SCUDDER US TREASURY MONEY FUND, 497, 1998-05-11

SCUDDER US TREASURY MONEY FUND
497, 1998-05-11

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SCUDDER [logo]
PURE NO-LOAD FUNDS

A Collection Of
Prospectuses
For Six
Scudder Funds

This Outer Cover Not Part of Prospectus

<PAGE>

This combined prospectus sets forth concisely the information a prospective
investor should know before investing in the following open-end funds: Scudder
U.S. Treasury Money Fund; Scudder Income Fund, a series of Scudder Portfolio
Trust; Scudder Growth and Income Fund, a series of Scudder Investment Trust;
Scudder Development Fund, a series of Scudder Securities Trust; Scudder Global
Fund, a series of Scudder Global Fund, Inc.; and Scudder Emerging Markets Growth
Fund, a series of Scudder International Fund, Inc. Please retain it for future
reference.

If you require more detailed information, Statements of Additional Information
dated November 1, 1997 for Scudder U.S. Treasury Money Fund, Scudder Development
Fund and Scudder Global Fund; March 1, 1998 for Scudder Emerging Markets Growth
Fund; and May 1, 1998 for Scudder Income Fund and Scudder Growth and Income
Fund, as amended from time to time, may be obtained without charge by writing
Scudder Investor Services, Inc., Two International Place, Boston, MA 02110-4103
or calling 1-800-225-2470. The Statements, which are incorporated by reference
into this prospectus, have been filed with the Securities and Exchange
Commission and are available along with other related materials on the SEC's
Internet Web site (http://www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Contents--see page 11.

- -----------------------------------
NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
- -----------------------------------

SCUDDER [logo]

Scudder U.S. Treasury Money Fund
November 1, 1997 as supplemented December 31, 1997

Scudder Income Fund
May 1, 1998

Scudder Growth and Income Fund
May 1, 1998

Scudder Development Fund
November 1, 1997 as supplemented December 31, 1997

Scudder Global Fund
November 1, 1997 as supplemented December 31, 1997

Scudder Emerging Markets Growth Fund
March 1, 1998

Six pure no-load(TM) (no sales charges) mutual funds offering a broad range of
investment objectives.

Shares of Scudder U.S. Treasury Money Fund are not insured or guaranteed by the
U.S. Government. Scudder U.S. Treasury Money Fund seeks to maintain a constant
net asset value of $1.00 per share but there can be no assurance that the stable
net asset value will be maintained.

<PAGE>

Expense information

- --------------------------------------------------------------------------------
How to compare a Scudder Family of Funds pure no-load(TM) fund

This information is designed to help you understand the various costs and
expenses of investing in Scudder funds. By reviewing this table and those in
other mutual funds' prospectuses, you can compare each Fund's fees and expenses
with those of other funds. With Scudder's pure no-load(TM) funds, you pay no
commissions to purchase or redeem shares, or to exchange from one fund to
another. As a result, all of your investment goes to work for you.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in a Fund for various transactions.

<TABLE>
<CAPTION>
Scudder Scudder Scudder
U.S. Treasury Development Global
Money Fund Fund Fund
---------- ---- ----
<S> <C> <C> <C>
Sales commissions to purchase shares (sales load) NONE NONE NONE
Commissions to reinvest dividends NONE NONE NONE
Redemption fees NONE* NONE* NONE*
Fees to exchange shares NONE NONE NONE
</TABLE>

2) Annual Fund operating expenses: Expenses paid by a Fund before it
distributes its net investment income, expressed as a percentage of each
Fund's average daily net assets for the fiscal year ended June 30, 1997
for Scudder U.S. Treasury Money Fund, Scudder Development Fund and Scudder
Global Fund.

<TABLE>
<S> <C> <C> <C>
Investment management fee (after waiver, if applicable) 0.21%** 0.98% 0.95%
12b-1 fees NONE NONE NONE
Other expenses 0.44% 0.38% 0.42%
---- ---- ----
Total Fund operating expenses (after waiver, if applicable) 0.65%** 1.36% 1.37%
==== ==== ====
</TABLE>

Example

Based on the level of total Fund operating expenses listed above, the total
expenses relating to a $1,000 investment, assuming a 5% annual return and
redemption at the end of each period, are listed below. Investors do not pay
these expenses directly; they are paid by each Fund before it distributes its
net investment income to shareholders. (As noted above, the Funds have no
redemption fees of any kind.)

<TABLE>
<S> <C> <C> <C>
One year $ 7 $ 14 $ 14
Three years 21 43 43
Five years 36 75 75
Ten years 81 164 165
</TABLE>

See "Fund organization--Investment adviser" for further information about the
investment management fee. This example assumes reinvestment of all dividends
and distributions and that the percentage amounts listed under "Annual Fund
operating expenses" remain the same each year. This example should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than those
shown.

* You may redeem by writing or calling the Funds or by "Write-A-Check" for
Scudder U.S. Treasury Money Fund. If you wish to receive your redemption
proceeds via wire, there is a $5 wire service fee. For additional
information, please refer to "Transaction information--Redeeming shares."

** Until October 31, 1998, the Adviser has agreed to waive all or a portion
of its investment management fee payable by the Fund to the extent
necessary so that the total annualized expenses of the Fund do not exceed
0.65% of average daily net assets. If the Adviser had not agreed to do so,
Fund operating expenses would have been: investment management fee .50%,
other expenses .44% and total operating expenses .94% for the fiscal year
ended June 30, 1997.
- --------------------------------------------------------------------------------

2
<PAGE>

Expense information

- --------------------------------------------------------------------------------
How to compare a Scudder Family of Funds pure no-load(TM) fund

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in a Fund for various transactions.

<TABLE>
<CAPTION>
Scudder Scudder
Growth and Income
Income Fund Fund
---------- ----
<S> <C> <C>
Sales commissions to purchase shares (sales load) NONE NONE
Commissions to reinvest dividends NONE NONE
Redemption fees NONE* NONE*
Fees to exchange shares NONE NONE

2) Annual Fund operating expenses: Expenses paid by a Fund before it
distributes its net investment income, expressed as a percentage of each
Fund's average daily net assets for the fiscal year ended December 31, 1997
for Scudder Growth and Income Fund and Scudder Income Fund.

Investment management fee 0.46% 0.38%**

12b-1 fees NONE NONE

Other expenses 0.30% 0.57%
----- -----

Total Fund operating expenses 0.76% 0.95%**
====== ======

Example

One year $ 8 $10
Three years 24 30
Five years 42 53
Ten years 94 117
</TABLE>

* You may redeem by writing or calling the Funds. If you wish to receive your
redemption proceeds via wire, there is a $5 wire service fee. For
additional information, please refer to "Transaction information--Redeeming
shares."

** Until April 30, 1999, the Adviser and certain of its subsidiaries have
agreed to waive a portion of their fees payable by the Fund to the extent
necessary so that the total annualized expenses of the Fund do not exceed
0.95% of average daily net assets. Expenses shown above are restated to
reflect what the Fund would have paid for the fiscal year ended December
31, 1997 including the effect of such waiver. Actual expenses for the year
ended December 31, 1997 were: investment management fee 0.61%, other
expenses 0.57% and total operating expenses 1.18%.

3
<PAGE>

Expense information

- --------------------------------------------------------------------------------
How to compare a Scudder Family of Funds pure no-load(TM) fund

This information is designed to help you understand the various costs and
expenses of investing in Scudder Emerging Markets Growth Fund (the "Fund"). By
reviewing this table and those in other mutual funds' prospectuses, you can
compare the Fund's fees and expenses with those of other funds. With Scudder's
pure no-load(TM) funds, you pay no commissions to purchase or redeem shares, or
to exchange from one fund to another. As a result, all of your investment goes
to work for you.

1) Shareholder transaction expenses: Expenses charged directly to your
individual account in the Fund for various transactions.

Sales commissions to purchase shares (sales load) NONE
Commissions to reinvest dividends NONE
Deferred sales charge NONE
Redemption fees payable to the Fund 2.00%*
Exchange fees payable to the Fund 2.00%*

2) Annual Fund operating expenses: Expenses paid by the Fund before it
distributes its net investment income, expressed as a percentage of the
Fund's average daily net assets for the fiscal year ended October 31,
1997.

Investment management fee (after waiver) 1.17%**
12b-1 fees NONE
Other expenses (after reimbursements) 1.08%**
----
Total Fund operating expenses (after waiver
and reimbursements) 2.25%**
====

Example

Based on the level of total Fund operating expenses listed above, the total
expenses relating to a $1,000 investment, assuming a 5% annual return and
redemption at the end of each period, are listed below. Investors do not pay
these expenses directly; they are paid by the Fund before it distributes its net
investment income to shareholders.

1 Year 3 Year 5 Years 10 Years
------ ------ ------- --------
$23 $70 $120 $258

* There may be a 2% fee retained by the Fund which is imposed only on
redemptions or exchanges of shares held less than one year. You may redeem
by writing or calling the Fund. If you wish to receive your redemption
proceeds via wire, there is a $5 wire service fee. For additional
information, please refer to "Transaction information--Exchanging and
redeeming shares."

** The Adviser and certain of its subsidiaries agreed not to impose all or a
portion of its management fee until February 28, 1998, in oder to maintain
the annualized expenses of the Fund at not more than 2.00% of average
daily net assets. Due to such waiver and reimbursements for the fiscal
year ended October 31, 1997, the total annualized expenses of the Fund did
not exceed 2.00% of average daily net assets. From March 1, 1998, until
August 31, 1998, the Adviser and certain of its subsidiaries have agreed
to waive and/or reimburse all or portions of their fees and expenses
payable by the Fund to the extent necessary so that the total annualized
expenses of the Fund do not exceed 2.25% of average daily net assets.
Expenses shown above are restated to reflect what the Fund would have paid
during the fiscal year ended October 31, 1997 if expenses had been
maintained at 2.25% throughout the period. If the Adviser and its
subsidiaries had not agreed to waive and/or reimburse all or portions of
their fees and expenses, Fund expenses would have been: investment
management fee 1.25%, other expenses 1.08% and total operating expenses
2.33% for the fiscal year ending October 31, 1997.
- --------------------------------------------------------------------------------

4
<PAGE>

Financial Highlights

Scudder U.S. Treasury Money Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the audited financial
statements.

If you would like more detailed information concerning the Fund's performance, a
complete portfolio listing and audited financial statements are available in the
Fund's Annual Report dated June 30, 1997 and may be obtained without charge by
writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
Years Ended June 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ---------------------------------------------------------------------------------------------------------------------
<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 ............. .045 .048 .046 .027 .027 .044 .065 .075 .074 .055
Less distributions from net
investment income and net
realized gains on investment
transactions (a) ............... (.045) (.048) (.046) (.027) (.027) (.044) (.065) (.075) (.074) (.055)
--------------------------------------------------------------------------------
Net asset value, end of period .... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
- ---------------------------------------------------------------------------------------------------------------------
Total Return (%) .................. 4.58 4.91 4.70 2.74 2.74 4.48 6.71 7.74 7.66 5.69
Ratios and Supplemental Data
Net assets, end of period
($ millions) ................... 399 396 383 383 305 299 272 198 167 154
Ratio of operating expenses, net
to daily net average assets (%). .65 .65 .65 .65 .65 .65 .82 .98 1.01 1.04
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) ........... .94 .92 .90 .90 .85 .85 .91 .98 1.01 1.04
Ratio of net investment income to
average net assets (%) ......... 4.49 4.80 4.61 2.75 2.69 4.31 6.37 7.46 7.41 5.54
</TABLE>

(a) Net realized capital gains were less than 6/10 of 1(cents) per share.

5
<PAGE>

Financial Highlights

Scudder Income Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited
financial statements. If you would like more detailed information concerning
the Fund's performance, a complete portfolio listing and audited financial
statements are available in the Fund's Annual Report dated December 31, 1997,
which may be obtained without charge by writing or calling Scudder Investor
Services, Inc.
<TABLE>
<CAPTION>
Years Ended December 31,
1997(a) 1996(a) 1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning ----------------------------------------------------------------------------------------------
of period ......................... $13.15 $13.61 $12.32 $13.71 $13.48 $13.91 $12.82 $12.89 $12.41 $12.40
----------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ............... .80 .80 .83 .84 .90 .95 .93 1.03 1.05 1.07
Net realized and unrealized gain
(loss) on investments ............. .31 (.36) 1.41 (1.45) .77 (.05) 1.22 (.01) .49 .01
Total from investment ----------------------------------------------------------------------------------------------
operations ........................ 1.11 .44 2.24 (.61) 1.67 .90 2.15 1.02 1.54 1.08
----------------------------------------------------------------------------------------------
Less distributions:
From net investment income .......... (.79) (.81) (.86) (.76) (.87) (.93) (.92) (1.03) (1.06) (1.07)
From paid-in capital ................ -- -- -- -- -- -- -- (.06)(b) -- --
From net realized gains on
investment transactions ........... (.01) (.09) (.03) -- (.45) (.40) (.14) -- -- --
In excess of net realized gains ..... -- -- (.06) (.02) (.12) -- -- -- -- --
----------------------------------------------------------------------------------------------
Total distributions ................. (.80) (.90) (.95) (.78) (1.44) (1.33) (1.06) (1.09) (1.06) (1.07)
----------------------------------------------------------------------------------------------
Net asset value, end of ----------------------------------------------------------------------------------------------
period ............................ $13.46 $13.15 $13.61 $12.32 $13.71 $13.48 $13.91 $12.82 $12.89 $12.41
----------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (%) .................... 8.66 3.41 18.54 (4.43) 12.58 6.74 17.32 8.32 12.75 8.91
Ratios and Supplemental Data
Net assets, end of period
($ millions) ...................... 695 579 578 463 509 457 403 302 272 245
Ratio of operating expenses to
average daily net assets (%) ...... 1.18 .98 .99 .97 .92 .93 .97 .95 .93 .94
Ratio of net investment income to
average daily net assets (%) ...... 6.00 6.01 6.35 6.43 6.32 7.05 7.13 8.21 8.23 8.53
Portfolio turnover rate (%) ......... 61.9 66.9 128.3 60.3 130.6 121.3 109.6 48.0 63.2 19.6
</TABLE>

(a) Based on monthly average shares outstanding during the period.
(b) Distribution made (as a result of foreign currency related gains on the
disposition of foreign bonds) in order to avoid the payment of a 4%
federal excise tax under International Revenue Code section 4982.

6
<PAGE>

Financial Highlights

Scudder Growth and Income Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited
financial statements.

If you would like more detailed information concerning the Fund's performance,
a complete portfolio listing and audited financial statements are available in
the Fund's Annual Report dated December 31, 1997, which may be obtained without
charge by writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
Years Ended December 31,
1997(d) 1996(d) 1995 1994 1993(b) 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of ----------------------------------------------------------------------------------------------
period .......................... $23.23 $20.23 $16.26 $17.24 $16.20 $15.76 $12.77 $14.14 $13.18 $12.31
Income from investment ----------------------------------------------------------------------------------------------
operations:
Net investment income .............. .62 .60 .55 .49 .49 .57 .57 .65 .67 .60
Net realized and unrealized gain
(loss) on investment
transactions .................... 6.26 3.84 4.46 (.05) 2.01 .90 2.97 (1.01) 2.75 .86
----------------------------------------------------------------------------------------------
Total from investment operations ... 6.88 4.44 5.01 .44 2.50 1.47 3.54 (.36) 3.42 1.46
Less distributions from: ----------------------------------------------------------------------------------------------
Net investment income .............. (.58) (.57) (.56) (.51) (.45) (.53) (.55) (.67) (.69) (.59)
Net realized gains on investment
transactions .................... (2.20) (.87) (.48) (.91) (1.01) (.50) -- (.34) (1.77) --
----------------------------------------------------------------------------------------------
Total distributions ................ (2.78) (1.44) (1.04) (1.42) (1.46) (1.03) (.55) (1.01) (2.46) (.59)
----------------------------------------------------------------------------------------------
Net asset value, ----------------------------------------------------------------------------------------------
end of period ................... $27.33 $23.23 $20.23 $16.26 $17.24 $16.20 $15.76 $12.77 $14.14 $13.18
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return (%) ................... 30.31 22.18 31.18 2.60 15.59 9.57 28.16 (2.33) 26.36 12.01
Ratios and Supplemental Data
Net assets, end of period
($ millions) .................... 6,834 4,186 3,061 1,992 1,624 1,166 723 491 490 402
Ratio of operating expenses to
average net assets (%) .......... .76 .78 .80 .86 .86 .94(a) .97 .95 .87 .92
Ratio of net investment income to
average net assets (%) .......... 2.31 2.77 3.10 2.98 2.93 3.60 4.03 5.03 4.47 4.63
Portfolio turnover rate (%) ........ 22.2 26.6 26.9 42.3 35.5 27.5 44.7 64.7 76.6 47.6
Average commission rate paid (c) ... $.0605 $.0572 -- -- -- -- -- -- -- --
</TABLE>

(a) The Adviser did not impose a portion of its management fee amounting to $.02
per share for the year ended December 31, 1992. If all expenses, including
the management fee not imposed, had been incurred by the Fund, the
annualized ratio of expenses to average net assets for such year would have
been 1.08% and the total return would have been lower. This ratio includes
costs associated with the acquisition of certain assets of Niagara Share
Corporation on July 27, 1992; exclusive of these charges the ratio would
have been .92%.
(b) Effective January 1, 1993, the Fund discontinued using equalization
accounting.
(c) Average commission rate paid per share of common and preferred stocks is
calculated for years beginning on or after January 1, 1996.
(d) Based on monthly average shares outstanding during the period.

7
<PAGE>

Financial Highlights

Scudder Development Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited financial
statements.

<TABLE>
<CAPTION>
Years Ended June 30,
1997(b) 1996(b) 1995(b) 1994(b) 1993(b) 1992(b) 1991(b) 1990(b) 1989(b) 1988
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, ------------------------------------------------------------------------------------------
beginning of period ..... $45.56 $37.35 $27.58 $34.58 $29.92 $27.33 $26.25 $22.54 $22.00 $25.39
------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss ........ (.40) (0.38) (.31) (.30) (.27) (.23) (.10) (.08) (.10) (.08)
Net realized and
unrealized gain
(loss) on investment
transactions ............ (1.66) 12.79 12.20 (3.63) 6.63 3.78 2.41 6.07 1.06 (1.41)
Total from investment ------------------------------------------------------------------------------------------
operations .............. (2.06) 12.41 11.89 (3.93) 6.36 3.55 2.31 5.99 .96 (1.49)
------------------------------------------------------------------------------------------
Less distributions from
net realized gains
on investment
transactions ............ (4.48) (4.20) (2.12) (3.07) (1.70) (.96) (1.23) (2.28) (.42) (1.90)
------------------------------------------------------------------------------------------
Total distributions ........ (4.48) (4.20) (2.12) (3.07) (1.70) (.96) (1.23) (2.28) (.42) (1.90)
------------------------------------------------------------------------------------------
Net asset value, ------------------------------------------------------------------------------------------
end of period ........... $39.02 $45.56 $37.35 $27.58 $34.58 $29.92 $27.33 $26.25 $22.54 $22.00
------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Total Return (%) ........... (4.93) 35.26 45.41 (12.91) 22.28 12.83 10.32 28.50 4.66 (5.35)
Ratios and Supplemental
Data
Net assets, end of period
($ millions) ............ 862 1,040 727 546 821 700 476 361 275 356
Ratio of operating
expenses to average
daily net assets (%) .... 1.36 1.24 1.32 1.27 1.30 1.30 1.29 1.34 1.32 1.30
Ratio of net investment
loss to average daily
net assets (%) .......... (1.02) (0.91) (1.01) (.91) (.83) (.70) (.40) (.35) (.47) (.44)
Portfolio turnover
rate (%) ................ 52.2 58.8 41.6 48.3 49.2 53.5 70.8 40.1 32.0 39.2
Average commission rate
paid (a) ................ $.0355 $.0554 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
</TABLE>

(a) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal periods ending on or after June 30, 1996.

(b) Per share amounts have been calculated using the weighted average shares
method.
- --------------------------------------------------------------------------------

8
<PAGE>

Financial Highlights

Scudder Global Fund

The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the audited financial
statements.

<TABLE>
<CAPTION>
Years Ended June 30,
1997(a) 1996 1995 1994(a) 1993 1992 1991 1990 1989 1988
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning ------------------------------------------------------------------------------------------
of period ................... $28.73 $25.64 $23.93 $21.63 $19.56 $18.06 $20.36 $17.64 $14.47 $15.42
------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income ......... .17 .24 .25 .23 .15 .19 .40 .19 .19 .18
Net realized and unrealized
gain (loss) on investments .. 6.58 3.94 1.91 2.57 2.42 2.28 (1.50) 3.28 3.20 (.82)
Total from investment ------------------------------------------------------------------------------------------
operations .................. 6.75 4.18 2.16 2.80 2.57 2.47 (1.10) 3.47 3.39 (.64)
------------------------------------------------------------------------------------------
Less distributions from:
Net investment income ......... (.28) (.25) (.11) (.24) (.16) (.31) (.37) (.20) (.14) (.06)
Net realized gains from
investment transactions ..... (1.53) (.84) (.34) (.26) (.34) (.66) (.83) (.55) (.08) (.25)
------------------------------------------------------------------------------------------
Total distributions ........... (1.81) (1.09) (.45) (.50) (.50) (.97) (1.20) (.75) (.22) (.31)
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Net asset value, end of period $33.67 $28.73 $25.64 $23.93 $21.63 $19.56 $18.06 $20.36 $17.64 $14.47
------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (%) .............. 24.91 16.65 9.11 12.99 13.45 14.09 (5.20) 20.00 23.90 (4.45)
Ratios and Supplemental Data
Net assets, end of period
($ millions) ................ 1,604 1,368 1,168 1,096 577 371 268 257 91 81
Ratio of operating expenses to
average daily net assets (%) 1.37 1.34 1.38 1.45 1.48 1.59 1.70 1.81 1.98 1.71(c)
Ratio of net investment income
to average daily net assets (%) .59 .84 1.03 .97 .90 1.09 2.21 1.77 1.22 1.23
Portfolio turnover rate (%) ... 40.5 29.1 44.4 59.7 64.9 44.6 85.0(d) 38.3 30.7 53.8
Average commission rate ....... $.0007 .0272 -- -- -- -- -- -- -- --
paid (b)
</TABLE>

(a) Per share amounts have been calculated using weighted average shares
outstanding.

(b) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal periods ending on or after June 30, 1996.

(c) The Adviser absorbed a portion of the Fund's expenses exclusive of
management fees; the ratio of operating expenses before expense
reductions, to average daily net assets was 1.91%.

(d) The portfolio turnover rate on equity securities and debt securities was
62.7% and 174.4%, respectively, based on average monthly equity holdings
and average monthly debt holdings.

9
<PAGE>

Financial Highlights

Scudder Emerging Markets Growth Fund

The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.

If you would like more detailed information concerning the Fund's performance, a
complete portfolio listing and audited financial statements are available in the
Fund's Annual Report dated October 31, 1997, which may be obtained without
charge by writing or calling Scudder Investor Services, Inc.

<TABLE>
<CAPTION>
For the Period
May 8, 1996
Year (commencement)
Ended of operations) to
October 31, October 31,
1997 1996
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
----------------------------------
Net asset value, beginning of period ..................................... $12.85 $12.00
----------------------------------
Income from investment operations:
Net investment income (loss) ............................................. .02 (.02)
Net realized and unrealized gain on investments .......................... 1.67 .86
----------------------------------
Total from investment operations ......................................... 1.69 .84
----------------------------------
Less distributions from net investment income ............................ (.03) --
Redemption fees .......................................................... .05 .01
----------------------------------
Net asset value, end of period ........................................... $14.56 $12.85
----------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return (%) (c) (d) ................................................. 13.51 7.08**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ................................... 220 76
Ratio of operating expenses, net to average daily net assets (%) ......... 2.00 2.00*
Ratio of operating expenses before expense reductions,
to average daily netassets (%) ........................................ 2.33 3.79*
Ratio of net investment income (loss) to average daily net assets (%) .... .11 (.32)*
Portfolio turnover rate (%) .............................................. 61.5 19.5*
Average commission rate paid (b) ......................................... $.0013 $.0006
</TABLE>

(a) Based on monthly average of shares outstanding during the period.
(b) Average commission rate paid per share of common and preferred stocks.
(c) Total return is higher due to maintenance of the Fund's expenses.
(d) Total return does not reflect the effect to the shareholder of the 2%
redemption fee on shares held less than one year.
* Annualized
** Not annualized
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A message from the President

Scudder Kemper Investments, Inc., investment adviser to the Scudder Family of
Funds, is one of the largest and most experienced investment management
organizations worldwide, managing more than $200 billion in assets globally for
mutual fund investors, retirement and pension plans, institutional and corporate
clients, and private family and individual accounts. It is one of the ten
largest mutual fund companies in the U.S.

We offered America's first no-load mutual fund in 1928, and today the Scudder
Family of Funds includes over 50 no-load mutual fund portfolios or classes of
shares. We also manage the mutual funds in a special program for the American
Association of Retired Persons, as well as the fund options available through
Scudder Horizon Plan, a tax-advantaged variable annuity. We also advise The
Japan Fund, and numerous other open- and closed-end funds that invest in this
country and other countries around the world.

The Scudder Family of Funds is designed to make investing easy and less costly.
It includes money market, tax free, income and growth funds as well as IRAs,
401(k)s, Keoghs and other retirement plans.

Services available to shareholders include toll-free access to professional
representatives, easy exchange among the Scudder Family of Funds, shareholder
reports, informative newsletters and the walk-in convenience of Scudder Investor
Centers.

Funds or fund classes in the Scudder Family of Funds are offered without
commissions to purchase or redeem shares or to exchange from one fund to
another. There are no 12b-1 fees either, which many other funds now charge to
support their marketing efforts. All of your investment goes to work for you. We
look forward to welcoming you as a shareholder.

/s/Edmond D. Villani

Fund objectives

o Scudder U.S. Treasury Money Fund
seeks safety, liquidity and stability of capital and, consistent therewith,
current income

o Scudder Income Fund
seeks a high level of income, consistent with the prudent investment of
capital

o Scudder Growth and Income Fund
seeks long-term growth of capital, current income and growth of income

o Scudder Development Fund
seeks long-term growth of capital

o Scudder Global Fund
seeks long-term growth of capital from global investment

o Scudder Emerging Markets Growth Fund
seeks long term growth of capital primarily through equity investments in
emerging markets around the globe

Contents

Introduction 12
Scudder U.S. Treasury Money Fund 12
Scudder Income Fund 13
Scudder Growth and Income Fund 15
Scudder Development Fund 16
Scudder Global Fund 16
Scudder Emerging Markets Growth Fund 19
Additional information about policies
and investments 21
Distribution and performance information 30
Fund organization 31
Transaction information 34
Shareholder benefits 39
Purchases 42
Exchanges and redemptions 43
Investment products and services 45
How to contact Scudder Back cover

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Introduction

Scudder U.S. Treasury Money Fund, Scudder Income Fund, Scudder Growth and Income
Fund, Scudder Development Fund, Scudder Global Fund and Scudder Emerging Markets
Growth Fund (collectively, the "Funds") are mutual funds advised by Scudder
Kemper Investments, Inc. (the "Adviser"). The six Funds' prospectuses are
presented together so you can understand their important differences and decide
which Fund or combination of Funds is most suitable for your investment needs.

Except as otherwise indicated, each Fund's investment objectives and policies
are not fundamental and may be changed without a vote of shareholders. If there
is a change in investment objectives, shareholders should consider whether that
Fund remains an appropriate investment in light of their current financial
position and needs. There can be no assurance that each Fund's objectives will
be met.

Scudder U.S. Treasury Money Fund

Investment objective and policies

Scudder U.S. Treasury Money Fund, a diversified, open-end management investment
company, seeks to provide safety, liquidity and stability of capital and,
consistent therewith, to provide current income. The Fund seeks to achieve its
objective by investing in short-term U.S. Government securities and repurchase
agreements. The Fund seeks to maintain a constant net asset value of $1.00 and
declares dividends daily.

Investment characteristics

The Fund seeks to provide investors with current income and stability of capital
through a portfolio consisting primarily of short-term U.S. Treasury obligations
and similar investments. The Fund is a "fixed price" fund; that is, it seeks to
maintain a constant share price of $1.00, although under certain circumstances
this may not be possible. This price stability makes the Fund suitable for
investors who are seeking current income and who are unwilling to accept stock
or bond market risk.

The Fund is also designed to minimize credit risk. It invests exclusively in
short-term securities unconditionally guaranteed by the U.S. Government (as to
payment of both principal and interest) and repurchase agreements backed fully
by U.S. Treasury securities.

The Fund invests in U.S. Government securities whose interest is specifically
exempted from state and local income taxes under federal law; the interest is
not exempt from federal income tax. Most, but not all, states allow this
tax-exempt character of the Fund's income to pass through to its shareholders,
so that distributions from the Fund to the extent derived from interest that is
exempt from state and local income taxes, are exempt from such taxes when earned
by a shareholder of the Fund. Shareholders should, however, contact their own
tax advisers regarding the possible exclusion for state and local income tax
purposes of the portion of distributions received from the Fund which is
attributable to interest from U.S. Government securities. Income earned by the
Fund from U.S. Treasury-backed repurchase agreements generally is not exempt
from state and local tax.

Investments

The Fund invests without limitation in short-term securities consisting of U.S.
Treasury notes, bonds, bills and in other securities issued or guaranteed by the
U.S. Government and thus backed by the full faith and credit of the United
States. The Fund may invest its assets, when conditions are appropriate, in
repurchase agreements, but only if they are fully collateralized by U.S.
Treasury obligations. At least 80% of the Fund's assets will be invested in
either U.S. Treasury securities or in repurchase agreements collateralized by
U.S. Treasury obligations. All of the securities in which the Fund may invest

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are U.S. dollar-denominated. The Fund's investments in U.S. Government
obligations provide a high degree of safety and liquidity. Amendments have been
proposed to the federal rules regulating quality, maturity and diversification
requirements of money market funds, like the Fund. If the amendments are adopted
the Fund intends to comply with such new requirements. The Fund may also invest
in when-issued securities, whose market value may involve an unrealized gain or
loss prior to settlement. In addition the Fund may invest, to a limited extent,
in illiquid or restricted securities.

The Fund's investments in U.S. Government securities may have maturities of up
to 762 calendar days; all other portfolio securities will have maturities of up
to 397 calendar days. The dollar-weighted average maturity of the Fund's
portfolio investments varies with money market conditions, but is always 90 days
or less. As a money market fund with a short-term maturity, the Fund's income
fluctuates with changes in interest rates but its price is expected to remain
fixed at $1.00 per share.

Why invest in the Fund?

The Fund can be appropriate for investors who are concerned about stability of
principal. If investors are just starting out and want their assets to grow in a
stable investment, if they want to keep their nest egg safe and handy, or if
they are simply looking to "park" their investment capital for a short time, a
government money market fund may be a good choice. One appealing characteristic
of a money market fund is that it seeks to maintain a stable share price. Thus,
not only should investors have the value of their initial investment maintained,
they ordinarily will have earnings on that investment, plus earnings on those
earnings, if dividends are reinvested.

Another important feature of the Fund is daily liquidity. Investors can gain
access to their cash by toll-free telephone redemption or with our convenient
check writing option. Shareholders may write checks of at least $100.

The Fund is appropriate for investors who are seeking a high degree of credit
safety. U.S. Treasury bills, notes and bonds and other securities backed by the
full faith and credit of the U.S. Government are considered to be of the highest
quality and among the safest investments to own. Income derived from these
securities is exempt from state and local taxes in many regions of the country.

Scudder Income Fund

Investment objective and policies

Scudder Income Fund, a diversified series of Scudder Portfolio Trust, seeks a
high level of income, consistent with the prudent investment of capital, through
a flexible investment program emphasizing high-grade bonds.

The Fund invests primarily in a broad range of high-grade, income-producing
securities such as corporate bonds and government securities. The Fund may
invest, from time to time, in municipal obligations. There is no limitation as
to the proportions of the portfolio which may be invested in each of these types
of securities.

Proportions among the types of securities vary, depending on the prospects for
income related to the outlook for the economy and the securities markets, the
quality of available investments, the level of interest rates and other factors.
However, it is a policy of the Fund to allocate investments among industries and
companies. The Fund changes its portfolio securities for investment
considerations, not for trading purposes.

Investments

The majority of the Fund's assets are usually invested in intermediate- and
long-term fixed-income securities. Long-term bonds have remaining maturities of
longer than eight years and usually pay a higher rate of income than short-term
fixed-income securities and common stocks. The Fund, however, has the

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<PAGE>

flexibility to invest in securities within any maturity range and has
consistently held investments with short and intermediate maturities as well as
long maturities. The Fund may invest in bonds, notes, zero coupon securities,
adjustable rate bonds, convertible bonds, preferred and convertible preferred
securities, commercial paper, debt securities issued by real estate investment
trusts ("REITs"), mortgage and asset-backed securities and other money market
instruments and illiquid securities such as certain securities issued in private
placements.

Under normal market conditions, the Fund will invest at least 65% of its assets
in securities rated within the three highest quality rating categories of
Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa and A) or Standard & Poor's
("S&P") (AAA, AA and A), or if unrated, in bonds judged by the Fund's Adviser to
be of comparable quality at the time of purchase. The Fund may invest up to 20%
of its assets in debt securities rated lower than Baa or BBB or, if unrated, of
equivalent quality as determined by the Adviser, but will not purchase bonds
rated below B by Moody's or S&P or their equivalent. During the fiscal year
ended December 31, 1997, the average monthly dollar-weighted market value of the
bonds in the Fund's portfolio was rated as follows: 52% Aaa, 1% Aa, 14% A, 17%
Baa, 8% Ba and 9% B.

The Fund may also invest in U.S. Government securities which include:

o securities issued and backed by the full faith and credit of the U.S.
Government, such as U.S. Treasury bills, notes and bonds;

o securities, including mortgage-backed securities, issued by an agency or
instrumentality of the U.S. Government, including those backed by the full
faith and credit of the U.S. Government and those issued by agencies and
instrumentalities which, while neither direct obligations of, nor guaranteed
by the U.S. Government, are backed by the credit of the issuer itself and may
be supported as well by the issuer's right to borrow from the U.S. Treasury;
and

o securities of the U.S. Government, its agencies or instrumentalities on a
when-issued or forward delivery basis.

The Fund may invest in foreign securities and certificates of deposit issued by
foreign and domestic branches of U.S. banks. It may also invest in when-issued
or forward delivery securities, indexed securities, repurchase agreements,
restricted securities, and may engage in dollar-roll transactions and strategic
transactions. More information about these investment techniques is provided
under "Additional information about policies and investments."

The Fund's share price fluctuates with changes in interest rates and market
conditions. The Fund's share price tends to rise as interest rates decline and
decline as interest rates rise. These fluctuations may cause the value of an
investor's shares to be higher or lower than when purchased.

Why invest in the Fund?

Scudder Income Fund seeks to provide investment income from a professionally
managed portfolio consisting primarily of intermediate- and long-term,
high-grade fixed-income securities.

Fixed-income securities purchased by the Fund will be primarily high-grade
bonds: those rated Aaa, Aa or A by Moody's, or AAA, AA or A by S&P, or those of
equivalent quality as determined by the Adviser. By focusing on intermediate-
and long-term securities, the Fund offers investors willing to accept greater
principal risk the possibility of earning a higher rate of income than is
generally available from funds investing in short-term or money market
securities.

The Fund may also invest up to 20% of its assets in lower quality domestic debt
securities, sometimes referred to as "high-yield" or "junk" bonds. These bonds
offer higher income, as well as the prospect for price appreciation, but involve

14
<PAGE>

more risk, particularly a greater risk of default, than U.S. Government bonds or
other high quality, corporate fixed-income securities. The Fund's Adviser seeks
to reduce these risks through investment diversification and ongoing research
and analysis.

The Adviser has been researching and managing fixed-income investments since
1929. As America's oldest no-load mutual fund, Scudder Income Fund has not
missed a quarterly dividend payment in over 60 years.

Scudder Growth and Income Fund

Investment objectives and policies

Scudder Growth and Income Fund, a diversified series of Scudder Investment
Trust, seeks long-term growth of capital, current income and growth of income.
The Fund invests primarily in common stocks, preferred stocks, and securities
convertible into common stocks of companies which offer the prospect for growth
of earnings while paying current dividends. Over time, continued growth of
earnings tends to lead to higher dividends and enhancement of capital value. The
Fund allocates its investments among different industries and companies, and
adjusts its portfolio securities for investment considerations and not for
trading purposes.

Investments

The Fund attempts to achieve its investment objective by investing primarily in
dividend- paying common stocks, preferred stocks and securities convertible into
common stocks. The Fund may also purchase such securities which do not pay
current dividends but which offer prospects for growth of capital and future
income. Convertible securities (which may be current coupon or zero coupon
securities) are bonds, notes, debentures, preferred stocks and other securities
which may be converted or exchanged at a stated or determinable exchange ratio
into underlying shares of common stock. The Fund may also invest in
nonconvertible preferred stocks consistent with the Fund's objective. From time
to time, for temporary defensive purposes, when the Adviser feels such a
position is advisable in light of economic or market conditions, the Fund may
invest, without limit, in cash and cash equivalents. It is impossible to predict
how long such alternative strategies will be utilized. The Fund may invest in
foreign securities, real estate investment trusts, illiquid securities,
repurchase agreements and reverse repurchase agreements. It may also loan
securities and may engage in strategic transactions. More information about
investment techniques is provided under "Additional information about policies
and investments."

The Fund's share price fluctuates with changes in interest rates and market
conditions. These fluctuations may cause the value of shares to be higher or
lower than when purchased.

Why invest in the Fund?

The Fund seeks to provide participation in the long-term growth of the economy
through the potential investment returns offered by common stocks and securities
convertible into common stocks. It maintains a diversified portfolio consisting
primarily of common stocks, preferred stocks and convertible securities of
companies with long-standing records of earnings growth. These companies, many
of which are mainstays of the U.S. economy, offer prospects for future growth of
earnings and profits, and therefore may offer investors attractive long-term
investment opportunities. This strategy, with an emphasis on income, may be more
appropriate for the conservative portions of your equity portfolio.

The Fund is designed for long-term investors who can accept moderate stock
market risk. In return for accepting stock market risk, you may earn a greater
return on your investment than from a money market or an income fund, but
experience less risk than from a portfolio of more speculative equity
securities.

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<PAGE>

Scudder Development Fund

Investment objective and policies

Scudder Development Fund, a diversified series of Scudder Securities Trust,
seeks long-term growth of capital by investing primarily in securities of small
and medium-size growth companies. The Fund is designed for investors in search
of substantial long-term growth who can accept above-average stock market risk
and little or no current income.

Investments

The Fund generally invests in equity securities, including common stocks and
convertible securities, of small and medium-size companies, commonly referred to
as emerging growth companies, that the Adviser believes have above-average
earnings growth potential and/or may receive greater market recognition. Both
factors are believed to offer significant opportunity for capital appreciation
and the Adviser will attempt to identify these opportunities before their
potential is recognized by investors in general. Generally, small and
medium-size companies are those with $50 million to $5 billion in total market
capitalization.

To help reduce risk, the Fund allocates its investments among many companies and
different industries. In selecting industries and companies for investment, the
Adviser will consider overall growth prospects, financial condition, competitive
position, technology, research and development, productivity, labor costs, raw
material costs and sources, profit margins, return on investment, structural
changes in local economies, capital resources, the degree of governmental
regulation or deregulation, management and other factors.

For temporary defensive purposes the Fund may vary from its investment policy
during periods in which conditions in securities markets or other economic or
political conditions warrant. In such cases, the Fund may invest without limit
in cash and may invest in high quality debt securities without equity features,
U.S. Government securities and money market instruments which are rated in the
two highest categories by Moody's or S&P, or, if unrated, are deemed by the
Adviser to be of equivalent quality. It is impossible to accurately predict how
long such alternative strategies may be utilized.

In addition, the Fund may invest in preferred stocks when management anticipates
that the capital appreciation is likely to equal or exceed that of common stocks
over a selected time.

The Fund may enter into repurchase agreements, and invest in illiquid or
restricted securities, foreign securities, convertible bonds, and may engage in
strategic transactions. More information about these investment techniques is
provided under "Additional information about policies and investments."

Why invest in the Fund?

Scudder Development Fund offers participation in the potential growth of small
and medium-size growth companies with favorable long-term prospects. The Fund
offers the benefits of professional management of investments chiefly in U.S.
companies with histories of rapid earnings growth and like prospects for the
future. In return for accepting above-average risk, investors gain access to a
large, diversified portfolio designed for above-average capital appreciation
compared to that available from larger companies such as those in the Standard &
Poor's 500 Stock Index.

Scudder Global Fund

Investment objective and policies

Scudder Global Fund, a series of Scudder Global Fund, Inc., seeks long-term
growth of capital through a diversified portfolio of marketable securities,
primarily equity securities, including common stocks, preferred stocks and debt

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securities convertible into common stocks. The Fund invests on a worldwide basis
in equity securities of companies which are incorporated in the U.S. or in
foreign countries. It also may invest in the debt securities of U.S. and foreign
issuers. Income is an incidental consideration.

Investments

The Fund invests in companies that the Adviser believes will benefit from global
economic trends, promising technologies or products and specific country
opportunities resulting from changing geopolitical, currency or economic
relationships. It is expected that investments will be spread broadly around the
world. The Fund will be invested usually in securities of issuers located in at
least three countries, one of which may be the U.S. The Fund may be invested
100% in non-U.S. issues, and for temporary defensive purposes may be invested
100% in U.S. issues, although under normal circumstances it is expected that
both foreign and U.S. investments will be represented in the Fund's portfolio.
It is expected that investments will include companies of varying size as
measured by assets, sales or capitalization.

The Fund generally invests in equity securities of established companies listed
on U.S. or foreign securities exchanges, but also may invest in securities
traded over-the-counter. It also may invest in debt securities convertible into
common stock, and convertible and non-convertible preferred stock, and
fixed-income securities of governments, government agencies, supranational
agencies and companies when the Adviser believes the potential for appreciation
will equal or exceed that available from investments in equity securities. These
debt and fixed-income securities will be predominantly investment-grade
securities, that is, those rated Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P or those of equivalent quality as determined by the Adviser. The Fund
may not invest more than 5% of its total assets in debt securities rated Baa or
below by Moody's, or BBB or below by S&P or deemed by the Adviser to be of
comparable quality (commonly referred to as "high yield" or "junk" bonds) (see
"Additional information about policies and investments --Risk factors").

The Fund may invest in zero coupon securities which pay no cash income and are
issued at substantial discounts from their value at maturity. When held to
maturity, their entire income, which consists of accretion of discount, comes
from the difference between the issue price and their value at maturity.
Fixed-income securities and cash equivalents (including foreign money market
instruments, such as bankers' acceptances, certificates of deposit, commercial
paper, short-term government and corporate obligations and repurchase
agreements) may be held for temporary investment purposes and for liquidity. In
addition, for temporary defensive purposes, the Fund may vary from its
investment policies during periods when the Adviser determines that it is
advisable to do so because of conditions in the securities markets or other
economic or political conditions. During such periods, the Fund may hold without
limit cash and cash equivalents. It is impossible to accurately predict for how
long such alternative strategies may be utilized. The Fund may invest in
closed-end investment companies holding foreign securities and may make loans of
portfolio securities. In addition, the Fund may engage in strategic
transactions.

Why invest in the Fund?

The management of the Fund believes that there is substantial opportunity for
long-term capital growth from a professionally managed portfolio of securities
selected from the U.S. and foreign equity markets. This global investment
framework seeks to take advantage of the investment opportunities created by the
global economy. The world has become highly integrated in economic, industrial
and financial terms. Companies increasingly operate globally as they purchase
raw materials, produce and sell their products and raise capital. As a result,

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international trends such as movements in currency and trading relationships are
becoming more important to many industries than purely domestic influences. To
understand a company's business, it is frequently more important to understand
how it is linked to the world economy than whether or not it is, for example, a
U.S., French or Swiss company. Just as a company takes a global perspective in
deciding where to operate, so too may an investor benefit from looking globally
in deciding which industries are growing, which producers are efficient and
which companies' shares are undervalued. The Fund affords the investor access to
opportunities wherever they arise, without being constrained by the location of
a company's headquarters or the trading market for its shares.

The Fund is designed for investors seeking worldwide equity opportunities in
developed, newly industrialized and developing countries (some of these
developing countries are located in Latin America and Africa). Like consumers
who seek to buy a good product wherever it is made, the Fund seeks to find
investment opportunities regardless of location. Because the Fund's portfolio
invests globally, it provides the potential to augment returns available from
the U.S. stock market. In addition, since U.S. and foreign markets do not always
move in step with each other, a global portfolio will be more diversified than
one invested solely in U.S. securities.

Investing directly in foreign securities is usually impractical for most
investors because it presents complications and extra costs. Investors often
find it difficult to arrange purchases and sales, to obtain current information,
to hold securities in safekeeping and to convert the value of their investments
from foreign currencies into dollars. The Fund manages these problems for the
investor. With a single investment, the investor has a diversified worldwide
investment portfolio which is managed actively by experienced professionals. The
Adviser has had many years of experience investing in foreign markets and
dealing with trading, custody and currency transactions around the world. The
Adviser has the benefit of information it receives from worldwide sources and
believes the Fund affords investors an efficient and cost-effective method of
investing worldwide.

Scudder Global Fund is designed for long-term investors who can accept
international investment risk. The dollar value of the Fund's portfolio
securities fluctuates with changes in market and economic conditions abroad and
with changes in relative currency values. Changes in the Fund's share price may
not be related to changes in the U.S. stock and bond markets. As with any
long-term investment, the value of shares when sold may be higher or lower than
when purchased. For additional information concerning risks of international
investment, see "Risks of global investing."

Risks of global investing

Global investing involves economic and political considerations not typically
found in U.S. markets. These considerations, which may favorably or unfavorably
affect the Fund's performance, include changes in exchange rates and exchange
rate controls (which may include suspension of the ability to transfer currency
from a given country), costs incurred in conversions between currencies,
non-negotiable brokerage commissions, less publicly available information,
different accounting standards, lower trading volume and greater market
volatility, the difficulty of enforcing obligations in other countries, less
securities regulation, different tax provisions (including withholding on
dividends and interest paid to the Fund), war, expropriation, political and
social instability, and diplomatic developments.

Further, the settlement period of securities transactions in foreign markets may
be longer than in domestic markets. These considerations generally are more of a
concern in developing countries. For example, the possibility of revolution and

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<PAGE>

the dependence on foreign economic assistance may be greater in these countries
than in developed countries. The management of the Fund seeks to mitigate the
risks associated with these considerations through diversification and active
professional management.

The Fund is designed for long-term investors who can accept international
investment risk. Since the Fund normally will be invested in both U.S. and
foreign securities markets, changes in the Fund's share price may have a low
correlation with movements in the U.S. markets. The Fund's share price will
reflect the movements of both the different stock and bond markets in which it
is invested and the currencies in which the investments are denominated; the
strength or weakness of the U.S. dollar against foreign currencies may account
for part of the Fund's investment performance. As with any long-term investment,
the value of shares when sold may be higher or lower than when purchased.
Because of the Fund's global investment policies and the investment
considerations discussed above, investment in shares of the Fund should not be
considered a complete investment program.

Scudder Emerging Markets Growth Fund

Investment objective and policies

Scudder Emerging Markets Growth Fund, a non-diversified series of Scudder
International Fund, Inc., seeks long-term growth of capital primarily through
equity investment in emerging markets around the globe.

The Fund will invest in the Asia-Pacific region, Latin America, less developed
nations in Europe, the Middle East and Africa, focusing investments in countries
and regions where there appears to be the best value and appreciation potential,
subject to considerations of portfolio diversification and liquidity. In the
opinion of the Adviser, many emerging nations around the globe are likely to
continue to experience economic growth rates well in excess of those found in
the U.S., Japan and other developed markets. In the opinion of the Adviser, this
economic growth should translate into strong stock market performance over the
long term.

While the Fund offers the potential for substantial price appreciation over
time, it also involves above-average investment risk. The Fund is designed as a
long-term investment and not for short-term trading purposes. It should not be
considered a complete investment program. The Fund's net asset value (price) can
fluctuate significantly with changes in stock market levels, political
developments, movements in currencies, investment flows and other factors. To
encourage a long-term investment horizon, a 2% redemption and exchange fee,
described more fully below, is payable to the Fund for the benefit of remaining
shareholders on shares held less than one year.

Investments

At least 65% of the Fund's total assets will be invested in the equity
securities of emerging market issuers. The Fund considers "emerging markets" to
include any country that is defined as an emerging or developing economy by any
one of the International Bank for Reconstruction and Development (i.e., the
World Bank), the International Finance Corporation or the United Nations or its
authorities. The Fund intends to allocate its investments among at least three
countries at all times, and does not expect to concentrate in any particular
industry. There is no limitation, however, on the amount the Fund can invest in
a specific country or region of the world.

The Fund deems an issuer to be located in an emerging market if:

o the issuer is organized under the laws of an emerging market country;

o the issuer's principal securities trading market is in an emerging market; or

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o at least 50% of the issuer's non-current assets, capitalization, gross revenue
or profit in any one of the two most recent fiscal years is derived (directly
or indirectly through subsidiaries) from assets or activities located in
emerging markets.

The Fund's equity investments are common stock, preferred stock (either
convertible or non-convertible), depository receipts and warrants. Equity
securities may also be purchased through rights. Securities may be listed on
securities exchanges, traded over-the-counter, or have no organized market. The
Fund may invest in illiquid or restricted securities.

The Fund may invest up to 35% of its total assets in emerging market and
domestic debt securities if the Adviser determines that the capital appreciation
of debt securities is likely to equal or exceed the capital appreciation of
equity securities. Debt instruments held by the Fund take the form of bonds,
notes, bills, debentures, convertible securities, warrants, bank obligations,
short-term paper, loan participations, loan assignments, and trust interests.

Under normal market conditions, the Fund may invest up to 35% of its assets in
equity securities of issuers in the U.S. and other developed markets. In
evaluating the appropriateness of such investments for the Fund, the Adviser
takes into account the issuer's involvement in the emerging markets and the
potential impact of that involvement on business results. The Fund may also
purchase securities on a when-issued or forward delivery basis, enter into
reverse repurchase agreements and may engage in various strategic transactions,
including derivatives.

For temporary defensive purposes, the Fund may hold, without limit, debt
instruments as well as cash and cash equivalents, including foreign and domestic
money market instruments, short-term government and corporate obligations, and
repurchase agreements. It is impossible to accurately predict how long such
alternative strategies will be utilized. The Fund may also invest in closed-end
investment companies investing primarily in the emerging markets. To the extent
the Fund invests in such closed-end investment companies, shareholders will
incur certain duplicate fees and expenses. Such closed-end investment company
investments will generally only be made when market access or liquidity
restricts direct investment in the market.

More information about the investments and policies of the Fund is provided
under "Additional information about policies and investments."

Investment strategy

The Adviser takes a top-down approach to evaluating investments for the Fund,
using extensive fundamental and field research. The process begins with a study
of the economic fundamentals of each country and region as well as an
examination of regional themes such as growing trade, increases in direct
foreign investment and deregulation of capital markets. Understanding regional
themes allows the Adviser to identify the industries and companies most likely
to benefit from the political, social and economic changes taking place in a
given region of the world.

Within a market, the Adviser looks for individual companies with exceptional
business prospects, which may be due to market dominance, unique franchises,
high growth potential, or innovative services, products or technologies. The
Adviser seeks to identify companies with favorable potential for appreciation
through growing earnings or greater market recognition over time. While these
companies may be among the largest in their local markets, they may be small by
the standards of U.S. stock market capitalization.

Why invest in the Fund?

This Fund is designed as a convenient, low cost way for investors to participate
in the growth opportunities afforded by a broad range of emerging markets.
Through one actively managed, pure no-load(TM) fund, investors can tap into

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developing regions throughout the world, without the burden of deciding where
and when to invest on their own.

The Adviser believes the emerging markets will continue to experience some of
the fastest rates of economic growth over the next decade and continue to offer
attractive stock market potential. In the Pacific Rim and other parts of Asia,
economies are typically characterized by large, relatively low cost labor pools,
high savings rates and worldwide demand for their products. The Adviser believes
that the economies of the Pacific Basin, although experiencing many economic
challenges currently, could return to above average rates of economic growth
within a few years. In Latin America, the region has benefited from governmental
efforts to reduce inflation and budget deficits, invest in much needed
infrastructure, deregulate or privatize industry and liberalize their capital
markets. Eastern European countries are experiencing strong economic growth as
capitalism takes hold. Many African and Middle Eastern countries are also
benefiting from the shift to market based economies and from improved fiscal and
monetary discipline. These regions, as a whole, are attracting a growing pool of
foreign investment and benefiting from growing regional trade, which is helping
fuel rapid economic growth. Stock markets in many of these countries have
outperformed our own and those of the other more developed countries.

Investors should be aware that participation in the Fund involves special
considerations and risks not typically associated with a mutual fund investing
principally in the securities of U. S. issuers. However, movements in the Fund's
share price may have a low correlation with movements in the U.S. markets, so
adding shares of the Fund to an investor's portfolio may, over time, increase
the investor's overall diversification, and reduce overall risk.

Investing directly in emerging market securities is usually impractical for
individual investors. Investors frequently find it difficult to arrange
purchases and sales, obtain current market, industry or corporate information,
hold securities for safekeeping, and convert profits from foreign currencies to
U.S. dollars. The Fund offers professional management and administrative
convenience to shareholders wishing to invest in these more dynamic, emerging
markets of the world.

Additional information about policies and investments

Investment restrictions

Each Fund has certain investment restrictions which are designed to reduce a
Fund's investment risk. Fundamental investment restrictions may not be changed
without a vote of shareholders; non-fundamental investment restrictions may be
changed by a vote of a Fund's Board of Trustees or Directors.

As a matter of fundamental policy, each Fund may not borrow money, except as
permitted under Federal law. Further, as a matter of non-fundamental policy,
each Fund may not borrow money in an amount greater than 5% of total assets,
except for temporary or emergency purposes, although each Fund may engage up to
5% of total assets in reverse repurchase agreements or dollar rolls.

As a matter of fundamental policy, each Fund may not make loans except through
the lending of portfolio securities, the purchase of debt securities or
interests in indebtedness, or through repurchase agreements. Each Fund, except
Scudder Growth and Income Fund, has adopted a non-fundamental policy restricting
the lending of portfolio securities to no more than 5% of total assets. Scudder
Growth and Income Fund has adopted a non-fundamental policy restricting the
lending of portfolio securities to no more than 30% of total assets.

A complete description of these and other policies and restrictions is contained

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under "Investment Restrictions" in each Fund's Statement of Additional
Information.

Other Funds may invest to a limited extent in the investments described below.
Please refer to each Fund's "Investment objective(s) and policies" section above
for additional information.

Common stocks

Scudder Growth and Income Fund, Scudder Development Fund, Scudder Global Fund
and Scudder Emerging Markets Growth Fund may invest in common stocks. Common
stock is issued by companies to raise cash for business purposes and represents
a proportionate interest in the issuing companies. Therefore, each Fund
participates in the success or failure of any company in which it holds stock.
The market values of common stock can fluctuate significantly, reflecting the
business performance of the issuing company, investor perception and general
economic or financial market movements. Smaller companies are especially
sensitive to these factors and may even become valueless. Despite the risk of
price volatility, however, common stocks also offer the greatest potential for
gain on investment, compared to other classes of financial assets such as bonds
or cash equivalents.

Convertible securities

Each Fund, with the exception of Scudder U.S. Treasury Money Fund, may invest in
convertible securities which may offer higher income than the common stocks into
which they are convertible. The convertible securities in which the Funds may
invest include fixed-income or zero coupon debt securities which may be
converted or exchanged at a stated or determinable exchange ratio into
underlying shares of common stock. Prior to their conversion, convertible
securities may have characteristics similar to both nonconvertible debt
securities and equity securities.

Debt securities

Although the debt securities in which Scudder Emerging Markets Growth Fund
invests are predominantly denominated in U.S. dollars, the Fund may also invest
in debt securities denominated in foreign currencies. Such securities may be
rated below investment-grade; that is, rated below Baa by Moody's or below BBB
by S&P, or may be unrated but equivalent to those rated below investment-grade
by internationally recognized rating agencies such as S&P or Moody's. Scudder
Emerging Markets Growth Fund may also invest in "Brady Bonds," which are debt
securities issued under the framework of the Brady Plan as a mechanism for
debtor countries to restructure their outstanding bank loans. Most "Brady Bonds"
have their principal collaterized by zero coupon U.S. Treasury bonds.

Dollar roll transactions

Scudder Income Fund may enter into dollar roll transactions with selected banks
and broker/dealers. Dollar roll transactions are treated as reverse repurchase
agreements for purposes of the Fund's borrowing restrictions and consist of the
sale by the Fund of mortgage- backed securities, together with a commitment to
purchase similar, but not identical, securities at a future date at the same
price. In addition, the Fund receives compensation as consideration for entering
into the commitment to repurchase. The compensation is paid in the form of a
fee. Dollar rolls may be renewed after cash settlement and initially may involve
only a firm commitment agreement by the Fund to buy the security.

Foreign securities

Scudder Global Fund and Scudder Emerging Markets Growth Fund may invest in
foreign securities. While Scudder Income Fund, Scudder Growth and Income Fund
and Scudder Development Fund generally emphasize investments in companies
domiciled in the U.S., each may invest in listed and unlisted foreign securities
that meet the same criteria as the Fund's domestic holdings. These three Funds
may invest in foreign securities when the anticipated performance of the foreign
securities is believed by the Adviser to offer more return potential than

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<PAGE>

domestic alternatives in keeping with the investment objective of the Fund.
Scudder Income Fund may invest in certificates of deposit issued by foreign and
of domestic branches of U.S. banks. Scudder Growth and Income Fund may enter
into forward foreign currency exchange contracts in connection with the purchase
and sale of securities denominated in a foreign currency. Scudder Development
Fund has no current intention of investing more than 20% of its net assets in
foreign securities.

Illiquid securities

Each Fund may invest a portion of its assets in securities for which there is
not an active trading market, or which have resale restrictions ("restricted
securities"). These types of securities generally offer a higher return than
more readily marketable securities, but carry the risk that the Funds may not be
able to dispose of them at an advantageous time or price. Some restricted
securities purchased by the Funds, however, may be considered liquid despite
resale restrictions, since they can be sold to other qualified institutional
buyers under a rule of the Securities and Exchange Commission (Rule 144A). Upon
approval from Scudder Income Fund's Board of Trustees and Scudder Emerging
Markets Growth Fund's Board of Directors, the Adviser may determine which Rule
144A securities will be considered liquid.

Indexed securities

Scudder Income Fund may invest in indexed securities, the value of which is
linked to currencies, interest rates, commodities, indices or other financial
indicators ("reference instruments"). The interest rate or (unlike most
fixed-income securities) the principal amount payable at maturity of an indexed
security may be increased or decreased, depending on changes in the value of the
reference instrument.

Mortgage and other asset-backed securities

Scudder Income Fund may invest in mortgage-backed securities, which are
securities representing interests in pools of mortgage loans. These securities
provide shareholders with payments consisting of both interest and principal as
the mortgages in the underlying mortgage pools are paid off.

The timely payment of principal and interest on mortgage-backed securities
issued or guaranteed by the Government National Mortgage Association ("GNMA") is
backed by GNMA and the full faith and credit of the U.S. Government. These
guarantees, however, do not apply to the market value or yield of
mortgage-backed securities or to the value of Fund shares. Also, GNMA and other
mortgage-backed securities may be purchased at a premium over the maturity value
of the underlying mortgages. This premium is not guaranteed and will be lost if
prepayment occurs. In addition, the Fund may invest in mortgage-backed
securities issued by other issuers, such as the Federal National Mortgage
Association ("FNMA"), which are not guaranteed by the U.S. Government. Moreover,
the Fund may invest in debt securities which are secured with collateral
consisting of mortgage-backed securities and in other types of mortgage-related
securities.

The Fund may also invest in securities representing interests in pools of
certain other consumer loans, such as automobile loans or credit card
receivables. In some cases, principal and interest payments are partially
guaranteed by a letter of credit from a financial institution.

Real estate investment trusts

Scudder Income Fund and Scudder Growth and Income Fund may purchase real estate
investment trusts ("REITs"), which pool investors' funds for investment
primarily in income-producing real estate or real estate-related loans or
interests. REITs can generally be classified as equity REITs, mortgage REITs and
hybrid REITs. Equity REITs, which invest the majority of their assets directly
in real property, derive their income primarily from rents. Equity REITs can
also realize capital gains by selling properties that have appreciated in value.

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<PAGE>

Mortgage REITs, which invest the majority of their assets in real estate
mortgages, derive their income primarily from interest payments on real estate
mortgages in which they are invested. Hybrid REITs combine the characteristics
of both equity REITs and mortgage REITs.

Repurchase agreements

As a means of earning income for periods as short as overnight, each Fund may
enter into repurchase agreements with selected banks and broker/dealers. Under a
repurchase agreement, a Fund acquires securities, subject to the seller's
agreement to repurchase at a specified time and price.

Scudder Income Fund may enter into repurchase commitments with any party deemed
creditworthy by the Adviser, including foreign banks and broker/dealers, if the
transaction is entered into for investment purposes and the counterparty's
creditworthiness is at least equal to that of issuers of securities which the
Fund may purchase.

Scudder Emerging Markets Growth Fund may also enter into repurchase commitments
for investment purposes for periods of 30 days or more. Such commitments involve
investment risk similar to that of debt securities. Please see "Risk factors --
Repurchase Agreements" for more information.

Securities lending

Scudder Growth and Income Fund may lend portfolio securities to registered
broker/dealers as a means of increasing its income. These loans may not exceed
30% of the Fund's total assets taken at market value. Loans of portfolio
securities will be secured continuously by collateral consisting of U.S.
Government securities or fixed-income obligations that are maintained at all
times in an amount at least equal to the current market value of the loaned
securities. The Fund will earn any interest or dividends paid on the loaned
securities and may share with the borrower some of the income received on the
collateral for the loan or will be paid a premium for the loan.

Investment company securities

Securities of other investment companies may be acquired by Scudder Global Fund
to the extent permitted under the 1940 Act. Investment companies incur certain
expenses such as management, custodian, and transfer agency fees, and,
therefore, any investment by the Fund in shares of other investment companies
may be subject to such duplicate expenses.

Trust preferred securities

Scudder Income Fund may invest in special purpose trust securities ("trust
preferred securities"), which are hybrid instruments issued by a special purpose
trust (the "Special Trust"), the entire equity interest of which is owned by a
single issuer. The proceeds of the issuance to the Fund of trust preferred
securities are typically used to purchase a junior subordinated debenture, and
distributions from the Special Trust are funded by the payments of principal and
interest on the subordinated debenture. These securities tend to be affected by
interest rates in a manner similar to debt securities.

When-issued securities

Scudder U.S. Treasury Money Fund, Scudder Income Fund and Scudder Emerging
Markets Growth Fund may purchase securities on a when-issued or forward delivery
basis, for payment and delivery at a later date. The price and yield are
generally fixed on the date of commitment to purchase. During the period between
purchase and settlement, no interest accrues to the Fund. At the time of
settlement, the market value of the security may be more or less than the
purchase price.

Zero coupon securities

Scudder Income Fund, Scudder Growth and Income Fund and Scudder Global Fund may
invest in zero coupon securities which pay no cash income and are sold at
substantial discounts from their maturity value. When held to maturity, their

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<PAGE>

entire income, which consists of accretion of discount, comes from the
difference between the issue price and their maturity value.

Strategic Transactions and derivatives

Each of the Funds, with the exception of Scudder U.S. Treasury Money Fund, may,
but is not required to, utilize various other investment strategies as described
below to hedge various market risks (such as interest rates, currency exchange
rates, and broad or specific equity or fixed-income market movements), to manage
the effective maturity or duration of the fixed-income securities in the Funds'
portfolios or to enhance potential gain. These strategies may be executed
through the use of derivative contracts. Such strategies are generally accepted
as a part of modern portfolio management and are regularly utilized by many
mutual funds and other institutional investors. Techniques and instruments may
change over time as new instruments and strategies are developed or regulatory
changes occur.

In the course of pursuing these investment strategies, the Funds may purchase
and sell exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments,
purchase and sell financial futures contracts and options thereon, enter into
various interest rate transactions such as swaps, caps, floors or collars and
enter into various currency transactions such as currency forward contracts,
currency futures contracts, currency swaps or options on currencies or currency
futures (collectively, all the above are called "Strategic Transactions").

Strategic Transactions may be used without limit to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Funds' portfolios resulting from securities markets or currency exchange
rate fluctuations, to protect the Funds' unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of fixed-income
securities in the Funds' portfolios, or to establish a position in the
derivatives markets as a temporary substitute for purchasing or selling
particular securities. Some Strategic Transactions may also be used to enhance
potential gain although no more than 5% of a Fund's assets will be committed to
Strategic Transactions entered into for non-hedging purposes. Any or all of
these investment techniques may be used at any time and in any combination, and
there is no particular strategy that dictates the use of one technique rather
than another, as use of any Strategic Transaction is a function of numerous
variables including market conditions. The ability of the Funds to utilize these
Strategic Transactions successfully will depend on the Adviser's ability to
predict pertinent market movements, which cannot be assured. The Funds will
comply with applicable regulatory requirements when implementing these
strategies, techniques and instruments. Strategic Transactions involving
financial futures and options thereon will be purchased, sold or entered into
only for bona fide hedging, risk management or portfolio management purposes and
not to create leveraged exposure in a Fund. Please refer to "Risk
factors--Strategic Transactions and derivatives" for more information.

Risk factors

Each Fund's risks are determined by the nature of the securities held and the
portfolio management strategies used by the Adviser. The following are
descriptions of certain risks related to the investments and techniques that a
Fund may use from time to time.

Borrowing. Although the principal of a Fund's borrowing will be fixed, a Fund's
assets may change in value during the time a borrowing is outstanding,
increasing exposure to capital risk.

Convertible securities. While convertible securities generally offer lower
yields than nonconvertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stock. Convertible

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<PAGE>

securities entail less credit risk than the issuer's common stock.

Debt securities. Securities rated BBB by S&P or Baa by Moody's are neither
highly protected nor poorly secured. These securities normally pay higher yields
but involve potentially greater price variability than higher-quality
securities. These securities are regarded as having adequate capacity to repay
principal and pay interest, although adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to do so. Moody's
considers bonds it rates Baa to have speculative elements as well as
investment-grade characteristics.

Risks of debt securities rated below investment-grade: Securities rated below
investment-grade (those rated lower than Baa or BBB) are commonly referred to as
"junk bonds." These securities can entail greater price volatility and involve a
higher degree of speculation with respect to the payment of principal and
interest than higher quality fixed-income securities. The market prices of such
lower rated debt securities may decline significantly in periods of general
economic difficulty. In addition, the trading market for these securities is
generally less liquid than for higher rated securities, and a Fund may have
difficulty disposing of these securities at the time it wishes to do so. The
lack of a liquid secondary market for certain securities may also make it more
difficult for a Fund to obtain accurate market quotations for purposes of
valuing its portfolio and calculating its net asset value. Should the rating of
any security held by a Portfolio be downgraded after the time of purchase, the
Adviser will determine whether it is in the best interest of the Portfolio to
retain or dispose of the security.

Scudder Income Fund may invest up to 20% of its total assets in debt securities
rated lower than BBB/Baa or, if unrated, of equivalent quality as determined by
the Adviser, but will not purchase bonds rated below B by Moody's or S&P or
their equivalent. Scudder Global Fund may invest no more than 5% of its total
assets in debt securities rated BBB/Baa or below or deemed by the Adviser to be
of comparable quality. Scudder Emerging Markets Growth Fund may invest in debt
securities with varying degrees of credit quality. Both Scudder Global Fund and
Scudder Emerging Markets Growth Fund may invest in securities which are rated as
low as C by Moody's or D by S&P at the time of purchase. Such securities may be
in default with respect to payment of principal or interest.

Dollar roll transactions. If the broker/dealer to whom a Fund sells the
securities underlying a dollar roll transaction becomes insolvent, the Fund's
right to purchase or repurchase the securities may be restricted; the value of
the securities may change adversely over the term of the dollar roll; the
securities that the Fund is required to repurchase may be worth less than the
securities that the Fund originally held, and the return earned by the Fund with
the proceeds of a dollar roll may not exceed transaction costs.

Foreign securities. Investments in foreign securities involve special
considerations due to limited information, higher brokerage costs, different
accounting standards, thinner trading markets as compared to domestic markets
and the likely impact of foreign taxes on the yield from debt securities. They
may also entail other risks, such as the possibility of one or more of the
following: imposition of dividend or interest withholding or confiscatory taxes;
currency blockages or transfer restrictions; expropriation, nationalization or
other adverse political or economic developments; less government supervision
and regulation of securities exchanges, brokers and listed companies; and the
difficulty of enforcing obligations in other countries. Purchases of foreign
securities are usually made in foreign currencies and, as a result, a Fund may
incur currency conversion costs and may be affected favorably or unfavorably by

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<PAGE>

changes in the value of foreign currencies against the U.S. dollar.

Further, it may be more difficult for a Fund's agents to keep currently informed
about corporate actions which may affect the prices of portfolio securities.
Communications between the U.S. and foreign countries may be less reliable than
within the U.S., increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities. A Fund's ability
and decisions to purchase and sell portfolio securities may be affected by laws
or regulations relating to the convertibility and repatriation of assets.

Illiquid investments. The absence of a trading market can make it difficult to
ascertain a market value for illiquid or restricted investments. Disposing of
illiquid or restricted investments may involve time-consuming negotiation and
legal expenses, and it may be difficult or impossible for a Fund to sell them
promptly at an acceptable price.

Indexed securities. Indexed securities may be positively or negatively indexed,
so that appreciation of the reference instrument may produce an increase or a
decrease in the interest rate or value at maturity of the security. In addition,
the change in the interest rate or value at maturity of the security may be some
multiple of the change in the value of the reference instrument. Thus, in
addition to the credit risk of the security's issuer, a Fund will bear the
market risk of the reference instrument.

Investing in emerging growth companies. The investment risk associated with
emerging growth companies, which are generally small to medium-size, is higher
than that normally associated with larger, older companies due to the greater
business risks of small size, the relative age of the company, limited product
lines, distribution channels and financial and managerial resources. Further,
there is typically less publicly available information concerning smaller
companies than for larger, more established ones.

The securities of small and medium-size companies are often traded
over-the-counter and may not be traded in the volumes typical on a national
securities exchange. Consequently, in order to sell this type of holding, a Fund
may need to discount the securities from recent prices or dispose of the
securities over a long period of time. The prices of this type of security may
be more volatile than those of larger companies which are often traded on a
national securities exchange.

Investing in emerging markets. Securities of many issuers in emerging markets
may be less liquid and more volatile than securities of comparable domestic
issuers. Emerging markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
not kept pace with the volume of securities transactions, making it difficult to
conduct such transactions. Delays in settlement could result in temporary
periods when a portion of the assets of a Fund is uninvested and no return is
earned thereon.

The inability of a Fund to make intended security purchases due to settlement
problems could cause the Fund to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to settlement problems could
result either in losses to a Fund due to subsequent declines in the value of
those securities or, if the Fund has entered into a contract to sell a security,
in possible liability to the purchaser. Costs associated with transactions in
foreign securities are generally higher than costs associated with transactions
in U.S. securities. Such transactions also involve additional costs for the
purchase or sale of foreign currency.

Certain emerging markets may require governmental approval for the repatriation
of investment income, capital or the proceeds of sales of securities by foreign

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<PAGE>

investors. In addition, if a deterioration occurs in an emerging market's
balance of payments or for other reasons, a country could impose temporary
restrictions on foreign capital remittances. A Fund could be adversely affected
by delays in, or a refusal to grant, any required governmental approval for
repatriation of capital, as well as by the application to the Fund of any
restrictions on investments.

Throughout the last decade many emerging markets have experienced, and continue
to experience, high rates of inflation. In certain countries inflation has at
times accelerated rapidly to hyperinflationary levels, creating a negative
interest rate environment and sharply eroding the value of outstanding financial
assets in those countries. Increases in inflation could have an adverse effect
on a Fund's non-dollar denominated securities.

Individual foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate of inflation,
capital reinvestment, resources, self-sufficiency and balance of payments
position. The securities markets, values of securities, yields and risks
associated with securities markets in different countries may change
independently of each other.

Securities traded in certain emerging European securities markets may be subject
to risks due to the inexperience of financial intermediaries, the lack of modern
technology and the lack of a sufficient capital base to expand business
operations. Furthermore, there can be no assurance that a Fund's investments in
Eastern Europe would not be expropriated, nationalized or otherwise confiscated.
Finally, any change in the leadership or policies of Eastern European countries,
or the countries that exercise a significant influence over those countries, may
halt the expansion of or reverse the liberalization of foreign investment
policies and adversely affect existing investment opportunities. For a more
complete description of the risks of investing in emerging markets, please refer
to the Fund's Statement of Additional Information.

Mortgage and other asset-backed securities. Unscheduled or early payments on the
underlying mortgages may shorten the securities' effective maturities and lessen
their growth potential. A Fund may agree to purchase or sell these securities
with payment and delivery taking place at a future date. A decline in interest
rates may lead to a faster rate of repayment of the underlying mortgages, and
expose the Fund to a lower rate of return upon reinvestment. To the extent that
such mortgage-backed securities are held by a Fund, the prepayment right of
mortgagors may limit the increase in net asset value of the Fund because the
value of the mortgage-backed securities held by the Fund may not appreciate as
rapidly as the price of non-callable debt securities. Asset-backed securities
are subject to the risk of prepayment and the risk that the underlying loans
will not be repaid. Because principal may be prepaid at any time,
mortgage-backed securities may involve significantly greater price and yield
volatility than traditional debt securities.

Non-diversified investment company. Scudder Emerging Markets Growth Fund is
classified as a non-diversified investment company under the Investment Company
Act of 1940 (the "1940 Act"), which means that the Fund is not limited by the
1940 Act in the proportion of its assets that it may invest in the obligations
of a single issuer. The investment of a large percentage of the Fund's assets in
the securities of a small number of issuers may cause the Fund's share price to
fluctuate more than that of a diversified investment company.

Real estate investment trusts. Investment in REITs may subject a Fund to risks
similar to those associated with the direct ownership of real estate (in
addition to securities markets risks). REITs are sensitive to factors such as
changes in real estate values and property taxes, interest rates, cash flow of

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<PAGE>

underlying real estate assets, supply and demand, and the management skill and
creditworthiness of the issuer. REITs may also be affected by tax and regulatory
requirements.

Repurchase agreements. If the seller under a repurchase agreement becomes
insolvent, a Fund's right to dispose of the securities may be restricted, or the
value of the securities may decline before the Fund is able to dispose of them.
In the event of the commencement of bankruptcy or insolvency proceedings with
respect to the sellers of the securities before repurchase under a repurchase
agreement, a Fund may encounter delay and incur costs including a decline in the
value of the securities, before being able to sell the securities. Also, if a
seller defaults, the value of such securities may decline before the Fund is
able to dispose of them.

Some repurchase commitment transactions may not provide the Fund with collateral
marked-to-market during the term of the commitment.

Securities lending. From time to time, Scudder Growth and Income Fund may lend
its portfolio securities to registered broker/dealers as described above. The
risks of lending portfolio securities, as with other extensions of secured
credit, consist of possible delays in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially. Loans will be made to registered broker/dealers
deemed by the Adviser to be of good standing and will not be made unless, in the
judgment of the Adviser, the consideration to be earned from such loans will
justify the risk.

Trust preferred securities. If payments on the underlying junior subordinated
debentures held by the Special Trust are deferred by the debenture issuer, the
debentures would be treated as original issue discount ("OID") obligations for
the remainder of their term. As a result, holders of trust preferred securities,
such as Scudder Income Fund, would be required to accrue daily for Federal
income tax purposes, their share of the stated interest and the de minimis OID
on the debentures (regardless of whether the Fund receives any cash
distributions from the Special Trust), and the value of trust preferred
securities would likely be negatively affected. Trust preferred securities may
be subject to mandatory prepayment under certain circumstances. The market
values of trust preferred securities may be more volatile than those of
conventional debt securities.

Zero coupon securities. Zero coupon securities are subject to greater market
value fluctuations from changing interest rates than debt obligations of
comparable maturities that make current cash distributions of interest.

Strategic Transactions and derivatives. Strategic Transactions, including
derivative contracts, have risks associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Adviser's view as to certain market movements is incorrect, the risk that the
use of such Strategic Transactions could result in losses greater than if they
had not been used. Use of put and call options may result in losses to a Fund,
force the sale or purchase of portfolio securities at inopportune times or for
prices higher than (in the case of put options) or lower than (in the case of
call options) current market values, limit the amount of appreciation a Fund can
realize on its investments or cause a Fund to hold a security it might otherwise
sell.

The use of currency transactions can result in a Fund incurring losses as a
result of a number of factors including the imposition of exchange controls,
suspension of settlements or the inability to deliver or receive a specified
currency. The use of options and futures transactions entails certain other
risks. In particular, the variable degree of correlation between price movements
of futures contracts and price movements in the related portfolio position of a
Fund creates the possibility that losses on the hedging instrument may be

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<PAGE>

greater than gains in the value of a Fund's position.

In addition, futures and options markets may not be liquid in all circumstances
and certain over-the-counter options may have no markets. As a result, in
certain markets, a Fund might not be able to close out a transaction without
incurring substantial losses, if at all. Although the use of futures contracts
and options transactions for hedging should tend to minimize the risk of loss
due to a decline in the value of the hedged position, at the same time they tend
to limit any potential gain which might result from an increase in value of such
position.

Finally, the daily variation margin requirements for futures contracts would
create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized. The Strategic Transactions that each Fund
may use, with the exception of U.S. Treasury Money Fund, are described more
fully in each Fund's Statement of Additional Information.

Distribution and performance information

Dividends and capital gains distributions

Scudder U.S. Treasury Money Fund's dividends from net investment income are
declared daily and distributed monthly. The Fund takes into account realized
gains and losses on securities held for one year or less (short-term capital
gain/loss) in its daily dividend. Scudder Income Fund and Scudder Growth and
Income Fund each intend to distribute dividends from its net investment income
quarterly in March, June, September and December. Scudder Development Fund and
Scudder Emerging Markets Growth Fund intend to distribute any dividends from net
investment income in December. Scudder Global Fund intends to distribute any
dividends from net investment income in November or December.

Scudder U.S. Treasury Money Fund, Scudder Income Fund, Scudder Growth and Income
Fund and Scudder Global Fund intend to distribute any net realized capital gains
after utilization of capital loss carryforwards, if any, in November or December
to prevent application of a federal excise tax. An additional distribution may
be made if necessary. Scudder Development Fund and Scudder Emerging Markets
Growth Fund intend to distribute any net realized capital gains after
utilization of capital loss carryforwards, if any, in December to prevent
application of a federal excise tax. An additional distribution may be made, if
necessary.

Any dividends or capital gains distributions declared in October, November or
December with a record date in such a month and paid during the following
January will be treated by shareholders for federal income tax purposes as if
received on December 31 of the calendar year declared. Distributions for Scudder
Emerging Markets Growth Fund are not subject to the 2% redemption fee, whether
paid in cash or reinvested.

According to preference, shareholders may receive distributions in cash or have
them reinvested in additional shares of the Fund. If an investment is in the
form of a retirement plan, all dividends and capital gains distributions must be
reinvested into the shareholder's account.

Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable to
individuals at a maximum 20% or 28% capital gains rate (depending on a Fund's
holding period for the assets giving rise to the gain) regardless of the length
of time shareholders have owned their shares. Short-term capital gains and any
other taxable income distributions are taxable as ordinary income. A portion of
dividends from ordinary income distributed by Scudder Growth and Income Fund may

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qualify for the dividends-received deduction for corporations. A portion of
dividends from net investment income distributed by Scudder Development Fund and
Scudder Global Fund may qualify for the dividends-received deduction for
corporations.

Shareholders of Scudder Global Fund and Scudder Emerging Markets Growth Fund may
be able to claim a credit or deduction on their income tax returns for their pro
rata portions of qualified taxes paid by the Funds to foreign countries.

Each Fund sends detailed tax information about the amount and type of its
distributions to its shareholders by January 31 of the following year.

Performance information

From time to time, quotations of a Fund's performance may be included in
advertisements, sales literature or shareholder reports. All performance figures
are historical, show the performance of a hypothetical investment and are not
intended to indicate future performance. "Total return" is the change in value
of an investment in a Fund for a specified period. The "average annual total
return" of a Fund is the average annual compound rate of return of an investment
in a Fund assuming that the investment has been held for one year, five years
and ten years as of a stated ending date. (If a Fund has not been in operation
for at least ten years, the life of the Fund will be used where applicable.)
"Cumulative total return" represents the cumulative change in value of an
investment in a Fund for various periods. All types of total return calculations
assume that all dividends and capital gains distributions during the period were
reinvested in shares of a Fund.

Performance for any of the six Funds will vary based upon, among other things,
changes in market conditions and the level of the Funds' expenses.

The "yield" of Scudder U.S. Treasury Money Fund refers to the income generated
by an investment in the Fund over a specified seven-day period. The "effective
yield" of Scudder U.S. Treasury Money Fund is expressed similarly but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested and will reflect the effects of compounding. The "SEC yield" of
Scudder Income Fund is an annualized expression of the net income generated by
the Fund over a specified 30-day (one month) period, as a percentage of the
Fund's share price on the last day of that period. This yield is calculated
according to methods required by the Securities and Exchange Commission (the
"SEC"), and therefore may not equate to the level of income paid to
shareholders.

Fund organization

Each Fund, with the exception of Scudder Emerging Markets Growth Fund, is a
diversified, open-end management investment company registered under the 1940
Act. Scudder U.S. Treasury Money Fund, Scudder Income Fund, Scudder Growth and
Income Fund and Scudder Development Fund are supervised by their respective
Boards of Trustees. Scudder Global Fund and Scudder Emerging Markets Growth Fund
are supervised by their respective Boards of Directors. Shareholders have one
vote for each share held on matters on which they are entitled to vote. The
Funds are not required to and have no current intention of holding annual
shareholder meetings, although special meetings may be called for purposes such
as electing or removing Directors or Trustees, changing fundamental investment
policies or approving an investment management agreement or advisory contract.

Shareholders will be assisted in communicating with other shareholders in
connection with removing a Director or a Trustee as if Section 16(c) of the 1940
Act were applicable.

The prospectuses of each of the six Funds are combined in this prospectus. Each
Fund offers only its own shares, yet it is possible that a Fund might become

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liable for a misstatement regarding another Fund. The Directors and Trustees of
each Fund have considered this and approved the use of a combined prospectus.

Scudder U.S. Treasury Money Fund

Scudder U.S. Treasury Money Fund was organized as a Massachusetts business trust
in April 1980. The fund changed its name from Scudder Government Money Fund on
March 1, 1991.

Scudder Income Fund

Scudder Income Fund is a series of Scudder Portfolio Trust. The Trust was
organized as a Massachusetts business trust in September 1984 and on December
31, 1984 assumed the business of its predecessor, which was organized as a
Massachusetts corporation in 1928.

Scudder Growth and Income Fund

Scudder Growth and Income Fund is a series of Scudder Investment Trust. The
Trust, formerly known as Scudder Growth and Income Fund, was organized as a
Massachusetts business trust in September 1984 and on December 31, 1984 assumed
the business of its predecessor, which was organized as a Massachusetts
corporation in May 1929.

Scudder Development Fund

Scudder Development Fund is a series of Scudder Securities Trust. The Trust was
organized as a Massachusetts business trust in October 1985 and on December 31,
1985 assumed the business of its predecessor. Its predecessor was organized as a
Delaware corporation in February 1970.

Scudder Global Fund

Scudder Global Fund is a series of Scudder Global Fund, Inc., a Maryland
corporation which was organized in May 1986.

Scudder Emerging Markets Growth Fund

Scudder Emerging Markets Growth Fund is a series of Scudder International Fund,
Inc. The Corporation was organized as a Maryland corporation in July, 1975.

Investment adviser

The Funds retain the investment management firm of Scudder Kemper Investments,
Inc., a Delaware corporation formerly known as Scudder, Stevens & Clark, Inc.,
to manage each Fund's daily investment and business affairs subject to the
policies established by the relevant Trust's Board of Trustees. The Trustees
have overall responsibility for the management of their respective funds under
Massachusetts law.

Scudder, Stevens & Clark, Inc. ("Scudder"), and Zurich Insurance Company
("Zurich"), an international insurance and financial services organization, have
formed a new global investment organization by combining Scudder's business with
that of Zurich's subsidiary, Zurich Kemper Investments, Inc. and Scudder has
changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owns approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees.

The Directors have overall responsibility for the management of Scudder Global
Fund and Scudder Emerging Markets Growth Fund under Maryland law. The Trustees
have overall responsibility for the management of Scudder U.S. Treasury Money
Fund, Scudder Income Fund, Scudder Growth and Income Fund and Scudder
Development Fund under Massachusetts law.

Each Fund's fee is payable monthly, provided that a Fund will make such interim
payments as may be requested by the Adviser not to exceed 75% of the amount of
the fee then accrued on the books of the Fund and unpaid.

For the fiscal year ended June 30, 1997, the Adviser received an investment
management fee of 0.21% of U.S. Treasury Money Fund's average daily net assets
on an annual basis. Until October 31, 1998, the Fund's Adviser has agreed to
continue the total annualized expenses of the Fund at 0.65% of average daily net
assets of the Fund.

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Scudder Income Fund and Scudder Growth and Income Fund pay the Adviser an
investment management fee that is graduated so that increases in a Fund's net
assets may result in a lower fee and decreases in a Fund's net assets may result
in a higher fee.

The Adviser has agreed to maintain the annualized expenses of Scudder Income
Fund at no more than 0.95% of the average daily net assets of the Fund until
April 30, 1999. For the year ended December 31, 1997, the Adviser received an
investment management fee of 0.61% of Scudder Income Fund's average daily net
assets on an annual basis.

For the fiscal year ended December 31, 1997, the Adviser received an investment
management fee of 0.46% of Scudder Growth and Income Fund's average daily net
assets on an annual basis.

For the fiscal year ended June 30, 1997, the Adviser received an investment
management fee of 0.98% of Scudder Development Fund's average daily net assets.
The fee is graduated so that increases in the Fund's net assets may result in a
lower fee and decreases in the Fund's net assets may result in a higher fee.
Because of the higher cost of research, this fee is higher than that charged by
most funds, but not necessarily higher than fees charged to funds with
investment objectives similar to those of the Fund.

For the fiscal year ended June 30, 1997, the Adviser received an investment
management fee of 0.95% of Scudder Global Fund's average daily net assets.
Scudder Emerging Markets Growth Fund pays the Adviser an annual fee of 1.25% of
the Fund's average daily net assets. The fees for Scudder Global Fund and
Scudder Emerging Markets Growth Fund are higher than those charged by many funds
which invest primarily in U.S. securities but not necessarily higher than the
fees charged by funds with similar investment objectives. The Adviser has agreed
to maintain the annualized expenses of Scudder Emerging Markets Growth Fund at
no more than 2.25% of the average daily net assets of the Fund from March 1,
1998 until August 31, 1998. For the fiscal year ended October 31, 1997 the
Adviser maintained expenses at no more than 2.00% of average daily net assets of
Scudder Emerging Markets Growth Fund and as a result received an investment
management fee of 0.92% of the Fund's average daily net assets.

All of a Fund's expenses are paid out of gross investment income. Shareholders
pay no direct charges or fees for investment or administrative services.

Scudder Kemper Investments, Inc. manages Scudder Global Fund and Scudder
Emerging Markets Growth Fund from its location at 345 Park Avenue, New York, New
York.

Scudder Kemper Investments, Inc. manages Scudder U.S. Treasury Money Fund,
Scudder Income Fund, Scudder Growth and Income Fund and Scudder Development Fund
from its location at Two International Place, Boston, Massachusetts.

Like other mutual funds and financial and business organizations worldwide, the
Funds could be adversely affected if computer systems on which the Funds rely,
which primarily include those used by the Adviser, its affiliates or other
service providers, are unable to correctly process date-related information on
and after January 1, 2000. This risk is commonly called the Year 2000 Issue.
Failure to successfully address the Year 2000 Issue could result in
interruptions to and other material adverse effects on the Funds' business and
operations. The Adviser has commenced a review of the Year 2000 Issue as it may
affect the Funds and is taking steps it believes are reasonably designed to
address the Year 2000 Issue, although there can be no assurances that these
steps will be sufficient. In addition, there can be no assurances that the Year
2000 Issue will not have an adverse effect on the companies whose securities are
held by the Funds or on global markets or economies generally.

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Transfer agent

Scudder Service Corporation, P.O. Box 2291, Boston, Massachusetts 02107-2291, a
subsidiary of the Adviser, is the transfer, shareholder servicing and
dividend-paying agent for the Funds.

Underwriter

Scudder Investor Services, Inc., a subsidiary of the Adviser, is the Funds'
principal underwriter. Scudder Investor Services, Inc. confirms, as agent, all
purchases of shares of the Funds. Scudder Investor Relations is a telephone
information service provided by Scudder Investor Services, Inc.

Fund accounting agent

Scudder Fund Accounting Corporation, a subsidiary of the Adviser, is responsible
for determining the daily net asset value per share and maintaining the general
accounting records of the Funds.

Custodian

Brown Brothers Harriman & Co. is the custodian for Scudder Global Fund and
Scudder Emerging Markets Growth Fund. State Street Bank and Trust Company is the
custodian for Scudder U.S. Treasury Money Fund, Scudder Income Fund, Scudder
Growth and Income Fund and Scudder Development Fund.

Transaction information

Purchasing shares

Purchases are executed at the next calculated net asset value per share after
the Funds' transfer agent receives the purchase request in good order. Purchases
are made in full and fractional shares. (See "Share price.")

By check. If you purchase shares with a check that does not clear, your purchase
will be canceled and you will be subject to any losses or fees incurred in the
transaction. Checks must be drawn on or payable through a U.S. bank. If you
purchase shares by check and redeem them within seven business days of purchase,
each Fund may hold redemption proceeds until the purchase check has cleared. If
you purchase shares by federal funds wire, you may avoid this delay. Redemption
requests by telephone, or by "Write-A-Check" for Scudder U.S. Treasury Money
Fund, prior to the expiration of the seven-day period will not be accepted.

By wire. To open a new account by wire, first call Scudder at 1-800-225-5163 to
obtain an account number. A representative will instruct you to send a
completed, signed application to the transfer agent. Accounts cannot be opened
without a completed, signed application and a Scudder fund account number.
Contact your bank to arrange a wire transfer to:

The Scudder Funds
State Street Bank and Trust Company
Boston, MA 02101
ABA Number 011000028
DDA Account 9903-5552

Your wire instructions must also include:

- -- the name of the fund in which the money is to be invested,
- -- the account number of the fund, and
- -- the name(s) of the account holder(s).

The account will be established once the application and money order are
received in good order.

You may also make additional investments of $100 or more to your existing
account by wire.

By exchange. Each Fund may be exchanged for shares of other funds in the Scudder
Family of Funds unless otherwise determined by a Fund's Board of Directors or
Trustees. Your new account will have the same registration and address as your
existing account.

The exchange requirements for corporations, other organizations, trusts,
fiduciaries, agents, institutional investors and retirement plans may be
different from those for regular accounts.

Please call 1-800-225-5163 for more information, including information about the
transfer of special account features.

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You can also make exchanges among your Scudder fund accounts on SAIL, the
Scudder Automated Information Line, by calling 1-800-343-2890.

By telephone order. Existing shareholders of each Fund, with the exception of
Scudder U.S. Treasury Money Fund, may purchase shares at a certain day's price
by calling 1-800-225-5163 before the close of regular trading on the New York
Stock Exchange (the "Exchange"), normally 4 p.m. eastern time, on that day.
Orders must be for $10,000 or more and cannot be for an amount greater than four
times the value of your account at the time the order is placed. A confirmation
with complete purchase information is sent shortly after your order is received.
You must include with your payment the order number given at the time the order
is placed. If payment by check or wire is not received within three business
days, the order is subject to cancellation and the shareholder will be
responsible for any loss to a Fund resulting from this cancellation. Telephone
orders are not available for shares held in Scudder IRA accounts and most other
Scudder retirement plan accounts.

By "QuickBuy." If you elected "QuickBuy" for your account, you can call
toll-free to purchase shares. The money will be automatically transferred from
your predesignated bank checking account. Your bank must be a member of the
Automated Clearing House for you to use this service. If you did not elect
"QuickBuy," call 1-800-225-5163 for more information.

To purchase additional shares, call 1-800-225-5163. Purchases may not be for
more than $250,000. Proceeds in the amount of your purchase will be transferred
from your bank checking account in two or three business days following your
call. For requests received by the close of regular trading on the Exchange,
shares will be purchased at the net asset value per share calculated at the
close of trading on the day of your call. "QuickBuy" requests received after the
close of regular trading on the Exchange will begin their processing and be
purchased at the net asset value calculated the following business day.

If you purchase shares by "QuickBuy" and redeem them within seven days of the
purchase, the Fund may hold the redemption proceeds for a period of up to seven
business days. If you purchase shares and there are insufficient funds in your
bank account, the purchase will be canceled and you will be subject to any
losses or fees incurred in the transaction. "QuickBuy" transactions are not
available for most retirement plan accounts. However, "QuickBuy" transactions
are available for Scudder IRA accounts.

Redeeming shares

Each Fund allows you to redeem shares (i.e., sell them back to the Fund) without
redemption fees. There may be a 2% fee payable to Emerging Markets Growth Fund
for redemption of shares held less than one year.

By telephone. This is the quickest and easiest way to sell Fund shares. If you
provided your banking information on your application, you can call to request
that federal funds be sent to your authorized bank account. If you did not
include your banking information on your application, call 1-800-225-5163 for
more information.

Redemption proceeds will be wired to your bank unless otherwise requested. If
your bank cannot receive federal reserve wires, redemption proceeds will be
mailed to your bank. There will be a $5 charge for all wire redemptions.

You can also make redemptions from your Scudder fund account on SAIL by calling
1-800-343-2890.

If you open an account by wire, you cannot redeem shares by telephone until the
Funds' transfer agent has received your completed and signed application.
Telephone redemption is not available for shares held in Scudder IRA accounts
and most other Scudder retirement plan accounts.

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<PAGE>

In the event that you are unable to reach a Fund by telephone, you should write
to the Fund; see "How to contact Scudder" for the address.

By "Write-A-Check." You may redeem shares in Scudder U.S. Treasury Money Fund by
writing checks against your account balance for at least $100. Your Fund
investments will continue to earn dividends until your check is presented to a
Fund for payment.

Checks will be returned by the Fund's transfer agent if there are insufficient
shares to meet the withdrawal amount. You should not attempt to close an account
by check because the exact balance at the time the check clears will not be
known when the check is written.

By "QuickSell." If you elected "QuickSell" for your account, you can call
toll-free to redeem shares. The money will be automatically transferred to your
predesignated bank checking account. Your bank must be a member of the Automated
Clearing House for you to use this service. If you did not elect "QuickSell,"
call 1-800-225-5163 for more information.

To redeem shares, call 1-800-225-5163. Redemptions must be for at least $250.
Proceeds in the amount of your redemption will be transferred to your bank
checking account in two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
redeemed at the net asset value per share calculated at the close of trading on
the day of your call. "QuickSell" requests received after the close of regular
trading on the Exchange will begin their processing and be redeemed at the net
asset value calculated the following business day.

"QuickSell" transactions are not available for Scudder IRA accounts and most
other retirement plan accounts.

Signature guarantees. For your protection and to prevent fraudulent redemptions,
on written redemption requests in excess of $100,000 we require an original
signature and an original signature guarantee for each person in whose name the
account is registered. (The Fund reserves the right, however, to require a
signature guarantee for all redemptions.) You can obtain a signature guarantee
from most banks, credit unions or savings associations, or from broker/dealers,
municipal securities broker/dealers, government securities broker/dealers,
national securities exchanges, registered securities associations or clearing
agencies deemed eligible by the Securities and Exchange Commission. Signature
guarantees by notaries public are not acceptable. Redemption requirements for
corporations, other organizations, trusts, fiduciaries, agents, institutional
investors and retirement plans may be different from those for regular accounts.
For more information, please call 1-800-225-5163.

Telephone transactions

Shareholders automatically receive the ability to exchange by telephone and the
right to redeem by telephone up to $100,000 to their address of record.
Shareholders also may, by telephone, request that redemption proceeds be sent to
a predesignated bank account. Each Fund uses procedures designed to give
reasonable assurance that telephone instructions are genuine, including
recording telephone calls, testing a caller's identity and sending written
confirmation of telephone transactions. If a Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. Each Fund will not be liable for acting upon
instructions communicated by telephone that it reasonably believes to be
genuine.

Share price

Purchases and redemptions, including exchanges, are made at net asset value. For
each Fund, with the exception of Scudder U.S. Treasury Money Fund, Scudder Fund
Accounting Corporation determines net asset value per share as of the close of
regular trading on the Exchange, normally 4 p.m. eastern time, on each day the
Exchange is open for trading.

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<PAGE>

In addition, for Scudder U.S. Treasury Money Fund, Scudder Fund Accounting
Corporation determines net asset value per share as of twelve o'clock noon, and
as of the close of regular trading on the Exchange, normally 4 p.m. eastern time
on each day the Exchange is open for trading.

Net asset value per share is calculated by dividing the value of total Fund
assets, less all liabilities, by the total number of shares outstanding. In
calculating the net asset value per share, Scudder U.S. Treasury Money Fund uses
the current market value of the securities. However, for securities with 60 days
or less to maturity, the Fund uses the amortized cost value.

Trading in securities on foreign securities exchanges is normally completed
before the close of regular trading on the Exchange. Trading on these foreign
exchanges may not take place on all days on which there is regular trading on
the Exchange, or may take place on days on which there is no regular trading on
the Exchange. If events materially affecting the value of a Fund's portfolio
securities occur between the time when these foreign exchanges close and the
time when a Fund's net asset value is calculated, such securities will be valued
at fair value as determined by each Trust's Board of Trustees or the
Corporation's Board of Directors.

Processing time

All purchase and redemption requests must be received in good order by the
Fund's transfer agent.

For each Fund, with the exception of Scudder U.S. Treasury Money Fund, those
requests received by the close of regular trading on the Exchange are executed
at the net asset value per share calculated at the close of regular trading that
day. Those requests received after the close of regular trading on the Exchange
will be executed the following business day.

For Scudder U.S. Treasury Money Fund, purchases made by wire and received by the
Fund's transfer agent before noon on any business day are executed at noon on
that day and begin earning income the same day. Those made by wire between noon
and the close of regular trading on the Exchange on any business day are
executed at the close of trading the same day and begin earning income the next
business day. Purchases made by check are executed on the day the check is
received in good order by the Fund's transfer agent and begin earning income on
the next business day. Redemption requests received in good order by the Fund's
transfer agent between noon and the close of regular trading on the Exchange are
executed at the net asset value calculated at the close of regular trading on
that day and will earn a dividend on the redeemed shares that day. If a
redemption request is received by noon, proceeds will normally be wired that
day, if requested by the shareholder, but no dividend will be earned on the
redeemed shares on that day.

Purchase and redemption requests received after the close of regular trading on
the Exchange will be executed the following business day.

If you wish to make a purchase of $500,000 or more, you should notify Scudder
Investor Relations by calling 1-800-225-5163.

Each Fund will normally send your redemption proceeds within one business day
following the redemption request, but may take up to seven business days (or
longer in the case of shares recently purchased by check).

Purchase restrictions

The Funds and Scudder Investor Services, Inc. each reserves the right to reject
purchases of Fund shares (including exchanges) for any reason including when a
pattern of frequent purchases and sales made in response to short-term
fluctuations in a Fund's share price appears evident. Purchases and sales of
each Fund, with the exception of Scudder U.S. Treasury Money Fund, should be
made for long-term investment purposes only.

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<PAGE>

Tax information

A redemption of shares, including an exchange into another Scudder fund, is a
sale of shares and may result in a gain or loss for income tax purposes.

Tax identification number

Be sure to complete the Tax Identification Number section of the application
when you open an account. Federal tax law requires a Fund to withhold 31% of
taxable dividends, capital gains distributions and redemption and exchange
proceeds from accounts (other than those of certain exempt payees) without a
correct certified Social Security or tax identification number and certain other
certified information or upon notification from the IRS or a broker that
withholding is required. Each Fund reserves the right to reject new account
applications without a correct certified Social Security or tax identification
number. Each Fund also reserves the right, following 30 days' notice, to redeem
all shares in accounts without a correct certified Social Security or tax
identification number. A shareholder may avoid involuntary redemption by
providing a Fund with a tax identification number during the 30-day notice
period.

Minimum balances

Shareholders should maintain a share balance worth at least $2,500, which amount
may be changed by the respective Boards of Directors or Trustees. Scudder
retirement plans and certain other accounts have similar or lower minimum share
balance requirements. A shareholder may open an account with at least $1,000, if
an automatic investment plan of $100/month is established.

Shareholders who maintain a non-fiduciary account balance of less than $2,500 in
the Fund, without establishing an automatic investment plan, will be assessed an
annual $10.00 per fund charge with the fee to be paid to the Fund. The $10.00
charge will not apply to shareholders with a combined household account balance
in any of the Scudder Funds of $25,000 or more. The Fund reserves the right,
following 60 days' written notice to shareholders, to redeem all shares in
accounts below $250, including accounts of new investors, where a reduction in
value has occurred due to a redemption or exchange out of the account. The Fund
will mail the proceeds of the redeemed account to the shareholder. Reductions in
value that result solely from market activity will not trigger an involuntary
redemption. Retirement accounts and certain other accounts will not be assessed
the $10.00 charge or be subject to automatic liquidation.

Please refer to "Exchanges and Redemptions-- Other Information" in the Fund's
Statement of Additional Information for more information.

Third party transactions

If purchases and redemptions of Fund shares are arranged and settlement is made
at an investor's election through a member of the National Association of
Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member may, at its discretion, charge a fee for that service.

Redemption-in-kind

Each Fund, with the exception of Scudder U.S. Treasury Money Fund, reserves the
right, if conditions exist which make cash payments undesirable, to honor any
request for distribution by making payment in whole or in part in readily
marketable securities chosen by each Fund and valued as they are for purposes of
computing each Fund's net asset value (a redemption-in-kind). If payment is made
in securities, a shareholder may incur transaction expenses in converting these
securities to cash.

Each Fund has elected, however, to be governed by Rule 18f-1 under the 1940 Act
as a result of which the Fund is obligated to redeem shares, with respect to any
one shareholder during any 90-day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of each Fund at the beginning of the
period.

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Shareholder benefits

Experienced professional management

Scudder Kemper Investments, Inc., one of the nation's most experienced
investment management firms, actively manages your Scudder fund investment.
Professional management is an important advantage for investors who do not have
the time or expertise to invest directly in individual securities.

A team approach to investing

Each Fund is managed by a team of Scudder investment professionals who each play
an important role in a Fund's management process. Team members work together to
develop investment strategies and select securities for each 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. Scudder believes its team approach benefits Fund
investors by bringing together many disciplines and leveraging Scudder's
extensive resources.

Scudder U.S. Treasury Money Fund. Lead Portfolio Manager David B. Wines assumed
responsibility for the Fund's day-to-day management in 1996. Mr. Wines focuses
on overall investment strategy and has over 14 years of experience as a
portfolio manager in the securities business, including eight years in the
mutual fund business. Debra A. Hanson, Portfolio Manager, who joined the team in
1995, develops and executes investment strategy for the Fund. Ms. Hanson joined
Scudder in 1983 and has over 14 years' experience trading and managing
fixed-income portfolios. K. Sue Cote, Portfolio Manager, joined Scudder in 1983
and has 14 years experience working with short-term fixed-income investments.

Scudder Income Fund. Stephen A. Wohler, Lead Portfolio Manager, joined the team
in 1994 and is also responsible for implementing the Fund's strategy. Mr. Wohler
has over 17 years experience managing fixed-income investments and has been with
the Adviser since 1979. Kelly D. Babson, Portfolio Manager, joined the Adviser
in 1994 as a portfolio manager and has 16 years of experience in the fixed
income field, including 13 years of high-yield management. Robert Cessine,
Portfolio Manager, joined the Adviser in January 1993, and is responsible for
the Fund's investment strategy including duration management, asset allocation,
security selection and trading.

Scudder Growth and Income Fund. Lead Portfolio Manager, Robert T. Hoffman leads
a team of investment professionals responsible for the management of the Fund
and other portfolios managed in a similar fashion. Mr. Hoffman has had
responsibility for setting the Fund's stock investing strategy and overseeing
the Fund's day-to-day operations since 1991. Mr. Hoffman, who joined the Adviser
in 1990 as a portfolio manager, has 14 years of experience in the investment
industry, including several years of pension fund management experience.

Lori Ensinger, Portfolio Manager, joined the Adviser's portfolio management team
in 1993, and the Fund in 1996. Ms. Ensinger focuses on stock selection and
investment strategy. She has worked as a portfolio manager since 1983.

Benjamin W. Thorndike, Portfolio Manager, is the Fund's chief analyst and
strategist for convertible securities. Mr. Thorndike, who has 19 years of
investment experience, joined Scudder in 1983 as a portfolio manager, and the
Fund in 1986.

Kathleen T. Millard, Portfolio Manager, has been involved in the investment
industry since 1983 and has worked as a portfolio manager since 1986. Ms.
Millard, who joined the portfolio management team and Scudder in 1991, focuses
on strategy and stock selection.

Scudder Development Fund. Lead Portfolio Manager Roy C. McKay assumed
responsibility for the Fund's day-to-day management when he joined Scudder in
1988. Mr. McKay has more than 30 years of investment experience, with over 20

39
<PAGE>

years specializing in small and medium-size company growth stocks. Peter Chin,
who has been with Scudder since 1973, joined Scudder's small company group in
1986 and became a Portfolio Manager of the Fund in 1993. Mr. Chin contributes
expertise in manufacturing, service and energy companies. Mr. Chin has 28 years
of investment experience, including ten years in small and medium-size company
growth stocks.

Scudder Global Fund. Lead Portfolio Manager William E. Holzer has had day-to-day
responsibility for Scudder Global Fund's worldwide strategy and investment
themes since its inception in 1986. Mr. Holzer, who has over 20 years'
experience in global investing, joined Scudder in 1980. Diego Espinosa,
Portfolio Manager, joined the team in 1997 and Scudder in 1996. Mr. Espinosa is
also responsible for development of the Fund's strategy and management of the
portfolio on a daily basis. Mr. Espinosa has six years of investment industry
experience. Nicholas Bratt, Portfolio Manager, directs Scudder's overall global
equity investment strategies. Mr. Bratt joined Scudder in 1976 and the team in
1993.

Scudder Emerging Markets Growth Fund. Joyce E. Cornell, Lead Portfolio Manager,
has responsibility for the Fund's day-to-day management and investment
strategies. Ms. Cornell has been a portfolio manager at Scudder since 1993, and
joined the firm in 1991 after eight years of investment experience as a research
analyst. Elizabeth Allan, Portfolio Manager, helps set the Fund's general
investment strategies. Ms. Allan joined Scudder in 1987, and has numerous years
of Pacific Basin research and investing experience. Tara C. Kenney, Portfolio
Manager, assists with the Fund's research and investment strategy by focusing on
the Latin American securities in the portfolio. Ms. Kenney joined the Adviser in
1995 and has over ten years of financial industry experience. Ms. Kenney was a
vice president of corporate finance for an investment banking firm for seven
years, and most recently, a portfolio manager for two years. Andre J. DeSimone,
Portfolio Manager, assists in investment selection. Mr. DeSimone joined the
Adviser in 1997 after three years as Chief Executive Officer of a stock
brokerage company in Kenya. Mr. DeSimone also has six years of experience in
investment banking.

SAIL(TM)--Scudder Automated Information Line

For personalized account information including fund prices, yields and account
balances, to perform transactions in existing Scudder fund accounts, or to
obtain information on any Scudder fund, shareholders can call Scudder's
Automated Information Line (SAIL) at 1-800-343-2890, 24 hours a day. During
periods of extreme economic or market changes, or other conditions, it may be
difficult for you to effect telephone transactions in your account. In such an
event you should write to the Fund; please see "How to contact Scudder" for the
address.

Investment flexibility

Scudder offers toll-free telephone exchange between funds at current net asset
value. You can move your investments among money market, income, growth,
tax-free and growth and income funds with a simple toll-free call or, if you
prefer, by sending your instructions through the mail or by fax. (The exchange
privilege may not be available for certain Scudder funds or classes thereof. For
more information, please call 1-800-225-5163.) Telephone and fax redemptions and
exchanges are subject to termination and their terms are subject to change at
any time by the Fund or the transfer agent. In some cases, the transfer agent or
Scudder Investor Services, Inc. may impose additional conditions on telephone
transactions.

Personal Counsel(SM) -- A Managed Fund Portfolio Program

If you would like to receive direct guidance and management of your overall
mutual fund portfolio to help you pursue your investment goals, you may be

40
<PAGE>

interested in Personal Counsel from Scudder. Personal Counsel, a program of
Scudder Investor Services, Inc., a registered investment adviser and a
subsidiary of Scudder Kemper Investments, Inc., combines the benefits of a
customized portfolio of no-load mutual funds with ongoing portfolio monitoring
and individualized service, for an annual fee of generally 1.25% or less of
assets. In addition, it draws upon the Adviser's more than 75-year heritage of
providing investment counsel to large corporate and private clients. If you have
$100,000 or more to invest initially and would like more information about
Personal Counsel, please call 1-800-700-0183.

Dividend reinvestment plan

You may have dividends and distributions automatically reinvested in additional
Fund shares. Please call 1-800-225-5163 to request this feature.

Shareholder statements

You will receive a detailed statement summarizing account activity, including
dividend and capital gain reinvestment, purchases and redemptions. All of your
statements should be retained to help you keep track of account activity and the
cost of shares for tax purposes.

Shareholder reports

In addition to account statements, you receive periodic shareholder reports
highlighting relevant information, including investment results and a review of
portfolio changes.

To reduce the volume of mail you receive, only one copy of most Fund reports,
such as the Fund's Annual Report, may be mailed to your household (same surname,
same address). Please call 1-800-225-5163 if you wish to receive additional
shareholder reports.

Newsletters

Four times a year, Scudder sends you Perspectives, an informative newsletter
covering economic and investment developments, service enhancements and other
topics of interest to Scudder fund investors.

Scudder Investor Centers

As a convenience to shareholders who like to conduct business in person, Scudder
Investor Services, Inc. maintains Investor Centers in Boca Raton, Boston,
Chicago, New York and San Francisco.

T.D.D. service for the hearing impaired

Scudder's full range of investor information and shareholder services is
available to hearing impaired investors through a toll-free T.D.D. (Telephone
Device for the Deaf) service. If you have access to a T.D.D., call
1-800-543-7916 for investment information or specific account questions and
transactions.

41
<PAGE>

Purchases
- --------------------------------------------------------------------------------
Opening Minimum initial investment: $2,500; IRAs $1,000
an account Group retirement plans (401(k), 403(b), etc.) have similar or
lower minimums. See appropriate plan literature.

Make checks o By Mail Send your completed and signed application and
payable to check
"The Scudder
Funds." by regular mail to: or by express, registered,
or certified mail to:

The Scudder Funds The Scudder Funds
P.O. Box 2291 66 Brooks Drive
Boston, MA Braintree, MA 02184
02107-2291

o By Wire Please see Transaction information--Purchasing
shares--By wire for details, including the ABA
wire transfer number. Then call 1-800-225-5163
for instructions.

o In Person Visit one of our Investor Centers to
complete your application with the help of a
Scudder representative. Investor Center locations
are listed under Shareholder benefits.
- -------------------------------------------------------------------------- -----
Purchasing Minimum additional investment: $100; IRAs $50
additional Group retirement plans (401(k), 403(b), etc.) have similar or
shares lower minimums. See appropriate plan literature.

Make checks o By Mail Send a check with a Scudder investment slip, or
payable to with a letter of instruction including your account
"The Scudder number and the complete Fund name, to the
Funds." appropriate address listed above.

o By Wire Please see Transaction information--Purchasing
shares--By wire for details, including the ABA
wire transfer number.

o In Person Visit one of our Investor Centers to make an
additional investment in your Scudder fund account.
Investor Center locations are listed under
Shareholder benefits.

o By Telephone Please see Transaction information--Purchasing
shares--By QuickBuy or By telephone order for
more details.

o By Automatic You may arrange to make investments on a regular
Investment basis through automatic deductions from
Plan ($50 your bank checking account. Please call
minimum) 1-800-225-5163 for more information and an
enrollment form.
- --------------------------------------------------------------------------------

42
<PAGE>
<TABLE>
<CAPTION>
Exchanges and redemptions
- --------------------------------------------------------------------------------
<S> <C> <C>
Exchanging shares Minimum investments: $2,500 to establish a new account;
$100 to exchange among existing accounts

o By Telephone To speak with a service representative, call 1-800-225-5163 from
8 a.m. to 8 p.m. eastern time or to access SAIL(TM), Scudder's Automated
Information Line, call 1-800-343-2890 (24 hours a day).

There may be a o By Mail Print or type your instructions and include:
2% fee payable or Fax - the name of the Fund and the account number you are exchanging from;
to Emerging - your name(s) and address as they appear on your account;
Markets Growth - the dollar amount or number of shares you wish to exchange;
Fund for - the name of the Fund you are exchanging into;
redemption of - your signature(s) as it appears on your account; and
shares held less - a daytime telephone number.
than one year. Send your instructions
by regular mail to: or by express, registered, or by fax to:
or certified mail to:

The Scudder Funds The Scudder Funds 1-800-821-6234
P.O. Box 2291 66 Brooks Drive
Boston, MA 02107-2291 Braintree, MA 02184
-----------------------------------------------------------------------------------------------------------------------
Redeeming shares o By Telephone To speak with a service representative, call 1-800-225-5163 from 8 a.m.
to 8 p.m. eastern time or to access SAIL(TM),Scudder's Automated Information
Line, call 1-800-343-2890 (24 hours a day). You may have redemption proceeds
sent to your predesignated bank account, or redemption proceeds of up to
$100,000 sent to your address of record.

There may be a o By "Write- You may redeem shares in Scudder U.S. Treasury Money Fund by writing checks
2% fee payable A-Check" against your account balance as often as you like for at least $100, but not
to Emerging more than $5,000,000.
Markets Growth
Fund for
redemption of o By Mail Send your instructions for redemption to the appropriate address or fax
shares held less or Fax number above and include:
than one year.
- the name of the Fund and the account number you are exchanging from;
- your name(s) and address as they appear on your account;
- the dollar amount or number of shares you wish to exchange;
- the name of the Fund you are exchanging into;
- your signature(s) as it appears on your account; and
- a daytime telephone number.

A signature guarantee is required for redemptions over $100,000.
See Transaction information--Redeeming shares.

o By Automatic You may arrange to receive automatic cash payments periodically. Call
Withdrawal 1-800-225-5163 for more information and an enrollment form.
Plan
- --------------------------------------------------------------------------------
</TABLE>

43
<PAGE>

Scudder tax-advantaged retirement plans

Scudder offers a variety of tax-advantaged retirement plans for individuals,
businesses and non-profit organizations. These flexible plans are designed for
use with the Scudder Family of Funds (except Scudder tax-free funds, which are
inappropriate for such plans). Scudder Funds offer a broad range of investment
objectives and can be used to seek almost any investment goal. Using Scudder's
retirement plans can help shareholders save on current taxes while building
their retirement savings.

o Scudder No-Fee IRAs. These retirement plans allow a maximum annual
contribution of up to $2,000 per person for anyone with earned income (up to
$2,000 per individual for married couples filing jointly, even if only one
spouse has earned income). Many people can deduct all or part of their
contributions from their taxable income, and all investment earnings accrue on
a tax-deferred basis. The Scudder No-Fee IRA charges you no annual custodial
fee.

o Scudder Roth No-Fee IRAs. Similar to the traditional IRA in many respects,
these retirement plans provide a unique opportunity for qualifying individuals
to accumulate investment earnings tax free. Unlike a traditional IRA, with a
Roth IRA, if you meet the distribution requirements, you can withdraw your
money without paying any taxes on the earnings. No tax deduction is allowed
for contributions to a Roth IRA. The Scudder Roth IRA charges you no annual
custodial fee.

o 401(k) Plans. 401(k) plans allow employers and employees to make
tax-deductible retirement contributions. Scudder offers a full service program
that includes recordkeeping, prototype plan, employee communications and
trustee services, as well as investment options.

o Profit Sharing and Money Purchase Pension Plans. These plans allow
corporations, partnerships and people who are self-employed to make annual,
tax-deductible contributions of up to $30,000 for each person covered by the
plans. Plans may be adopted individually or paired to maximize contributions.
These are sometimes known as Keogh plans.

o 403(b) Plans. Retirement plans for tax-exempt organizations and school systems
to which employers and employees may both contribute.

o SEP-IRAs. Easily administered retirement plans for small businesses and
self-employed individuals. The maximum annual contribution to SEP-IRA accounts
is adjusted each year for inflation. The Scudder SEP-IRA charges you no annual
custodial fee.

o Scudder Horizon Plan. A no-load variable annuity that lets you build assets by
deferring taxes on your investment earnings. You can start with $2,500 or
more.

Scudder Trust Company (an affiliate of the Adviser) is Trustee or Custodian for
some of these plans and is paid an annual fee for some of the above retirement
plans. For information about establishing a Scudder No-Fee IRA, SEP-IRA, Profit
Sharing Plan, Money Purchase Pension Plan or a Scudder Horizon Plan, please call
1-800-225-2470. For information about 401(k)s or 403(b)s please call
1-800-323-6105. To effect transactions in existing IRA, SEP-IRA and most Profit
Sharing or Pension Plan accounts, call 1-800-225-5163.

The variable annuity contract is provided by Charter National Life Insurance
Company (in New York State, Intramerica Life Insurance Company [S 1802]). The
contract is offered by Scudder Insurance Agency, Inc. (in New York State, Nevada
and Montana, Scudder Insurance Agency of New York, Inc.). CNL, Inc. is the
Principal Underwriter. Scudder Horizon Plan is not available in all states.

Scudder Investor Relations is a service provided through Scudder Investor
Services, Inc., Distributor.

44
<PAGE>
Investment products and services

The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series--
Premium Shares*
Managed Shares*
Scudder Government Money Market Series--
Managed Shares*

Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**

Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**

U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund

Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund

Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio

U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund

U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund

Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund

Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund***
Scudder Emerging Markets Growth Fund
Scudder Gold Fund

Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.

Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund

Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP-IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan **+++ +++
(a variable annuity)

Education Accounts
- ------------------
Education IRA
UGMA/UTMA

Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.

For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds 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. +++ +++A no-load variable
annuity contract provided by Charter National Life Insurance Company and its
affiliate, offered by Scudder's insurance agencies, 1-800-225-2470. #These
funds, advised by Scudder Kemper Investments, Inc., are traded on the New York
Stock Exchange and, in some cases, on various foreign stock exchanges.

45
<PAGE>

How to contact Scudder

Account Service and Information:
<S> <C>

For existing account service and transactions
Scudder Investor Relations -- 1-800-225-5163

For 24 hour account information, fund information, exchanges, and an
overview of all the services available to you

Scudder Electronic Account Services -- http://funds.scudder.com

For personalized information about your Scudder accounts, exchanges and redemptions

Scudder Automated Information Line (SAIL) -- 1-800-343-2890

Investment Information:

For information about the Scudder funds, including additional
applications and prospectuses, or for answers to investment questions

Scudder Investor Relations -- 1-800-225-2470
[email protected]

Scudder's World Wide Web Site -- http://funds.scudder.com

For establishing 401(k) and 403(b) plans

Scudder Defined Contribution Services -- 1-800-323-6105

Scudder Brokerage Services:

To receive information about this discount brokerage service and to obtain an application

Scudder Brokerage Services* -- 1-800-700-0820

Personal Counsel(SM) -- A Managed Fund Portfolio Program:

To receive information about this mutual fund portfolio guidance and management program

Personal Counsel from Scudder -- 1-800-700-0183

Please address all correspondence to:

The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291

Or Stop by a Scudder Investor Center:

Many shareholders enjoy the personal, one-on-one service of the Scudder
Investor Centers. Check for an Investor Center near you--they can be
found in the following cities:

Boca Raton Chicago San Francisco
Boston New York

Scudder Investor Relations and Scudder Investor Centers are services provided
through Scudder Investor Services, Inc., Distributor.
</TABLE>
* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA
02061--Member NASD/SIPC.