[Image] The Japan Fund Profile [Image]
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The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
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Fund Profile
November 12, 1996
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1. What Is The Fund's Objective?
The Japan Fund pursues long-term capital appreciation by investing
primarily in the equity securities of Japanese companies.
2. What Does The Fund Invest In?
The Fund invests primarily in equity securities of Japanese companies,
which include common and preferred stock, debt securities convertible
into common stock and common stock purchase warrants. Under normal
conditions, the Fund will invest at least 80% of its assets in
Japanese securities, that is, securities issued by entities that are
organized under the laws of Japan, of securities of affiliates of
Japanese companies, wherever organized or traded, and securities of
issuers not organized under the laws of Japan but deriving more of
their revenues from Japan. These securities may include Japanese
government debt securities and debt securities of Japanese companies.
The debt securities in which the Fund invests are rated no lower than
BBB by Standard & Poor's or Baa by Moody's Investors Service, Inc.,
or, if unrated, their equivalent, as determined by the Fund's
investment adviser, Scudder, Stevens & Clark, Inc.
The Fund currently intends to focus its investments in select Japanese
companies that have an active market for their shares and that show a
potential for greater-than-average growth. These companies may be
situated in the post-industrial sectors of the economy, sensitive to
consumer demand, technology-driven, and globally competitive,
including companies that are sharing in the rapid growth of Japan's
Asia-Pacific neighbors.
The Fund may also invest up to 30% of its net assets in equity
securities of Japanese companies which are traded in an
over-the-counter market. These are generally securities of relatively
small or little-known companies that the Adviser believes have
above-average earnings growth potential.
3. What Are The Risks Of Investing In The Fund?
The Fund is susceptible to a relatively turbulent political
environment which affects issuers located in Japan and the surrounding
Pacific Basin region. There are also certain economic factors inherent
in investment in Japan such as large trade surpluses; a decline in the
value of the yen, which would adversely affect the value of the Fund
in dollar terms; and the volatility of the Japanese stock market.
Investments in foreign securities also involve special considerations
due to more 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 income from debt
securities. Further, it may be more difficult for the Fund's agents to
keep currently informed about corporate actions which may affect the
prices of portfolio securities. Purchases of foreign securities are
usually made in foreign currencies and, as a result, the Fund may
incur currency conversion costs and may be affected favorably or
unfavorably by changes in the value of foreign currencies against the
U.S. dollar.
The securities of smaller companies held by the Fund subject it to
greater risk due to the greater business risks of small size,
including limited product lines, distribution channels and financial
and managerial resources. Further, there is typically less publicly
available information concerning smaller companies.
Movements of the Japanese stock market will affect the Fund's share
price, which is likely to vary from day to day. You incur principal
risk when you invest, because your shares, when sold, may be worth
more or less than what you paid for them.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking long-term
capital growth and
o plan to hold your investment for several years,
o can tolerate fluctuations in share price,
o have or plan to have other investments for the benefit of
diversification, and
o understand the risks of investing in Japanese securities.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to The Japan Fund, Inc. are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
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. Figures below are for the fiscal year ended December 31,
1995.
Investment management fee 0.75%
12b-1 fees None
Other expenses 0.46%
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Total Fund operating expenses 1.21%
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Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$12 $ 38 $66 $147
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above 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.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed over the past 10 years,
assuming reinvestment of all distributions. Performance is historical
and may not be indicative of future results. Total return and
principal value will fluctuate.
THE PRINTED DOCUMENT CONTAINED A BAR CHART HERE
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: Below
1986 77.54%
1987 33.01
1988 19.40
1989 11.63
1990 -16.36
1991 3.11
1992 -16.74
1993 23.64
1994 10.03
1995 -9.07
The Fund's Average Annual Total Return for the
period ended September 30, 1996
One Year -2.15%
Five Years -1.41
Ten Years 4.54
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is managed by a team of Scudder
investment professionals, who each play an important role in the
Fund's management process.
Lead Portfolio Manager Seung Kwak has had responsibility for the
Fund's investment strategy and daily operations since 1994 and has
been a member of the portfolio management team since 1989. Mr. Kwak
has directed our Tokyo-based research effort since he joined Scudder
in 1988. Elizabeth J. Allan, Portfolio Manager, helps set the Fund's
general investment strategies, and was responsible for the Fund's
investment strategy and daily operations from 1991 to 1994. Ms. Allan
has contributed her expertise to the management of the portfolio since
she joined Scudder in 1987 and has numerous years of Pacific Basin
research and investing experience.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The current minimum initial investment is
$1,000. Effective January 1, 1997, shareholders will be required to
make an initial investment worth at least $2,500, while the minimum
subsequent investment will remain at $100. Shareholders with
non-fiduciary accounts who maintain an account balance of less than
$2,500 in the Fund without establishing a regular investment program,
may be assessed an annual $10 per fund charge, payable to the Fund.
The initial investment and minimum account balance for fiduciary
accounts such as IRA's will increase from $500 to $1,000 per fund
account, while the minimum subsequent investment will remain at $50. A
shareholder may open a regular account with a minimum of $1,000 if an
investment program of $100/month is established. After January 1,
1997, a shareholder who maintains an account balance of less than
$2,500 without establishing an investment program may be assessed an
annual fee of $10.00, payable to the Fund. Scudder retirement plans
and certain other accounts name similar or lower minimums. You may
also exchange shares free of charge within the Scudder Family of
Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by telephone, fax, or mail.
10. When Are Distributions Made?
The Fund typically makes distributions in December. You may elect to
receive distributions in cash or have them reinvested in additional
shares of the Fund.
All dividends from net investment income are taxable to shareholders
as ordinary income. Differences between dividend distributions
reported to shareholders for tax purposes and actual distributions
received by shareholders as either cash or additional shares may
reflect the Fund's payment of withholding taxes imposed by Japan on
dividends and interest under the tax convention between the United
States and Japan. Such payments to Japan are considered distributions
to shareholders for tax purposes. Subject to applicable limitations,
such amounts may be claimed as a foreign tax credit by shareholders or
may be deducted by shareholders in computing their federal taxable
income.
Long-term capital gain distributions, if any, are taxable as long-term
capital gain regardless of the length of time you have owned your
shares. Distributions of short-term capital gain are taxable as
ordinary income.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
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[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about The Japan Fund, Inc. If
you would like more information before you invest, please consult the
Fund's accompanying prospectus. For details about the Fund's holdings
or recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-53-JAPAN.
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