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, 1996
o A money market fund investing in short-term U.S. government securities. For
investors seeking current income plus liquidity and stability of capital.
o 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 portfolio management team reviews the
period's investing strategies, financial markets, and economic conditions
7 Investment Portfolio
Itemized list of 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,
No matter what type of investor you are or where you think the
financial markets are headed, money market funds form an important part of a
well-balanced portfolio by providing a convenient parking place for cash
savings. Scudder U.S. Treasury Money Fund is designed to provide safety and
stability with minimal credit risk. It achieves this by investing exclusively in
short-term securities unconditionally guaranteed by the U.S. government.
The markets both elated and frustrated investors over the past 12
months. In an environment of rising interest rates and falling prices on
fixed-income securities, stock funds experienced strong inflows at the expense
of bond funds, with aggressive stock funds taking center stage until recently.
Money market funds continued to provide a relatively stable haven for those
uncomfortable with the uncertain economic and market environment, and produced
modest gains during the year. The average money market fund returned 5.02% for
the 12-month period ended June 30th, according to Lipper Analytical Services. In
addition, money funds experienced strong inflows during the period, with assets
reaching more than $828 billion, according to IBC's Money Fund Report.
Looking ahead, we expect the economy to remain slow and steady for the
remainder of the year, with interest rates remaining at or above their current
level. Regardless of the economic environment, Scudder U.S. Treasury Money Fund
will seek to maintain its $1.00 share price and competitive yield. Should you
have any questions about your investment, please call a Scudder Investor
Relations representative at 1-800-225-2470. 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,
The key to maintaining investor confidence in a money market fund is the
ability to provide share price stability and a competitive yield. Investing in
the highest quality money market securities available helps Scudder U.S.
Treasury Money Fund pursue both objectives. Moreover, the Fund's investment
solely in U.S. Treasury securities allows for income free from most state and
local taxes. At the close of the Fund's fiscal year, its 7-day net annualized
yield was 4.45%. The Fund's total return for the 12 months was 4.91%, compared
with the 4.95% return of the 92 U.S. Treasury money funds tracked by Lipper
Analytical Services.
Elements Affecting Money Fund Yields
Interest rate fluctuations, average maturity, and stock and bond market
performance are all factors that money fund managers analyze when investing in
money market securities. Each element contributes to the performance of a fund
in a unique way.
Interest Rates. Declining interest rates generally translate into lower
yields for money fund investors, as cash received from maturing investments must
be reinvested at lower rates. Rising interest rates, on the other hand, help
boost money fund yields. During the first half of the Fund's fiscal year,
interest rates declined. Over the last six months of the period, they remained
relatively flat, and ended the period at less than they were one year ago.
Average Maturity. Yields are also affected by the average length to
maturity of the securities in a fund's portfolio. Longer maturities tend to
provide higher yields to reward investors for taking additional risk, while
shorter maturities provide safety and liquidity. If interest rates were expected
to rise, for instance, decreasing a Fund's average maturity would allow the fund
to buy higher-yielding securities with the money from maturing securities. If
rates were expected to fall, locking into securities with longer maturities
would provide the Fund with higher yields until these securities matured. Due to
increased market volatility and the potential for rising interest rates, we
shortened Scudder U.S. Treasury Money Fund's average maturity to 45 days during
the second half of the 12-month period. The following chart shows the effect
that this shorter average maturity had on the Fund's yield.
4
<PAGE>
THE PRINTED VERSION CONTAINS A LINE CHART HERE
CHART TITLE:
Your Fund's Yield Compared
with Short-Term Interest Rates*
Fund Yield Interest Rate
---------- -------------
6/95 5.20% 5.61%
7/95 5.11 5.59
8/95 5.08 5.45
9/95 5.02 5.4
10/95 4.98 5.48
11/95 5.01 5.33
12/95 4.89 5.19
1/96 4.78 4.96
2/96 4.57 4.99
3/96 4.54 5.18
4/96 4.44 5.16
5/96 4.42 5.19
6/96 4.45 5.19
* The Fund yield shown is the 7-day net annualized SEC yield. Interest rates
are represented by the 3-month Treasury bill rate.
Other Markets. Stock and bond market performance can have an effect on
money funds, as investors tend to flock toward money funds when other markets
experience volatility. The stock market saw heavy inflows during the first six
months of 1996, as investors' confidence was heightened after a strong 1995.
Uncertainty about the direction of interest rates caused bond returns to pale
after a healthy start. Many investors seeking a safe haven chose money funds,
whose assets rose to $828 billion as of June 25, from $775 billion six months
earlier. Such inflows help money funds take advantage of new issues in the
marketplace, as well as invest in securities with longer maturities to help
boost yields in the current rate environment. If inflows are too strong, though,
pressure can mount to invest extra cash quickly, and can sometimes force a fund
to buy securities whose relative value is low. We are happy to report that
Scudder U.S. Treasury Money Fund's manageable size aids careful selection of
quality issues.
Portfolio Makeup
As you might expect, a major portion of the Fund was invested in U.S.
Treasury securities during the period. These securities are backed by the U.S.
government, and provide the highest degree of safety available in a money market
security. At the period's close, these securities made up 95% of the Fund's
portfolio. Repurchase agreements made up the remaining 5% of the portfolio at
the close of the period. During much of the second quarter, securities with
shorter maturities actually provided higher yields than those with longer
5
<PAGE>
maturities -- a situation known as an inverted yield curve. We took advantage of
this opportunity with 30% of the Fund's assets in these shorter-term repurchase
agreements at the close of the period six months ago. As the yield curve
reversed itself over the course of the third quarter, we moved out of repurchase
agreements and back into U.S. Treasury bills.
Outlook
We expect economic growth to remain slow in the second half of the year,
prompting us to keep the Fund's average maturity short. And, we will continue to
purchase only the highest quality investments to help provide a stable share
price. We believe Scudder U.S. Treasury Money Fund remains an appropriate place
for your short-term investment needs.
Should you have any questions about the Fund or your investments, please
call a Scudder Investor Relations representative at 1-800-225-2470. Thank you
for choosing Scudder U.S. Treasury Money Fund to help meet your investment
needs.
Sincerely,
Your Portfolio Management Team
/s/Stephen L. Akers /s/Robert T. Neff
Stephen L. Akers Robert T. Neff
/s/Debra A. Hanson /s/K. Sue Cote
Debra A. Hanson K. Sue Cote
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 Stephen L. Akers assumed responsibility for the
Fund's day-to-day management in 1995. Steve joined the Fund's team in 1994 and
has managed several fixed-income portfolios since joining Scudder in 1984.
Portfolio Manager Robert T. Neff joined Scudder in 1972 and has managed several
fixed-income portfolios. Bob has more than 20 years experience managing
short-term fixed-income assets. Debra A. Hanson, Portfolio Manager, assists with
the development and execution of investment strategy and has been with Scudder
since 1983. K. Sue Cote, Portfolio Manager, joined Scudder in 1983 and has 13
years experience working with short-term fixed-income investments.
6
<PAGE>
INVESTMENT PORTFOLIO as of June 30, 1996
<TABLE>
<CAPTION>
% of Principal Value ($)
Portfolio Amount ($) (Note A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
4.8% REPURCHASE AGREEMENTS
13,751,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette dated 6/28/96 at 5.45%,
to be repurchased at $13,757,245
on 7/1/96, collateralized by a $13,284,000
U.S. Treasury Note, 7.875%, 4/15/98............. 13,751,000
5,402,000 Repurchase Agreement with State Street
Bank and Trust Company dated 6/28/96
at 5%, to be repurchased at $5,404,251
on 7/1/96, collateralized by a $5,405,000
U.S. Treasury Note, 6%, 8/31/97.................. 5,402,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $19,153,000)............................. 19,153,000
-----------
95.2% U.S. TREASURY OBLIGATIONS
35,000,000 U.S. Treasury Bill, 4.85%, 7/5/96................ 34,976,445
35,000,000 U.S. Treasury Bill, 4.84%, 7/11/96............... 34,948,263
45,000,000 U.S. Treasury Bill, 4.83%, 7/25/96............... 44,849,639
45,000,000 U.S. Treasury Bill, 4.85%, 8/1/96................ 44,806,685
40,000,000 U.S. Treasury Bill, 4.88%, 8/8/96................ 39,789,546
25,000,000 U.S. Treasury Bill, 4.85%, 8/15/96............... 24,846,163
35,000,000 U.S. Treasury Bill, 4.92%, 8/22/96............... 34,748,357
30,000,000 U.S. Treasury Bill, 4.85%, 8/29/96............... 29,759,508
10,000,000 U.S. Treasury Bill, 5.01%, 9/5/96................ 9,907,600
15,000,000 U.S. Treasury Bill, 5.02%, 9/12/96............... 14,846,700
10,000,000 U.S. Treasury Bill, 5.05%, 9/19/96............... 9,887,600
5,000,000 U.S. Treasury Bill, 5.04%, 9/26/96............... 4,939,100
10,000,000 U.S. Treasury Bill, 5.07%, 10/3/96............... 9,868,100
10,000,000 U.S. Treasury Bill, 5.11%, 10/10/96.............. 9,857,200
10,000,000 U.S. Treasury Bill, 5.15%, 10/17/96.............. 9,846,400
5,000,000 U.S. Treasury Bill, 5.20%, 11/14/96.............. 4,902,900
5,000,000 U.S. Treasury Bill, 5.21%, 11/21/96.............. 4,897,900
5,000,000 U.S. Treasury Bill, 5.21%, 11/29/96.............. 4,892,400
5,000,000 U.S. Treasury Bill, 5.26%, 12/5/96............... 4,887,250
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $377,469,071) 377,457,756
-----------
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $396,622,071)(a) 396,610,756
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
SCUDDER U.S. TREASURY MONEY FUND
- ----------------------------------------------
(a) The cost for federal income tax purposes was $396,622,071. At
June 30, 1996, net unrealized depreciation for all securities
based on tax cost was $11,315. This consisted of aggregate
gross unrealized appreciation for all securities in which
there was an excess of market value over tax cost of $16,663
and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value of
$27,978.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
- ---------------------------------------------------------------
<TABLE>
ASSETS
<S> <C> <C>
Investments, at value (identified cost $396,622,071)
(Note A) ......................................... $ 396,610,756
Cash ..................................................... 82,335
Receivables:
Fund shares sold ................................. 1,997,363
Interest ......................................... 8,496
Other assets ............................................. 2,792
-------------
Total assets ............................. 398,701,742
LIABILITIES
Payables:
Fund shares redeemed ................. $ 2,166,478
Dividends ............................ 87,802
Accrued management fee (Note B) ...... 40,016
Other accrued expenses (Note B) ...... 205,602
-------------
Total liabilities ............ 2,499,898
--------------
Net assets, at value $ 396,201,844
==============
NET ASSETS
Net assets consist of:
Net unrealized depreciation on investments ....... $ (11,315)
Accumulated net realized gain .................... 2,458
Shares of beneficial interest .................... 3,962,107
Additional paid-in capital ....................... 392,248,594
--------------
Net assets, at value ..................................... $ 396,201,844
==============
NET ASSET VALUE, offering and redemption price per share
($396,201,844 divided by 396,210,701 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>
SCUDDER U.S. TREASURY MONEY FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended June 30, 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest .......................................... $ 21,449,541
Expenses:
Management fee (Note B) ........................... $ 1,968,151
Services to shareholders (Note B) ................. 1,323,337
Custodian and accounting fees (Note B) ............ 106,485
Trustees' fees and expenses (Note B) .............. 26,352
Reports to shareholders ........................... 83,571
State registration ................................ 59,833
Auditing .......................................... 33,606
Legal ............................................. 15,245
Other ............................................. 22,074
------------
Total expenses before reductions .................. 3,638,654
Expense reductions (Note B) ....................... (1,077,479)
------------
Expenses, net ..................................... 2,561,175
------------
Net investment income ............................. 18,888,366
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from investment transactions .... 2,458
Net unrealized depreciation on investments
during the period ......................... (136,004)
------------
Net loss on investments ........................... (133,546)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,754,820
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended June 30,
----------------------------
Increase (Decrease) in Net Assets 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income $ 18,888,366 $ 17,568,420
Net realized gain from investment
transactions 2,458 20,664
Net unrealized appreciation (depreciation)
on investments during the period (136,004) 420,699
--------------- --------------
Net increase in net assets resulting from
operations 18,754,820 18,009,783
--------------- --------------
Distributions to shareholders:
From net investment income ($.048 and $.046
per share, respectively) (18,888,366) (17,568,420)
--------------- --------------
From net realized gains from investment
transactions -- (20,664)
Fund share transactions at net asset value of
$1.00 per share:
Shares sold 641,265,052 647,745,827
Shares issued to shareholders in
reinvestment of distributions 17,575,662 15,894,921
Shares redeemed (645,982,556) (663,250,580)
--------------- --------------
Net increase in net assets from
Fund share transactions 12,858,158 390,168
--------------- --------------
INCREASE IN NET ASSETS 12,724,612 810,867
Net assets at beginning of period 383,477,232 382,666,365
--------------- --------------
NET ASSETS AT END OF PERIOD $ 396,201,844 $ 383,477,232
=============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
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.
<TABLE>
<CAPTION>
Years Ended June 30,
--------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income .048 .046 .027 .027 .044 .065 .075 .074 .055 .050
Less distributions from net
investment income and net
realized gains on investment
transactions (b) (.048) (.046) (.027) (.027) (.044) (.065) (.075) (.074) (.055) (.050)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN (%) 4.91 4.70 2.74 2.74 4.48 6.71 7.74 7.66 5.69 5.13
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
($ millions) 396 383 383 305 299 272 198 167 154 143
Ratio of operating expenses,
net to average daily net
assets (%) (a) .65 .65 .65 .65 .65 .82 .98 1.01 1.04 .92
Ratio of net investment income to
average daily net assets (%) 4.80 4.61 2.75 2.69 4.31 6.37 7.46 7.41 5.54 4.95
(a) Operating expense ratio,
including management
fee not imposed by the
adviser (%) .92 .90 .90 .85 .85 .91 -- -- -- --
</TABLE>
(b) Net realized capital gains were less than 6/10 of 1 cent per share.
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 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. 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,
1996, 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, 1996, the Adviser did not impose a portion
of its fees amounting to $1,077,479, and the portion imposed amounted
to $890,672, of which $40,016 is unpaid at June 30, 1996.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended June 30, 1996, the amount charged to the Fund by SSC aggregated
$682,565, of which $56,225 is unpaid at June 30, 1996.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the year ended June 30, 1996,
the amount charged to the Fund by STC aggregated $447,051, of which $72,269 is
unpaid at June 30, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
June 30, 1996, the amount charged to the Fund by SFAC aggregated $49,647, of
which $8,297 is unpaid at June 30, 1996.
The Fund pays each Trustee not affiliated with the Adviser $4,000 annually plus
specified amounts for attended board and committee meetings. For the year ended
June 30, 1996, Trustees' fees and expenses aggregated $26,352.
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, 1996, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights
for each of the ten years in the period then ended. These financial
statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 1996, by correspondence
with the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Scudder U.S. Treasury Money Fund as of June 30,
1996, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the ten years in the
period then ended, in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
August 6, 1996
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
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
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
17
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder Global Bond Fund
Tax Free Money Market+ Scudder GNMA Fund
Scudder Tax Free Money Fund Scudder High Yield Bond Fund
Scudder California Tax Free Money Fund* Scudder Income Fund
Scudder New York Tax Free Money Fund* Scudder International Bond Fund
Tax Free+ Scudder Short Term Bond Fund
Scudder California Tax Free Fund* Scudder Zero Coupon 2000 Fund
Scudder High Yield Tax Free Fund Growth
Scudder Limited Term Tax Free Fund Scudder Capital Growth Fund
Scudder Managed Municipal Bonds Scudder Development Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Emerging Markets Growth Fund
Scudder Massachusetts Tax Free Fund* Scudder Global Fund
Scudder Medium Term Tax Free Fund Scudder Global Discovery Fund
Scudder New York Tax Free Fund* Scudder Gold Fund
Scudder Ohio Tax Free Fund* Scudder Greater Europe Growth Fund
Scudder Pennsylvania Tax Free Fund* Scudder International Fund
Growth and Income Scudder Latin America Fund
Scudder Balanced Fund Scudder Pacific Opportunities Fund
Scudder Growth and Income Fund Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
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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#
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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
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Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
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</TABLE>
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.
18
<PAGE>
HOW TO CONTACT SCUDDER
<TABLE>
<CAPTION>
Account Service and Information
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<S> <C>
For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your
Scudder accounts; exchanges and
redemptions; or information on any
Scudder fund
SCUDDER AUTOMATED INFORMATION LINE (SAIL) 1-800-343-2890
Investment Information
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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
Visit the Scudder World Wide Web Site at:
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http://funds.scudder.com
Or stop by a Scudder Funds Center
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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
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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.
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</TABLE>
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.
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 39 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.
