Scudder
U.S. Treasury
Money Fund
Semiannual Report
December 31, 1998
Pure No-Load(TM) Funds
A money market fund investing in short-term U.S. government securities and
repurchase agreements. For investors seeking current income plus safety,
liquidity and stability of capital.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
Scudder U.S. Treasury Money Fund
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Date of Inception: 11/23/81 Total Net Assets as of Ticker Symbol: SCGXX
12/31/98: $418.5 million
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o Scudder U.S. Treasury Money Fund provided total returns of 2.33% for the
six-month period and 4.78% for the 12 months ended December 31.
o The Fund's 30-day net annualized yield was 4.22% as of December 31, 1998.
o Repurchase agreements were the Fund's number one holding during the period;
these instruments provided more attractive value than Treasury Bills, which we
felt were overpriced following a general "flight to safety" by investors.
Table of Contents
3 Letter from the Fund's President 12 Notes to Financial Statements
4 Portfolio Management Discussion 14 Shareholder Meeting Results
6 Glossary of Investment Terms 16 Officers and Trustees
7 Investment Portfolio 17 Investment Products and Services
8 Financial Statements 18 Scudder Solutions
11 Financial Highlights
2 - Scudder U.S. Treasury Money Fund
<PAGE>
Letter from the Fund's President
Dear Shareholders,
The U.S. economy and financial markets displayed remarkable resiliency amid
1998's stormy global financial environment. Prices of U.S. equities as measured
by the Dow Jones Industrial Average and the S&P 500 Index rose 18.13% and
28.58%, respectively, during the year just passed, although the path upward was
a bumpy one. Treasury bond prices also rose as investors sought a safe haven,
and their yields declined to a 30-year low.
Scudder U.S. Treasury Money Fund offered investors an additional refuge
during 1998's volatile times, which witnessed a Russian currency devaluation,
more economic troubles for Asia and South America, the near collapse of the Long
Term Capital Management hedge fund, and gyrating U.S. financial markets. Through
its investments in short-maturity, high-quality instruments, the Fund strives to
maintain a competitive yield and a stable $1.00 share price, no matter what the
market conditions. On December 31, 1998, Scudder U.S. Treasury Money Fund
offered investors a 30-day net annualized yield of 4.22%. For the six-month and
12-month periods ended December 31, the Fund provided total returns of 2.33% and
4.78%, respectively. Please read the Portfolio Management Discussion beginning
on page 4 for additional information concerning your Fund's investment
environment, strategy, and outlook.
For those of you who are interested in new Scudder products, we recently
introduced the Scudder Tax Managed Growth Fund, investing in medium- to
large-sized U.S. companies, and Scudder Tax Managed Small Company Fund, which
invests in stocks of small U.S. companies. Using a combination of quantitative
and fundamental research, the funds will focus on companies with strong earnings
growth, reasonable valuations, and favorable risk profiles. Both funds strive to
maximize after-tax returns by systematically taking into account the tax
implications of portfolio transactions and seeking to offset capital gains by
realizing losses when appropriate. Please see pages 17 through 19 for more
information on Scudder products and services.
As always, please call a Scudder Investor Information representative at
1-800-225-2470 if you have questions about your Fund, or visit our Web site at
www.scudder.com. Thank you for choosing Scudder U.S. Treasury Money Fund to help
meet your investment needs.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder U.S. Treasury Money Fund
3 - Scudder U.S. Treasury Money Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Amid outbreaks of turbulence in financial markets around the world, Scudder U.S.
Treasury Money Fund provided shareholders with a stable $1.00 share price and a
competitive yield during the Fund's most recent semiannual period ended December
31, 1998. The Fund's 30-day net annualized yield was 4.22% as of December 31.
For the six- and 12-month periods ended December 31, 1998, the Fund provided
total returns of 2.33% and 4.78%, respectively, roughly equivalent to the 2.26%
and 4.69% returns of similar money market funds during the same periods as
tracked by Lipper Analytical Services, Inc.
In Search of a Safe Haven
In the summer and fall of 1998, many investors sought safe havens in the form of
U.S. Treasury bonds and money market funds as a series of dramatic financial
crises rocked the global markets. In the international capital markets, the most
troublesome developments were Russia's short-term debt default and ruble
devaluation, Japan's continuing banking crisis and recession, the run on
Brazil's currency reserves (despite an IMF stabilization package), and the near
collapse of the Long Term Capital Management hedge fund. The Federal Reserve
lowered short-term interest rates by one quarter of a percentage point on
September 29, October 15, and November 17 -- taking the unexpected step of
adjusting interest rates between Federal Open Market Committee meetings -- in an
attempt to restore order to financial markets. Though the Fed had reportedly
changed to a "neutral" stance on interest rate adjustments by late in 1998, the
more than 60 interest rate reductions by central banks around the world during
this period seemed to ease fears of rampant deflation and gave encouragement to
U. S. equity investors.
Windows of Opportunity
During most of the six-month period ended December 31, we refrained from
extending the Fund's average maturity significantly because we felt that money
market yields at the longer end of our acceptable maturity range did not offer
attractive value. Yields of longer-maturity money market securities were
disproportionately low during summer and early fall as the market awaited what
turned out to be three Fed easings. Toward the end of the year, however, we were
able to take advantage of several opportunities to lengthen maturity arising
from seasonal market turnover. The Fund's average maturity stood at 23 days as
of December 31, 1998, versus 31 days as of June 30, 1998.
Over the period, the Fund maintained investments in a diversified mix of U.S.
government securities, including repurchase agreements backed by U.S. Treasury
obligations, and securities issued or guaranteed by the U.S. Treasury.
Repurchase agreements represented 59% of the Fund's portfolio as of December 31;
we felt these instruments provided the most attractive yields based on their
maturities. In addition, we kept the Fund's allocation of Treasury Bills to a
minimum because we believed these securities were somewhat overpriced following
a general "flight to safety" by investors.
4 - Scudder U.S. Treasury Money Fund
<PAGE>
Economic Slowdown in 1999?
Shrinking corporate profit margins, a widening trade deficit, pressure on the
dollar, and troubles in the emerging markets could dampen U.S. economic growth
during the coming months. We do not doubt, however, the power of consumer and
investor confidence to overcome adversity, as has been shown throughout the
current economic expansion.
With the Federal Reserve "on hold" at present, we will pursue a cautious
strategy, and will lengthen the Fund's average maturity only when we believe the
Fund is adequately compensated for taking on additional risk. In addition, the
Fund will carefully select among the range of maturities it can invest in,
choosing high-quality, short-term securities that we feel represent the best
value.
We will continue to collect and analyze economic data and carefully monitor the
investment climate as we position the Fund for high current income, plus safety,
liquidity, and stability of capital.
Sincerely,
Your Portfolio Management Team
/s/Frank J. Rachwalski, Jr. /s/Mitchell W. Wilner
Frank J. Rachwalski, Jr. Mitchell W. Wilner
5 - Scudder U.S. Treasury Money Fund
<PAGE>
Glossary of Investment Terms
GROSS DOMESTIC PRODUCT Gross domestic product is a commonly referenced
measure of the health of the U.S. economy,
and refers to the market value of the goods and
services produced by labor and property in the United
States. Overly strong economic growth can lead to
accelerating inflation; weak growth can lead to a
recession.
LIQUIDITY A characteristic of an investment or an asset
referring to the ease of convertibility into cash
within a reasonably short period of time.
MATURITY Reaching the date at which a debt instrument is due
and payable. A bond due to mature on January 1, 2010
will return the bondholder's principal and final
interest payment on that date.
MONEY MARKET Market for short-term debt instruments,
including banker's acceptances, commercial paper,
negotiable certificates of deposit, repurchase
agreements, and Treasury bills. All of these
instruments have a high level of safety and
liquidity.
REPURCHASE AGREEMENT Agreement between a seller and a buyer, usually of
("REPO") U.S. Government securities, whereby the seller
agrees to repurchase the securities at an
agreed-upon price and, usually, at a stated time.
TOTAL RETURN The most common yardstick to measure the
performance of a fund. Total return -- annualized or
compound -- is based on a combination of share price
changes plus income and capital gain distributions,
if any, expressed as a percentage gain or loss in
value.
TREASURIES Negotiable debt obligations of the U.S. government,
secured by its full faith and credit and issued at
various schedules and maturities. These include
Treasury bills, notes, and bonds. The income from
Treasury securities is exempt from state and local,
but not federal, taxes.
YIELD The dividends or interest paid on a security,
expressed as a percentage of the security's current
price.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of
Finance and Investment Terms)
6 - Scudder U.S. Treasury Money Fund
<PAGE>
Investment Portfolio as of December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
==============================================================================================================================
<S> <C> <C>
Repurchase Agreements 58.9%
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Repurchase Agreement with J.P. Morgan & Co. dated 12/31/1998 at 4.75%, to be
repurchased at $50,026,389 on 1/4/1999, collateralized by a $37,329,000 U.S. Treasury Note,
8.125%, 8/15/2019 ........................................................................... 50,000,000 50,000,000
Repurchase Agreement with Merrill Lynch dated 12/31/1998 at 4.70%, to be
repurchased at $30,015,667 on 1/4/1999, collateralized by a $29,320,000 U.S. Treasury Note,
6.0%, 8/15/2000 ............................................................................. 30,000,000 30,000,000
Repurchase Agreement with Morgan Stanley dated 11/5/1998 at 4.83%, to be
repurchased at $30,245,525 on 1/5/1999, collateralized by a $21,680,000 U.S. Treasury Note,
8.875%, 8/15/2017 ........................................................................... 30,000,000 30,000,000
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 12/31/1998 at 5.0%, to be
repurchased at $60,033,333 on 1/4/1999, collateralized by a $41,574,000 U.S. Treasury Note,
8.75%, 8/15/2020 ............................................................................ 60,000,000 60,000,000
Repurchase Agreement with State Street Bank dated 12/31/1998 at 4.85%, to be
repurchased at $67,901,572 on 1/4/1999, collateralized by a $66,010,000 U.S. Treasury Note,
5.50%, 2/28/2003 ............................................................................ 67,865,000 67,865,000
Repurchase Agreement with Salomon Smith Barney dated 11/4/1998 at 4.83%, to be
repurchased at $10,120,750 on 2/2/1999, collateralized by a $10,000,000 U.S. Treasury Note,
5.50%, 4/15/2000 ............................................................................ 10,000,000 10,000,000
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Total Repurchase Agreements (Cost $247,865,000) 247,865,000
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U.S. Treasury Obligations 22.4%
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U.S. Treasury Bill, 4.7%*, 1/21/1999 .......................................................... 49,000,000 48,877,868
U.S. Treasury Note, 6%, 10/15/1999 ............................................................ 20,000,000 20,200,000
U.S. Treasury Note, 8.875%, 2/15/1999 ......................................................... 25,000,000 25,120,842
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Total U. S. Treasury Obligations (Cost $94,163,686) 94,198,710
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U.S. Government Backed Securities 18.7%
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Overseas Private Invest Corp.*:
4.95%, 4/2/2007 ............................................................................. 68,500,000 68,500,000
5.1%, 4/2/2007 .............................................................................. 10,000,000 10,000,000
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Total U.S. Government Backed Securities (Cost $78,500,000) 78,500,000
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Total Investment Portfolio -- 100.0% (Cost $420,528,686) (a) 420,563,710
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</TABLE>
(a) The cost for federal income tax purposes was $420,528,686. At December 31,
1998, net unrealized appreciation for all securities based on tax cost was
$35,024. This consisted of aggregate gross unrealized appreciation for all
securities in which there was an excess of market value over tax cost of
$35,024.
* Floating rate notes are securities whose yields vary with a designated
market index or market rate, such as the coupon-equivalent of the Treasury
bill rate. These securities are shown at their rate as of December 31,
1998.
The accompanying notes are an integral part of the financial statements.
7 - Scudder U.S. Treasury Money Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of December 31, 1998 (Unaudited)
<TABLE>
<S> <C>
Assets
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Investments, at market (including repurchase agreements of
$247,865,000) (identified cost $420,528,686) ......................... $ 420,563,710
Cash .................................................................... 356,584
Receivable on Fund shares sold .......................................... 4,428,932
Interest receivable ..................................................... 2,301,708
Other assets ............................................................ 5,342
----------------
Total assets ............................................................ 427,656,276
Liabilities
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Payable for Fund shares redeemed ........................................ 8,858,856
Dividends payable ....................................................... 63,079
Other payables and accrued expenses ..................................... 217,001
----------------
Total liabilities ....................................................... 9,138,936
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Net assets, at market $ 418,517,340
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Net Assets
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Net assets consist of:
Net unrealized appreciation (depreciation) on investments ............... 35,024
Paid-in capital ......................................................... 418,482,316
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Net assets, at market $ 418,517,340
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Net Asset Value
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Net Asset Value, offering and redemption price per share
($418,517,340 / 418,480,384 outstanding shares of beneficial ----------------
interest, $.01 par value, unlimited number of shares authorized) ..... $1.00
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 - Scudder U.S. Treasury Money Fund
<PAGE>
Statement of Operations
six months ended December 31, 1998 (Unaudited)
<TABLE>
<S> <C>
Investment Income
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Income:
Interest ................................................................ $ 10,738,071
----------------
Expenses:
Management fee .......................................................... 1,030,639
Services to shareholders ................................................ 969,287
Custodian and accounting fees ........................................... 45,251
Trustees' fees and expenses ............................................. 14,971
Reports to shareholders ................................................. 51,149
Registration fees ....................................................... 49,637
Auditing ................................................................ 16,219
Legal ................................................................... 9,195
Other ................................................................... 14,980
----------------
Total expenses before reductions ........................................ 2,201,328
Expense reductions ...................................................... (861,497)
----------------
Expenses, net ........................................................... 1,339,831
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Net investment income 9,398,240
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Realized and unrealized gain (loss) on investment transactions
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Net realized gain (loss) on investments during the period ............... 15,331
Net unrealized appreciation (depreciation) on investments during the
period .................................................................. 23,254
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Net gain (loss) on investments 38,585
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Net increase (decrease) in net assets resulting from operations $ 9,436,825
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder U.S. Treasury Money Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
December 31, Year Ended
1998 June 30,
Increase (Decrease) in Net Assets (Unaudited) 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................. $ 9,398,240 $ 18,831,772
Net realized gain (loss) from investments .............. 15,331 15,357
Net unrealized appreciation (depreciation) on
investments during the period ....................... 23,254 (15,067)
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations .......................................... 9,436,825 18,832,062
---------------- ----------------
Distributions to shareholders:
From net investment income ............................. (9,398,240) (18,831,772)
---------------- ----------------
From net realized gains from investment transactions ... (15,331) (15,357)
---------------- ----------------
Fund share transactions at net asset value of
$1.00 per share:
Shares sold ............................................ 430,782,248 865,115,721
Net asset value of shares issued to shareholders in
reinvestment of distributions ....................... 8,886,784 17,248,372
Shares redeemed ........................................ (409,703,149) (892,417,877)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ........................................ 29,965,883 (10,053,784)
---------------- ----------------
Increase (decrease) in net assets ...................... 29,989,137 (10,068,851)
Net assets at beginning of period ...................... 388,528,203 398,597,054
---------------- ----------------
Net assets at end of period ............................ $ 418,517,340 $ 388,528,203
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder U.S. Treasury Money Fund
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
Six Months
Ended
December 31,
1998 Years Ended June 30,
(Unaudited) 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------
Net asset value, beginning of period ........... $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------------------------------------------------------------------------
Net investment income .......................... .023 .047 .045 .048 .046 .027
Less distributions from net investment income
and net realized gains on investment
transactions (a) ............................. (.023) (.047) (.045) (.048) (.046) (.027)
---------------------------------------------------------------------------
Net asset value, end of period ................. $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) (b) ........................... 2.33** 4.83 4.58 4.91 4.70 2.74
Ratios and Supplemental Data
Net assets, end of period ($ millions) ......... 419 389 399 396 383 383
Ratio of operating expenses, net to average
daily net assets (%) ......................... .65* .65 .65 .65 .65 .65
Ratio of operating expenses before expense
reductions, to average daily net assets (%) .. 1.07* 1.00 .94 .92 .90 .90
Ratio of net investment income to average
daily net assets (%) ......................... 4.56* 4.72 4.49 4.80 4.61 2.75
</TABLE>
(a) Net realized capital gains were less than 6/10 of 1(cent) per share.
(b) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
The accompanying notes are an integral part of the financial statements.
11 - Scudder U.S. Treasury Money Fund
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder U.S. Treasury Money Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Money market instruments purchased with original maturities
of sixty days or less are valued by the amortized cost method permitted in
accordance with Rule 2a-7 under the Investment Company Act of 1940, as amended.
Debt securities for which market quotations are readily available and which have
original maturities of sixty-one days or more from the date of valuation are
valued by pricing agents approved by officers of the Fund, whose quotations
reflect broker/dealer-supplied valuations and electronic data processing
techniques. If the pricing agents are unable to provide such quotations, the
most recent bid quotation supplied by a bona fide market maker shall be used.
Other securities are appraised at fair value as determined in good faith by or
on behalf of the Valuation Committee of the Board of Trustees. Repurchase
agreements are valued at cost which, when combined with accrued interest
receivable, approximates market.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value is equal to at least the repurchase price.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code of 1986, as amended, which are applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. The Fund accordingly paid no federal income taxes and no provision
for federal income taxes was required.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a dividend to shareholders of record as of twelve o'clock noon on
each business day and is paid to shareholders monthly. During any particular
year, net realized gains from investment transactions, in excess of available
capital loss carryforwards, would be taxable to the Fund if not distributed and,
therefore, will be distributed to shareholders. An additional distribution may
be made to the extent necessary to avoid the payment of a four percent federal
excise tax.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
Other. Investment security transactions are accounted for on a trade-date basis
(which in most instances, is the same as the settlement date). Interest income
is accrued pro rata to maturity. All premiums and discounts are
amortized/accreted for both tax and financial reporting purposes.
12 - Scudder U.S. Treasury Money Fund
<PAGE>
B. Related Parties
Under the Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"), the Fund agrees to pay
the Adviser a fee equal to an annual rate of 0.50% of its average daily net
assets computed and accrued daily and payable monthly. As manager of the assets
of the Fund, the Adviser directs the investments of the Fund in accordance with
its investment objectives, policies, and restrictions. The Adviser determines
the securities, instruments, and other contracts relating to investments to be
purchased, sold or entered into by the Fund. In addition to portfolio management
services, the Adviser provides certain administrative services in accordance
with the Agreement. The Adviser has agreed not to impose all or a portion of its
management fee until March 31, 1999, and during such period to maintain the
annualized expenses of the Fund at not more than 0.65% of average daily net
assets. Accordingly, for the six months ended December 31, 1998, the Adviser did
not impose a portion of its fee amounting to $877,397, and the portion imposed
amounted to $153,242.
On September 7, 1998, Zurich Insurance Company ("Zurich"), majority owner of the
Adviser, entered into an agreement with B.A.T Industries p.l.c. ("B.A.T")
pursuant to which the financial services businesses of B.A.T were combined with
Zurich's businesses to form a new global insurance and financial services
company known as Zurich Financial Services. Upon consummation of the
transaction, the Fund's investment management agreement with Scudder Kemper was
deemed to have been assigned and, therefore, terminated. In December 1998, the
Board of Trustees and the shareholders of the Fund approved a new investment
management agreement with Scudder Kemper, which is substantially identical to
the former investment management agreement, except for the dates of execution
and termination.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
six months ended December 31, 1998, the amount charged to the Fund by SSC
aggregated $389,774, of which $63,185 is unpaid at December 31, 1998.
Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the six months ended December
31, 1998, the amount charged to the Fund by STC aggregated $492,178, of which
$88,378 is unpaid at December 31, 1998.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended December 31, 1998, the amount charged to the Fund by SFAC aggregated
$27,819, of which $4,787 is unpaid at December 31, 1998.
The Fund pays each Trustee not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the six
months ended December 31, 1998, Trustees' fees and expenses aggregated $14,971.
C. Lines of Credit
The Fund and several Scudder Funds ("The Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. The Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement.
13 - Scudder U.S. Treasury Money Fund
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder U.S. Treasury Money
Fund (the "Fund") was held on December 15, 1998, at the office of Scudder Kemper
Investments, Inc., Two International Place, Boston, Massachusetts 02110. At the
Meeting the following matters were voted upon by the shareholders (the resulting
votes for each matter are presented below).
1. To approve a new Investment Management Agreement for the Fund with Scudder
Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
202,026,428 8,796,679 13,267,107 0
2. To approve the revision of the Fund's fundamental lending policy.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
189,495,468 17,095,012 17,224,595 275,139
- --------------------------------------------------------------------------------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
14 - Scudder U.S. Treasury Money Fund
<PAGE>
This Page
intentionally
left blank.
15 - Scudder U.S. Treasury Money Fund
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General
Manager, WGBH Educational
Foundation
Dawn-Marie Driscoll
Trustee; President, Driscoll
Associates; Executive Fellow,
Center for Business Ethics,
Bentley College
Peter B. Freeman
Trustee; Corporate Director
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration, Northeastern
University
Kathryn L. Quirk*
Trustee, Vice President and
Assistant Secretary
Jean C. Tempel
Trustee; Managing Partner,
Technology Equity Partners
Thomas W. Joseph*
Vice President
Ann M. McCreary*
Vice President
Frank J. Rachwalski, Jr.*
Vice President
David B. Wines*
Vice President
Thomas F. McDonough*
Vice President and Secretary
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
16 - Scudder U.S. Treasury Money Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series--
Prime Reserve Shares*
Premium Shares*
Managed Shares*
Scudder Government Money Market Series--
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder Corporate Bond Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Equity
- -------------
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth Fund
Scudder Global Discovery Fund***
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Preferred Series
- ----------------
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. ***Only the Scudder Shares of the Fund are part
of the Scudder Family of Funds. ++Only the International Shares of the Fund are
part of the Scudder Family of Funds. +++ +++A no-load variable annuity contract
provided by Charter National Life Insurance Company and its affiliate, offered
by Scudder's insurance agencies, 1-800-225-2470. #These funds, advised by
Scudder Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various other stock exchanges.
17 - Scudder U.S. Treasury Money Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.*
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
* Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you previously designated.
Distributions Direct
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
18 - Scudder U.S. Treasury Money Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 8,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
800 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
</TABLE>
19 - Scudder U.S. Treasury Money Fund
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $230 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Group. As a result, Zurich's subsidiary, Zurich Kemper Investments,
Inc., with 50 years of mutual fund and investment management experience, was
combined with Scudder. Headquartered in New York, Scudder Kemper Investments
offers a full range of investment counsel and asset management capabilities,
based on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and perspective,
the firm seeks opportunities in markets throughout the world to meet the needs
of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Group. The Zurich Group is an internationally recognized leader in
financial services, including property/casualty and life insurance, reinsurance,
and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
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