares of beneficial interest............................... 3,833,525
Additional paid-in capital.................................. 379,519,018
-------------
Net assets, at value............................................ $ 383,477,232
=============
NET ASSET VALUE, offering and redemption price per share
($383,477,232 -:- 383,352,543 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.
----
9
<PAGE>
<TABLE>
SCUDDER U.S. TREASURY MONEY FUND
------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------------------
<CAPTION>
Year Ended June 30, 1995
-------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest................................................. $ 20,046,465
Expenses:
Management fee (Note B).................................. $ 939,421
Services to shareholders (Note B)........................ 1,138,147
Custodian and accounting fees (Note B)................... 100,670
Trustees' fees (Note B).................................. 27,872
Reports to shareholders.................................. 125,216
Legal.................................................... 15,614
Auditing................................................. 34,075
State registration....................................... 51,175
Other.................................................... 45,855 2,478,045
------------- ------------
Net investment income.................................... 17,568,420
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions........... 20,664
Net unrealized appreciation on investments
during the period.................................... 420,699
------------
Net gain on investments.................................. 441,363
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,009,783
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
10
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------
<CAPTION>
Years Ended June 30,
-----------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
<S> <C> <C>
Operations:
Net investment income..................................... $ 17,568,420 $ 8,820,765
Net realized gain from investment transactions............ 20,664 7,413
Net unrealized appreciation (depreciation) on investments
during the period..................................... 420,699 (310,895)
------------- -------------
Net increase in net assets resulting from operations...... 18,009,783 8,517,283
------------- -------------
Distributions to shareholders:
From net investment income ($.046 and $.027 per share,
respectively)......................................... (17,568,420) (8,820,765)
------------- -------------
From net realized gains from investment transactions...... (20,664) (7,413)
------------- -------------
Fund share transactions at net asset value of
$1.00 per share:
Shares sold............................................... 647,745,827 733,931,354
Shares issued to shareholders in
reinvestment of distributions......................... 15,894,921 7,906,663
Shares redeemed........................................... (663,250,580) (664,132,582)
------------- -------------
Net increase in net assets from Fund share transactions... 390,168 77,705,435
------------- -------------
Increase in net assets.................................... 810,867 77,394,540
Net assets at beginning of period......................... 382,666,365 305,271,825
------------- -------------
Net assets at end of period............................... $ 383,477,232 $ 382,666,365
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
----
11
<PAGE>
<TABLE>
SCUDDER U.S. TREASURY MONEY FUND
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER PERFORMANCE INFORMATION
DERIVED FROM THE FINANCIAL STATEMENTS.
<CAPTION>
YEARS ENDED JUNE 30,
------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income.... .046 .027 .027 .044 .065 .075 .074 .055 .050 .064
Less distributions
from net investment
income and net
realized gains on
investment
transactions (b)....... (.046) (.027) (.027) (.044) (.065) (.075) (.074) (.055) (.050) (.064)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period............ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%)........... 4.70 2.74 2.74 4.48 6.71 7.74 7.66 5.69 5.13 6.63
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end
of period ($ millions)... 383 383 305 299 272 198 167 154 143 156
Ratio of operating
expenses, to average
daily net assets (%)(a).. .65 .65 .65 .65 .82 .98 1.01 1.04 .92 .91
Ratio of net
investment income to
average daily
net assets (%)........... 4.61 2.75 2.69 4.31 6.37 7.46 7.41 5.54 4.95 6.39
<FN>
(a) Operating
expense ratio,
including
management fee
not imposed by
the adviser (%)........ .90 .90 .85 .85 .91 - - - - -
(b) Net realized capital gains were less than 6/10 of 1 [CENT] per share.
</FN>
</TABLE>
----
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
Scudder U.S. Treasury 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 policies
described below are followed consistently by the Fund in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
SECURITY VALUATION. Portfolio securities which have remaining maturities of
sixty days or less are valued by the amortized cost method permitted in
accordance with Rule 2a-7 under the Investment Company Act of 1940. Portfolio
securities for which market quotations are readily available and which have
remaining maturities of sixty-one days or more from the date of valuation are
valued at the calculated mean between the over-the-counter bid and asked
prices, using quotations supplied by independent registered broker/dealers. On
the sixtieth day prior to maturity and thereafter until maturity, securities
originally purchased with more than sixty days remaining to maturity are valued
at amortized cost calculated daily, based upon the market valuation of the
securities on the sixty-first day prior to maturity. Other securities are
appraised at fair value as determined in good faith by or on behalf of the
Trustees of the Fund. Repurchase agreements are valued at identified cost
which, when combined with accrued interest receivable, approximates market.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement and the underlying collateral, is equal to at least 100.5% of the
resale price.
FEDERAL INCOME TAXES. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders. The
Fund accordingly paid no federal income taxes and no provision for federal
income taxes was required.
----
13
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
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
on 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 identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
OTHER. Investment security transactions are accounted for on a trade-date basis
(which in most instances, 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 "Management Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Fund agrees to pay the
Adviser a fee equal to an annual rate of 0.50% of its average daily net assets
computed and accrued daily and payable monthly. As manager of the assets of the
Fund, the Adviser directs the investments of the Fund in accordance with its
investment objectives, policies, and restrictions. The Adviser determines the
securities, instruments, and other contracts relating to investments to be
purchased, sold or entered into by the Fund. In addition to portfolio
management services, the Adviser provides certain administrative services in
accordance with the Management Agreement. The Agreement also provides that if
the Fund's expenses, exclusive of taxes, interest and extraordinary expenses,
exceed specified limits, such excess, up to the amount of the management fee,
will be paid by the Adviser. The Adviser has agreed not to impose all or a
portion of its management fee until October 31, 1995, and during such period to
maintain the annualized expenses of the Fund at not more than 0.65% of average
daily net assets. Accordingly, for the year ended June 30, 1995, the Adviser
did not impose a portion of its fees amounting to $967,383, and the portion
imposed amounted to $939,421, of which $58,718 is unpaid at June 30, 1995.
----
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund.
For the year ended June 30, 1995, the amount charged to the Fund by SSC
aggregated $988,611, of which $87,962 is unpaid at June 30, 1995.
Effective August 1, 1994, Scudder Fund Accounting Corporation ("SFAC"), a
wholly-owned subsidiary of the Adviser, assumed responsibility for determining
the daily net asset value per share and maintaining the portfolio and general
accounting records of the Fund. For the year ended June 30, 1995, the amount
charged to the Fund by SFAC aggregated $45,175, of which $4,307 is unpaid at
June 30, 1995.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually
plus specified amounts for attended board and committee meetings. For the year
ended June 30, 1995, Trustees' fees aggregated $27,872.
----
15
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
TO THE TRUSTEES AND SHAREHOLDERS OF SCUDDER U.S. TREASURY MONEY FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
U.S. Treasury Money Fund, including the investment portfolio, as of June 30,
1995, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the ten years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 1995, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder U.S. Treasury Money Fund as of June 30, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the ten years in the period then ended, in conformity with generally
accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 2, 1995
----
16
<PAGE>
OFFICERS AND TRUSTEES
David S. Lee*
President and Trustee
E. Michael Brown*
Trustee
Dawn-Marie Driscoll
Trustee; Attorney and Corporate Director
George M. Lovejoy, Jr.
Trustee; President and Director, Fifty Associates
Jean C. Tempel
Trustee; General Partner,
TL Ventures
Stephen L. Akers*
Vice President
Cuyler W. Findlay*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Dudley H. Ladd*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Robert T. Neff*
Vice President
Edward J. O'Connell*
Vice President and Assistant Treasurer
Robert E. Pruyne*
Vice President
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
17
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Value Fund
Scudder Growth and Income Fund The Japan Fund
Retirement Plans and Tax-Advantaged Investments
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(TM)++
For complete information on any of the above Scudder funds, including
management fees and expenses, call or write for a free prospectus. Read it
carefully before you invest or send money. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *Not
available in all states. +++A no-load variable annuity contract provided by
Charter National Life Insurance Company and its affiliate, offered by
Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder, Stevens & Clark, Inc. are traded on various stock exchanges. ++For
information on Scudder Treasurers Trust,(TM) an institutional cash
management service that utilizes certain portfolios of Scudder Fund, Inc.
($100,000 minimum), call 1-800-541-7703.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
HOW TO CONTACT SCUDDER
Account Service and Information
<S> <C>
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For account updates, prices, yields, exchanges, and redemptions
SCUDDER AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions
SCUDDER INVESTOR RELATIONS
1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
For information on Scudder For information on Scudder
Treasurers Trust,(TM) an Institutional Funds*, funds
institutional cash management designed to meet the broad
service for corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees
and expenses. Please read it carefully before you invest or send
money.
</TABLE>
19
<PAGE>
Celebrating Over 75 Years of Serving Investors
Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven
Clark, Scudder, Stevens & Clark was the first independent investment counsel
firm in the United States. Since its birth, Scudder's pioneering spirit and
commitment to professional long-term investment management have helped shape the
investment industry. In 1928, we introduced the nation's first no-load mutual
fund. Today we offer 36 pure no load(TM) funds, including the first
international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.
