Managed Government Securities Fund
Managed Federal Securities Fund
Managed Cash Fund
Managed Tax-Free Fund
345 Park Avenue, New York, New York 10154
(800) 854-8525
Investment Manager
Scudder, Stevens & Clark, Inc.
345 Park Avenue
New York, New York 10154
Distributor
Scudder Investor Services, Inc.
Two International Place
Boston, Massachusetts 02110
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Fund Accounting Agent
Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Transfer Agent and
Dividend Disbursing Agent
Scudder Service Corporation
P.O. Box 2038
Boston, Massachusetts 02106
Legal Counsel
Sullivan & Cromwell
New York, New York
The Funds are neither insured nor guaranteed by the U.S. Government.
Each Fund intends to maintain a net asset value per share of $1.00 but
there is no assurance that it will be able to do so.
This report is for the information of the shareholders. Its use in
connection with any offering of the Company's shares is authorized
only in case of a concurrent or prior delivery of the Company's
current prospectus.
MANAGED GOVERNMENT SECURITIES FUND
MANAGED FEDERAL SECURITIES FUND
MANAGED CASH FUND
MANAGED TAX-FREE FUND
ANNUAL REPORT
DECEMBER 31, 1994
Board of Directors
DAVID S. LEE(1) Chairman of the Board; Managing
Director, Scudder, Stevens & Clark,
Inc.
EDGAR R. FIEDLER(1) (2) (3) Vice President and Economic Counsellor,
The Conference Board; formerly
Assistant Secretary of the Treasury for
Economic Policy
PETER B. FREEMAN(2) (3) Corporate Director and Trustee
ROBERT W. LEAR(2) (3) Executive-in-Residence and Visiting
Professor, Columbia University Graduate
School of Business; Director or
Trustee, Various Organizations
DANIEL PIERCE(1) President; Chairman of the Board,
Scudder, Stevens & Clark, Inc.
(1)Member of Executive Committee
(2)Member of Nominating Committee
(3)Member of Audit Committee
Officers
DAVID S. LEE Chairman of the Board
DANIEL PIERCE President
THOMAS W. JOSEPH Vice President and Assistant Secretary
THOMAS F. McDONOUGH Vice President and Assistant Secretary
PAMELA A. McGRATH Vice President and Treasurer
IRENE McC. PELLICONI Secretary
February 21, 1995
Dear Shareholder:
The Company provided competitive investment results to its
shareholders in 1994. The Company, operated for institutions and their
clients, includes four money market funds: Managed Government
Securities Fund, Managed Federal Securities Fund, Managed Cash Fund
and Managed Tax-Free Fund.
Each Fund seeks to provide as high a level of current income as
is consistent with preservation of capital and liquidity. The Managed
Federal Securities Fund seeks to maximize income that cannot be
subjected to state and local income taxes by reason of Federal law and
the Managed Tax-Free Fund seeks to provide income exempt from Federal
income tax. The Funds differ from each other in the types of money
market instruments in which each invests.
Aggregate net assets of the Funds were $573 million at December
31, 1994. A table showing dividend payments and other financial
information for the five years ended December 31, for each Fund,
except for the Managed Federal Securities Fund which commenced
operations on July 17, 1991, is on page 16.
Net asset value per share of each Fund was maintained at $1.00.
Audited financial statements for the year ended December 31,
1994 and a list of each Fund's investments as of that date are set
forth on the following pages.
If you have any questions concerning your Company or any of its
Funds, please call toll free (800) 854-8525 from any continental
state. We will be glad to hear from you at any time.
/s/David S. Lee
David S. Lee
Chairman
<PAGE>
<TABLE>
MANAGED GOVERNMENT SECURITIES FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2a)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT -- 11.2%
Donaldson, Lufkin & Jenrette Securities Corp., dated
12/30/94 (proceeds at maturity $7,703,025)
collateralized by $7,711,000 U.S. Treasury Note,
6%, 6/30/96 (cost $7,698,000) (note 3) . . . . . . . . 5.96% 1/3/95 $ 7,698,000 $ 7,698,000
------------
U.S. AGENCY OBLIGATIONS -- 83.3%
All Nippon Airways Co. Ltd. Variable Rate Note
(Guaranteed by Export-Import Bank) . . . . . . . . . . 6.35 1/3/95* 1,200,000 1,200,000
Federal Farm Credit Bank Discount Note . . . . . . . . . 5.69 1/5/95 5,000,000 4,996,883
Federal Farm Credit Bank Discount Note . . . . . . . . . 5.70 1/17/95 3,000,000 2,992,507
Federal Farm Credit Bank Discount Note . . . . . . . . . 5.75 2/24/95 10,000,000 9,914,950
Federal Home Loan Bank Discount Note . . . . . . . . . . 5.82 1/4/95 4,000,000 3,998,087
Federal Home Loan Bank Discount Note . . . . . . . . . . 5.68 1/10/95 5,000,000 4,993,000
Federal Home Loan Mortgage Corp. Discount Note . . . . . 5.94 1/30/95 3,000,000 2,985,838
Federal Home Loan Mortgage Corp. Discount Note . . . . . 5.75 2/16/95 5,000,000 4,963,775
Federal National Mortgage Assn. Discount Note . . . . . . 5.88 1/4/95 3,000,000 2,998,550
Federal National Mortgage Assn. Discount Note . . . . . . 5.70 1/18/95 5,110,000 5,096,439
Federal National Mortgage Assn. Discount Note . . . . . . 6.06 2/7/95 3,000,000 2,981,562
Federal National Mortgage Assn. Discount Note . . . . . . 5.76 2/17/95 5,000,000 4,962,922
Federal National Mortgage Assn. Variable Rate Note . . . 6.15 3/14/95* 5,000,000 5,000,000
------------
TOTAL U.S. AGENCY OBLIGATIONS (cost $57,084,513) . . . . . . . . . . . . . . . . . . . . . . 57,084,513
------------
TOTAL INVESTMENTS -- 94.5% (cost $64,782,513)** . . . . . . . . . . . . . . . . . . . . . . . 64,782,513
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VALUE
(NOTE 2a)
------------
<S> <C>
OTHER ASSETS AND LIABILITIES -- 5.5%
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,157,064
Interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,959
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (286,638)
Payable for Capital Stock redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,745)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,700)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (160,476)
------------
3,774,464
------------
NET ASSETS -- 100.0%
Applicable to 68,556,977 shares of $.001 par value Capital Stock outstanding;
3,000,000,000 shares authorized (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . $ 68,556,977
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
* Date of next interest rate change.
** Cost for federal income tax purposes.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
MANAGED FEDERAL SECURITIES FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2a)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 100.2%
U.S. Treasury Bill . . . . . . . . . . . . . . . . . . . 4.18% 1/12/95 $ 12,842,000 $ 12,825,599
------------
TOTAL U.S. TREASURY OBLIGATIONS (cost $12,825,599)** . . . . . . . . . . . . . . . . . . . . . 12,825,599
------------
OTHER ASSETS AND LIABILITIES -- (0.2)%
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,357
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,652
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46,778)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (39,603)
------------
(20,372)
------------
NET ASSETS -- 100.0%
Applicable to 12,805,227 shares of $.001 par value Capital Stock
outstanding; 1,000,000,000 shares authorized (note 7) . . . . . . . . . . . . . . . . . . . $ 12,805,227
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
**Cost for federal income tax purposes.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
MANAGED CASH FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2a)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- 26.7%
ABN-AMRO North American Finance Inc. (Yankee) . . . . . . 5.89% 2/17/95 $ 10,000,000 $ 9,999,859
Banque National de Paris . . . . . . . . . . . . . . . . 5.88 1/5/95 15,000,000 15,000,016
Bayerische Landesbank (Yankee) . . . . . . . . . . . . . 5.96 1/23/95 15,000,000 15,000,000
Canadian Imperial Bank of Commerce . . . . . . . . . . . 6.29 2/23/95 15,000,000 15,000,000
National Westminster Bank PLC (Yankee) . . . . . . . . . 5.85 1/17/95 15,000,000 15,000,132
Rabobank Nederland, NV (Yankee) . . . . . . . . . . . . . 6.52 4/20/95 10,000,000 9,999,693
Societe Generale (Yankee) . . . . . . . . . . . . . . . . 6.18 3/6/95 18,000,000 18,000,000
------------
TOTAL CERTIFICATES OF DEPOSIT (cost $97,999,700) . . . . . . . . . . . . . . . . . . . . . . 97,999,700
------------
COMMERCIAL PAPER -- 39.5%
Abbey National North America . . . . . . . . . . . . . . 5.83 2/15/95 15,000,000 14,892,187
Associates Corp. of North America . . . . . . . . . . . . 6.13 1/23/95 15,000,000 14,944,542
AT&T Corp. . . . . . . . . . . . . . . . . . . . . . . . 6.32 3/22/95 10,000,000 9,861,556
Barclays U.S. Funding Corp. . . . . . . . . . . . . . . . 6.10 3/1/95 10,000,000 9,901,339
J.P. Morgan & Co. Inc. . . . . . . . . . . . . . . . . . 6.24 3/1/95 15,000,000 14,848,813
New Center Asset Trust . . . . . . . . . . . . . . . . . 5.82 1/17/95 10,000,000 9,974,489
New Center Asset Trust . . . . . . . . . . . . . . . . . 6.20 2/10/95 8,000,000 7,945,600
Norfolk Southern Corp. . . . . . . . . . . . . . . . . . 6.39 4/4/95 15,000,000 14,755,875
Receivables Capital Corp. . . . . . . . . . . . . . . . . 6.11 1/6/95 15,333,000 15,320,159
Rincon Securities Inc. (LOC Trust Co. of Georgia) . . . . 5.58 1/18/95 17,650,000 17,604,159
Santander Finance Inc. (Delaware ) . . . . . . . . . . . 5.70 2/14/95 15,000,000 14,896,875
------------
TOTAL COMMERCIAL PAPER (cost $144,945,594) . . . . . . . . . . . . . . . . . . . . . . . . . 144,945,594
------------
REPURCHASE AGREEMENT -- 11.5%
Donaldson, Lufkin & Jenrette Securities Corp.,
dated 12/30/94 (proceeds at maturity $42,144,493)
collateralized by $44,317,000 U.S. Treasury Note,
4.75%, 2/15/97 (cost $42,117,000) (note 3) . . . . . . 5.96 1/3/95 42,117,000 42,117,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 10.2%
Student Loan Marketing Association Variable Rate Note . . 5.89 1/4/95* 15,000,000 15,000,000
Student Loan Marketing Association Variable Rate Note . . 5.91 1/4/95* 22,400,000 22,391,840
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $37,391,840) . . . . . . . . . . . . . . . . . 37,391,840
------------
</TABLE>
<PAGE>
MANAGED CASH FUND (CONTINUED)
<TABLE>
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2a)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
VARIABLE COUPON RENEWABLE NOTES -- 11.7%
Adesa Funding Corp. (LOC Banc One) . . . . . . . . . . . 6.28% 1/5/95* $ 3,524,000 $ 3,524,000
Banc One Texas NA . . . . . . . . . . . . . . . . . . . . 5.72 1/3/95* 10,000,000 10,000,000
Citibank Money Market Credit Card Trust . . . . . . . . 6.31 1/10/95* 8,181,817 8,181,817
Development Authority of Richmond County Georgia
Nutra-Sweet Co., Series 1990 (LOC Union Bank of
Switzerland) . . . . . . . . . . . . . . . . . . . . 6.10 1/3/95* 96,000,000 6,000,000
MMR Funding I (LOC Bayerische Vereinsbank) . . . . . . . 6.28 1/5/95* 5,500,000 5,500,000
Society Bank NA . . . . . . . . . . . . . . . . . . . . . 5.67 1/3/95* 10,000,000 9,997,691
------------
TOTAL VARIABLE COUPON RENEWABLE NOTES (cost $43,203,508) . . . . . . . . . . . . . . . . . . 43,203,508
------------
TOTAL INVESTMENTS -- 99.6% (cost $365,657,642)** . . . . . . . . . . . . . . . . . . . . . . 365,657,642
------------
OTHER ASSETS AND LIABILITIES -- 0.4%
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,279,578
Receivable for Capital Stock sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431,449
Interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044,250
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,738,084)
Payable for Capital Stock redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (198,055)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,249)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (276,601)
------------
1,449,288
------------
NET ASSETS -- 100.0%
Applicable to 367,269,010 shares of $.001 par value Capital Stock outstanding;
3,000,000,000 shares authorized (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . $367,106,930
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
* Date of next interest rate change.
** Cost for federal income tax purposes.
ABBREVIATIONS USED IN THE STATEMENT:
LOC Letter of Credit
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
MANAGED TAX-FREE FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* SHORT-TERM MUNICIPAL SECURITIES-- 100.6% AMOUNT (NOTE 2a)
- ------- --------- ---------
<S> <C> <C> <C>
ALASKA -- 1.6%
VMIG-1 Alaska Housing Finance Corp. General Mortgage Revenue Series 1991-A
VRDN, 5.75%, 6/1/26 . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000 $ 2,000,000
-----------
ARIZONA -- 4.6%
SS&C Pima County Industrial Development Authority, Series 1985 SFE
Technologies Project VRDN, 6%, 12/1/05 . . . . . . . . . . . . . . . 2,700,000 2,700,000
A-1+ Salt River Project Electric System Revenue Refunding Series 1992-A
TOB, 5.75%, 1/1/09 . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
-----------
TOTAL ARIZONA . . . . . . . . . . . . . . . . . . . . . . . . 5,700,000
-----------
ARKANSAS -- 0.1%
VMIG-1 Jonesboro Industrial Revenue Bond Farr Co. Project VRDN,
6.25%, 12/1/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,000 170,000
-----------
CALIFORNIA -- 14.1%
SP-1+ California State RAN, 5%, 6/28/95 . . . . . . . . . . . . . . . . . . . 750,000 752,869
A-1 Corona Multi-Family Housing Revenue, Series 1985-B, VRDN,
6.125%, 1/1/05 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
MIG-1 Fresno Unified School District TRAN, 4.75%, 7/19/95 . . . . . . . . . . 1,950,000 1,956,216
A-1 Lancaster Household Bank Project Antelope Pines Estate Series 1984-A
VRDN, 6.125%, 11/1/04 . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
SP-1+ Los Angeles County TRAN, 4.5%, 6/30/95 . . . . . . . . . . . . . . . . . 2,000,000 2,006,171
SP-1+ Los Angeles County Unified School District TRAN, 4.5%, 7/10/95 . . . . . 1,000,000 1,004,519
SS&C San Macros Multi-Family Housing Revenue Household Bank Project
Series 1985 VRDN, 6.125%, 6/1/05 . . . . . . . . . . . . . . . . . . 6,900,000 6,900,000
-----------
TOTAL CALIFORNIA . . . . . . . . . . . . . . . . . . . . . . 17,619,775
-----------
COLORADO -- 3.7%
VMIG-1 Colorado Student Loan Obligation Bond Authority Series 1990-C VRDN,
5.05%, 3/1/00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
VMIG-1 Regional Transportation District Colorado Special Passenger Fair
Revenue Bond VRDN, 5.05%, 6/1/99 . . . . . . . . . . . . . . . . . . 1,700,000 1,700,000
-----------
TOTAL COLORADO . . . . . . . . . . . . . . . . . . . . . . . 4,600,000
-----------
CONNECTICUT -- 1.6%
A-1+ Hartford Multi-Family Housing Underwood Towers Project
VRDN, 5.75%, 6/1/20 . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
-----------
FLORIDA -- 6.0%
VMIG-1 Broward County Housing Finance Authority Welleby Apartments
Project VRDN, 5.7%, 12/1/06 . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
A-1+ Dade County Water and Sewer System Revenue Series 1994 VRDN
FGIC Insured, 4.95%, 10/5/22 . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
VMIG-1 Florida Local Government Finance Authority VRDN, 5.5%, 9/1/16 . . . . . 2,500,000 2,500,000
-----------
TOTAL FLORIDA . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000
-----------
GEORGIA -- 6.6%
A-1+ DeKalb Private Hospital Authority Egleston Children's Hospital at
Emory University Series 1984-B VRDN, 5.4%, 3/1/24 . . . . . . . . . . 2,100,000 2,100,000
A-1+ LaGrange Industrial Development Authority Sara Lee Corp. Project VRDN, .
5.7%, 10/1/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
</TABLE>
<PAGE>
MANAGED TAX-FREE FUND
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2a)
- ------- --------- ---------
<S> <C> <C> <C>
SS&C Savannah Downtown Development Authority, Series 1985
VRDN, 6%, 5/1/15 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 $ 1,000,000
A-1+ Turner County Industrial Development Revenue Coats & Clark Inc.
Series 1984 VRDN, 3.6%, 10/1/98 . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
-----------
TOTAL GEORGIA . . . . . . . . . . . . . . . . . . . . . . . . 8,200,000
-----------
IDAHO -- 0.8%
SP-1+ Idaho General Obligation TAN, 4.5%, 6/29/95 . . . . . . . . . . . . . . 1,000,000 1,003,211
-----------
ILLINOIS -- 8.4%
A-1+ Illinois Development Finance Authority Pollution Control Revenue
Illinois Power Co. TECP, 3.6%, 1/13/95 . . . . . . . . . . . . . . . 3,700,000 3,700,000
VMIG-1 Illinois Educational Facilities Authority University Pooled Finance
Program VRDN FGIC Insured, 5.6%, 12/1/05 . . . . . . . . . . . . . . 4,710,000 4,710,000
A-1+ Illinois Health Facilities Authority Highland Park Hospital Revenue
Series 1991-B OP FGIC Insured, 3.75%, 6/1/95 . . . . . . . . . . . . 2,000,000 2,000,000
-----------
TOTAL ILLINOIS . . . . . . . . . . . . . . . . . . . . . . . 10,410,000
-----------
IOWA -- 1.6%
SP-1+ Iowa School Corporation Warrant Certificates Series 1994-A Capital
Guaranty Insured, 4.25%, 7/17/95 . . . . . . . . . . . . . . . . . . 2,000,000 2,006,759
-----------
LOUISIANA -- 3.8%
A-1+ Louisiana Recovery District Sales Tax Revenue Bonds Series 1988
VRDN FGIC Insured, 5.85%, 7/1/97 . . . . . . . . . . . . . . . . . . 4,700,000 4,700,000
-----------
MAINE -- 1.8%
SP-1+ Maine TAN Series 1994, 4.5%, 6/30/95 . . . . . . . . . . . . . . . . . . 2,200,000 2,206,261
-----------
MARYLAND -- 3.5%
MIG-1 Anne Arundel County Port Facilities Revenue Baltimore Gas & Electric
TECP, 5.1%, 1/3/95 . . . . . . . . . . . . . . . . . . . . . . . . . 4,320,000 4,320,000
-----------
MASSACHUSETTS -- 1.6%
A-1+ Commonwealth of Massachusetts Bay Transportation Authority
Series 1984-A OP, 3.75%, 3/1/95 . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
SS&C Commonwealth of Massachusetts General Obligation Bond, 5.5%, 11/1/95 . . 1,000,000 1,006,396
-----------
TOTAL MASSACHUSETTS . . . . . . . . . . . . . . . . . . . . . 2,006,396
-----------
MISSOURI -- 0.8%
P-1 St. Louis Industrial Development Authority Kirkwood Project
Series 1985 VRDN, 6%, 12/1/15 . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
-----------
NEW HAMPSHIRE -- 1.6%
A-1+ New Hampshire Business Finance Authority Connecticut Light & Power
VRDN, 5.65%, 12/1/22 . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
-----------
NEW MEXICO -- 1.2%
A-1 Belen Industrial Revenue Refunding Bond United Desiccants Project
VRDN, 5.65%, 4/1/00 . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
-----------
NEW YORK -- 0.8%
VMIG-1 New York City General Obligation Series 1994-H-2 VRDN MBIA Insured,
5.85%, 8/1/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2a)
- ------- --------- ---------
<S> <C> <C> <C>
PENNSYLVANIA -- 14.0%
SS&C Elk County Stackpole Corporation Series 1989 VRDN, 4.245%, 3/1/04. . . . $ 750,000 $ 750,000
A-1+ Emmaus General Authority Local Government Revenue Bond Pool
Series G-3 VRDN, 5.65%, 3/1/24 . . . . . . . . . . . . . . . . . . . 3,450,000 3,450,000
A-1 Emmaus General Authority Local Government Revenue Bond Pool
Series G-4 VRDN, 5.7%, 3/1/24 . . . . . . . . . . . . . . . . . . . . 1,850,000 1,850,000
P-1 Montgomery County Higher Education and Health Series 1988 VRDN
AMBAC Insured, 4.9%, 9/1/18 . . . . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
SP-1+ Pennsylvania State TAN, 4.75%, 6/30/95 . . . . . . . . . . . . . . . . . 1,000,000 1,003,835
SP-1 Philadelphia General Obligation TRAN, 4.75%, 6/15/95 . . . . . . . . . . 5,000,000 5,015,570
SP-1+ Philadelphia School District TRAN, 4.75%, 6/30/95 . . . . . . . . . . . 3,000,000 3,007,825
------------
TOTAL PENNSYLVANIA . . . . . . . . . . . . . . . . . . . . . 17,477,230
------------
TENNESSEE -- 1.2%
SP-1+ Tennessee State Local Development Authority BAN, 4.5%, 6/1/95 . . . . . 1,500,000 1,505,197
------------
TEXAS -- 3.4%
A-1+ Harris County Health Facilities Authority Texas Medical Center
VRDN, MBIA Insured, 6.05%, 2/15/22 . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
A-1+ Harris County Toll Road Revenue VRDN, 5.75%, 8/1/20 . . . . . . . . . . 1,000,000 1,000,000
SP-1+ Texas State RAN, 5%, 8/31/95 . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,011,833
------------
TOTAL TEXAS . . . . . . . . . . . . . . . . . . . . . . . . . 4,211,833
------------
UTAH -- 4.4%
AAA Intermountain Power Agency Refunding Revenue Series-I Prerefunded
Bond, 8.75%, 7/1/95 . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,040,171
MIG-1 Salt Lake City Pooled Hospital Financing TECP, 4.35%, 1/10/95 . . . . . 1,000,000 1,000,000
VMIG-1 Utah Housing Finance Agency Single-Family Mortgage Bond
Series 1993-D VRDN, 5.7%, 7/1/16 . . . . . . . . . . . . . . . . . . 3,400,000 3,400,000
------------
TOTAL UTAH . . . . . . . . . . . . . . . . . . . . . . . . . 5,440,171
------------
VERMONT -- 5.5%
SS&C Vermont Industrial Development Authority Vermont Marble Co.
VRDN, 4.245%, 12/1/04 . . . . . . . . . . . . . . . . . . . . . . . . 4,170,000 4,170,000
VMIG-1 Vermont Student Assistance Corporation VRDN, 3.75%, 1/1/04 . . . . . . . 2,700,000 2,700,000
-----------
TOTAL VERMONT . . . . . . . . . . . . . . . . . . . . . . . . 6,870,000
-----------
VIRGINIA -- 3.1%
MIG-1 Louisa County Pollution Control Revenue Virginia Electric
Power Company TECP, 3.5%, 2/15/95 . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
MIG-1 York County Pollution Control Revenue Virginia Electric Power
Company TECP, 3.9%, 3/10/95 . . . . . . . . . . . . . . . . . . . . . 1,400,000 1,400,000
------------
TOTAL VIRGINIA . . . . . . . . . . . . . . . . . . . . . . . 3,900,000
------------
WISCONSIN -- 4.8%
SP-1+ Wisconsin State Operating Note, 4.5%, 6/15/95 . . . . . . . . . . . . . 6,000,000 6,014,025
------------
TOTAL INVESTMENT PORTFOLIO -- 100.6% (Cost $125,360,858)** . . . . . . . 125,360,858
------------
</TABLE>
<PAGE>
MANAGED TAX-FREE FUND (CONTINUED)
<TABLE>
VALUE
(NOTE 2a)
------------
<S> <C>
OTHER ASSETS AND LIABILITIES -- (0.6)%
Receivable for Investments sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,000
Interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,203,204
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,495,057)
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (361,999)
Payable for Capital Stock redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,163)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,806)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (163,305)
------------
(764,126)
------------
NET ASSETS -- 100%
Applicable to 124,596,732 shares of $.001 par value Capital Stock outstanding;
1,000,000,000 shares authorized (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . $124,596,732
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
** Cost for federal income tax purposes.
</TABLE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
* CREDIT RATINGS (UNAUDITED) SHOWN ARE EITHER BY MOODY'S INVESTORS
SERVICE, INC., STANDARD & POOR'S CORPORATION OR SCUDDER:
<CAPTION>
MOODY'S STANDARD & POOR'S
<S> <C> <C>
P-1 A-1/A-1+ Commercial paper of the highest quality.
Aaa AAA Judged to be the best quality and carry the smallest amount of investment risk.
Aa AA Judged to be of high quality by all standards. Moody's applies numerical
modifiers 1, 2, and 3 in each rating classification. The modifier 1 indicates
that the security ranks in the higher end of its rating category, and the
modifier 3 indicates that the security ranks in the lower end of its rating
category. Standard & Poor's assigns a corresponding + or - to indicate the
issue's ranking in its associated category.
MIG-1 SP-1/SP-1+ Short-term tax-exempt instrument of the best quality with strong protection.
VMIG-1 Short-term tax-exempt variable rate demand instrument of the best quality
with strong protection.
</TABLE>
<TABLE>
ABBREVIATIONS USED IN THE STATEMENT:
<S> <C> <C> <C>
TECP Tax Exempt Commercial Paper VRDN Variable Rate Demand Note
GO General Obligation SS&C These securities are not rated by either
Moody's or Standard & Poor's. Scudder has
determined that these securities are of
MP, OP Security with a "mandatory or optional comparable quality to rated acceptable
put" feature; date shown represents the notes on a cash flow basis and are of
earliest date the security may be redeemed appropriate credit for the standards
or the interest rate will be reset if the required by the Fund's investment
security is not redeemed objective.
RAN Revenue Anticipation Note TOB Tender Option Bond is a security with a
periodic "put feature"
BAN Bond Anticipation Note TRAN Tax Revenue Anticipation Note
TAN Tax Anticipation Note
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<CAPTION>
MANAGED MANAGED
GOVERNMENT FEDERAL MANAGED MANAGED
SECURITIES SECURITIES CASH TAX-FREE
FUND FUND FUND FUND
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest Income . . . . . . . . . . . . . . $ 3,135,133 $ 506,484 $15,430,767 $ 3,775,176
----------- ---------- ----------- -----------
EXPENSES (note 2c):
Management fee (note 4) . . . . . . . . . . 80,152 -- 948,135 498,692
Shareholder services (notes 4 and 5) . . . 168,039 31,673 645,384 265,015
Directors' fees and expenses (note 4) . . . 23,757 20,039 45,391 43,940
Custodian and Accounting fees (note 4) . . 51,505 12,528 97,205 48,724
Professional services . . . . . . . . . . . 59,623 15,228 130,558 71,229
Reports to shareholders . . . . . . . . . . 4,987 780 22,713 7,660
Amortization of organization expenses . . . -- 2,379 -- --
Registration fees . . . . . . . . . . . . . 15,969 10,352 23,555 20,521
Miscellaneous . . . . . . . . . . . . . . . 8,714 3,191 21,087 6,944
----------- ---------- ----------- -----------
Total expenses before reimbursement . . 412,746 96,170 1,934,028 962,725
Reimbursement from Manager (note 4) . . . . -- (5,585) -- --
----------- ---------- ----------- -----------
Net expenses . . . . . . . . . . . . . . 412,746 90,585 1,934,028 962,725
----------- ---------- ----------- -----------
NET INVESTMENT INCOME AND INCREASE IN NET
ASSETS FROM OPERATIONS . . . . . . . . . $ 2,722,387 $ 415,899 $13,496,739 $ 2,812,451
=========== ========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31,
<CAPTION>
MANAGED GOVERNMENT MANAGED FEDERAL
SECURITIES FUND SECURITIES FUND
------------------------------- -------------------------------
1994 1993 1994 1993
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and increase
in net assets from operations . . . . $ 2,722,387 $ 2,833,014 $ 415,899 $ 282,771
-------------- -------------- -------------- --------------
Dividends (notes 2b and 2d) . . . . . . (2,722,387) (2,833,014) (415,899) (282,771)
-- -- -- --
-------------- -------------- -------------- --------------
CAPITAL STOCK TRANSACTIONS (note 7):
Proceeds from sale of shares . . . . . . 269,803,425 335,556,356 23,109,819 37,932,380
Net asset value of shares issued in
reinvestment of dividends . . . . . . 2,043,089 1,878,316 332,762 269,517
-------------- -------------- -------------- --------------
271,846,514 337,434,672 23,442,581 38,201,897
Cost of shares redeemed . . . . . . . . (295,383,364) (395,908,790) (23,414,968) (37,827,368)
-------------- -------------- -------------- --------------
Increase (decrease) in net assets
from Capital Stock transactions . . . (23,536,850) (58,474,118) 27,613 374,529
-------------- -------------- -------------- --------------
Total increase (decrease) in net assets . . (23,536,850) (58,474,118) 27,613 374,529
NET ASSETS:
Beginning of period . . . . . . . . . . . . 92,093,827 150,567,945 12,777,614 12,403,085
-------------- -------------- -------------- --------------
End of period . . . . . . . . . . . . . . . $ 68,556,977 $ 92,093,827 $ 12,805,227 $ 12,777,614
============== ============== ============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MANAGED CASH FUND MANAGED TAX-FREE FUND
------------------------------- -------------------------------
1994 1993 1994 1993
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and increase
in net assets from operations . . $ 13,496,739 $ 9,825,551 $ 2,812,451 $ 2,105,535
Dividends (notes 2b and 2d) . . . . (13,496,739) (9,825,551) (2,812,451) (2,105,535)
-------------- -------------- -------------- --------------
-- -- -- --
-------------- -------------- -------------- --------------
CAPITAL STOCK TRANSACTIONS (note 7):
Proceeds from sale of shares . . . . 1,838,028,319 1,961,672,439 586,552,129 572,329,633
Net asset value of shares issued in
reinvestment of dividends . . . . 6,568,961 5,298,855 1,385,261 1,128,695
-------------- -------------- -------------- --------------
1,844,597,280 1,966,971,294 587,937,390 573,458,328
Cost of shares redeemed . . . . . . (1,801,334,141) (1,948,559,426) (570,047,516) (557,688,091)
-------------- -------------- -------------- --------------
Increase (decrease) in net assets
from Capital Stock transactions . 43,263,139 18,411,868 17,889,874 15,770,237
-------------- -------------- -------------- --------------
Total increase (decrease) in net assets 43,263,139 18,411,868 17,889,874 15,770,237
NET ASSETS:
Beginning of period . . . . . . . . . . 323,843,791 305,431,923 106,706,858 90,936,621
-------------- -------------- -------------- --------------
End of period . . . . . . . . . . . . . $ 367,106,930 $ 323,843,791 $ 124,596,732 $ 106,706,858
============== ============== ============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED
FROM THE FINANCIAL STATEMENTS.
<CAPTION>
RATIO OF RATIO OF NET
NET ASSET NET ASSET OPERATING INVESTMENT NET ASSETS
VALUE, AT NET VALUE, AT EXPENSES INCOME END OF
BEGINNING INVESTMENT DIVIDENDS END TOTAL TO AVERAGE TO AVERAGE PERIOD
PERIOD OF PERIOD INCOME PAID OF PERIOD RETURN NET ASSETS (a) NET ASSETS (MILLION)
- ------------------------------- --------- ---------- --------- --------- ------ -------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MANAGED GOVERNMENT
SECURITIES FUND
Year ended 12/31/94 . . . . $1.00 $.037 $(.037) $1.00 3.75%* 0.55% 3.61% $ 69
Year ended 12/31/93 . . . . 1.00 .026 (.026) 1.00 2.68* 0.55 2.65 92
Year ended 12/31/92 . . . . 1.00 .035 (.035) 1.00 3.51* 0.55 3.39 151
Year ended 12/31/91 . . . . 1.00 .056 (.056) 1.00 5.65* 0.55 5.54 87
Year ended 12/31/90 . . . . 1.00 .075 (.075) 1.00 7.73* 0.73 7.48 82
MANAGED FEDERAL
SECURITIES FUND
Year ended 12/31/94 . . . . 1.00 .032 (.032) 1.00 3.24* 0.69 3.19 13
Year ended 12/31/93 . . . . 1.00 .024 (.024) 1.00 2.45* 0.52 2.43 13
Year ended 12/31/92 . . . . 1.00 .030 (.030) 1.00 3.02* 0.53 3.00 12
7/17/91(c) to 12/31/91 . . . 1.00 .021 (.021) 1.00 4.80(b)* 0.52(b) 4.67(b) 14
MANAGED CASH FUND
Year ended 12/31/94 . . . . 1.00 .038 (.038) 1.00 3.86* 0.55 3.84 367
Year ended 12/31/93 . . . . 1.00 .028 (.028) 1.00 2.81* 0.55 2.78 324
Year ended 12/31/92 . . . . 1.00 .037 (.037) 1.00 3.74* 0.55 3.76 305
Year ended 12/31/91 . . . . 1.00 .059 (.059) 1.00 6.07* 0.55 5.93 347
Year ended 12/31/90 . . . . 1.00 .076 (.076) 1.00 7.92* 0.67 7.64 385
MANAGED TAX-FREE FUND
Year ended 12/31/94 . . . . 1.00 .023 (.023) 1.00 2.29 0.77 2.26 125
Year ended 12/31/93 . . . . 1.00 .018 (.018) 1.00 1.85 0.78 1.83 107
Year ended 12/31/92 . . . . 1.00 .025 (.025) 1.00 2.56 0.77 2.54 91
Year ended 12/31/91 . . . . 1.00 .042 (.042) 1.00 4.20 0.75 4.14 107
Year ended 12/31/90 . . . . 1.00 .053 (.053) 1.00 5.47 0.77 5.33 135
<FN>
(a) Had the investment manager not voluntarily waived a portion of the management fee, and not reimbursed certain expenses, the
annualized expense ratio would have been, for the Managed Government Securi Securities Fund, Managed Federal Securities Fund
and Managed Cash Fund, 0.84%, 1.22% and 0.68%, for the year ended December 31, 1994, respectively; 0.77%, 1.14% and 0.66%,
for the year ended December 31, 1993, respectively; 0.76%, 1.07% and 0.64%, for the year ended December 31, 1992, respectively;
0.80%, 0.92% and 0.64%, for the year ended December 31, 1991, respectively; for the Managed Government Securities Fund and
Managed Cash Fund, 0.80% and 0.70%, for the year ended December 31, 1990.
(b) Annualized
(c) Date commenced operations.
* Total returns are higher, for the periods indicated, due to the maintenance of the Fund's expenses.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Scudder Fund, Inc. (the "Company") is an open-end diversified management
investment company which currently includes four active money market investment
portfolios: Managed Government Securities Fund, Managed Federal Securities
Fund, Managed Cash Fund, and Managed Tax-Free Fund (collectively, the "Funds").
2. SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies followed by the Company are:
(a) Security Valuation--Each of the Funds values its investments using the
amortized cost method, which involves initially valuing an investment at its
cost and thereafter assuming a constant amortization to maturity of any premium
or discount. This method results in a value approximating market.
(b) Federal Income Taxes--The Company's policy is to qualify each Fund as
a regulated investment company under the Internal Revenue Code and to
distribute all taxable and tax-exempt income, including any realized net
capital gains, to shareholders. Therefore, no Federal income tax provision is
required.
(c) Allocation of Expenses--Expenses not directly chargeable to a specific
Fund are allocated primarily on the basis of relative net assets of the
Company.
(d) Dividends--Dividends from net investment income are declared each
business day to shareholders of record that day for payment on the first
business day of the following month.
(e) Other--Investment transactions are recorded on trade dates. Interest
income, including the accretion or amortization of discount or premium, is
recorded on the accrual basis. Discounts or premiums on securities purchased
are accreted or amortized, respectively, on a straight line basis over the life
of the respective securities. Distributions to shareholders are recorded on the
ex-dividend dates.
The Managed Cash Fund must have at least 25% of its investment portfolio
invested in bankers' acceptances, certificates of deposits, commercial paper,
fixed time deposits or other obligations of domestic and foreign banks.
3. REPURCHASE AGREEMENTS
It is the Company's policy to obtain possession, through its custodian, of
the securities underlying each repurchase agreement to which it is a party,
either through physical delivery or book entry transfer in the Federal Reserve
System or Participants Trust Company. Payment by the Company in respect of a
repurchase agreement is authorized only when proper delivery of the underlying
securities is made to the Company's custodian. The Company's investment manager
values such underlying securities each business day using quotations obtained
from a reputable, independent source. If the Company's investment manager
determines that the value of such underlying securities (including accrued
interest thereon) does not at least equal the value of each repurchase
agreement (including accrued interest thereon) to which such securities are
subject, it will ask for additional securities to be delivered to the Company's
custodian. In connection with each repurchase agreement transaction, if the
seller defaults and the value of the collateral declines or if the seller
enters an insolvency proceeding, realization of the collateral by the Company
may be delayed or limited.
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Company retains Scudder, Stevens & Clark, Inc. ("Scudder") as
investment manager for the Funds, pursuant to investment advisory agreements
between Scudder and the Company on behalf of each such Fund, for a management
fee payable each month, based upon the average daily value of each Fund's net
assets, at annual rates of 0.40% on the first $1.5 billion and 0.35% on any
amount in excess thereof. Scudder has agreed not to impose a portion of its
management fee, to the extent necessary so that expenses of each of the Managed
Government Securities Fund and the Managed Cash Fund do not exceed 0.55% of the
average daily net assets of each Fund.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the year ended December 31, 1994, Scudder did not impose fees
amounting to $221,083, $52,196 and $458,399 on the Managed Government
Securities Fund, the Managed Federal Securities Fund and the Managed Cash Fund,
respectively. In addition, Scudder reimbursed a portion of expenses amounting
to $5,585 for the Managed Federal Securities Fund.
Under certain state regulations, if the total expenses of any of the
Funds, exclusive of taxes, interest, and extraordinary expenses exceed certain
limitations, the Company's investment adviser is required to reimburse the Fund
for such excess up to the amount of management fees. During the year ended
December 31, 1994, no such reimbursement was required.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of Scudder,
is the Company's shareholder service, transfer and dividend disbursing agent.
For the year ended December 31, 1994, the amount charged to the Company by SSC
aggregated $22,023 for the Managed Government Securities Fund, $2,356 for the
Managed Federal Securities Fund, $97,769 for the Managed Cash Fund, and $26,150
for the Managed Tax-Free Fund, of which $1,724, $196, $8,556, and $2,228,
respectively, remain unpaid at December 31, 1994.
Effective August 1, 1994 for the Managed Government Securities Fund,
Managed Federal Securities Fund, and Managed Cash Fund, and August 18, 1994 for
the Managed Tax-Free Fund, Scudder Fund Accounting Corporation ("SFAC"), a
wholly-owned subsidiary of Scudder, assumed responsibility for determining the
daily net asset value per share and maintaining the portfolio and general
accounting records for the Funds. For the year ended December 31, 1994, the
amount charged to the Funds by SFAC aggregated $12,500 for the Managed
Government Securities Fund, $1,264 for the Managed Federal Securities Fund,
$20,231 for the Managed Cash Fund, and $12,490 for the Managed Tax-Free Fund,
of which $2,500, $238, $4,058, and $2,825, respectively, remain unpaid at
December 31, 1994. For the year ended December 31, 1994 for the Managed
Federal Securities Fund, SFAC did not impose fees amounting to $11,236.
The Company has a compensation arrangement under which payment of
directors' fees may be deferred. Interest is accrued (based on the rate of
return earned on the 90 day Treasury Bill as determined at the beginning of
each calendar quarter) on the deferred balances and is included in "Directors'
fees and expenses." The accumulated balance of deferred directors' fees and
interest thereon relating to the Funds constituting the Company aggregated
$406,611, an applicable portion of which is included in accrued expenses of
each such Fund.
5. SHAREHOLDER SERVICES
Each of the Funds has special arrangements with certain banks,
institutions and other persons under which they receive compensation from the
Funds and Scudder for performing shareholder servicing functions for their
customers who own shares in the Funds from time to time. For the year ended
December 31, 1994, payments by the Funds pursuant to these arrangements
aggregated $141,429 for the Managed Government Securities Fund, $28,522 for the
Managed Federal Securities Fund, $526,308 for the Managed Cash Fund and
$235,366 for the Managed Tax-Free Fund.
6. SHAREHOLDER SERVICE, ADMINISTRATION AND DISTRIBUTION PLAN
The Company has a Shareholder Service, Administration and Distribution
Plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940
under which participating organizations which enter into agreements with the
Company and Scudder may receive a fee of up to 0.25% on an annual basis from
each of the Company and Scudder. Such fee is calculated on the average daily
net assets of the Company for which such participating organizations are
responsible. No payments have been made by the Company for shareholder service,
administration and distribution assistance under this plan other than as
indicated in Note 5 above.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
7. CAPITAL STOCK
At December 31, 1994, the Company had 10,000,000,000 shares of $.001 par
value Capital Stock authorized, of which 3,000,000,000 shares each have been
designated for the Managed Government Securities Fund and Managed Cash Fund and
1,000,000,000 shares each have been designated for the Managed Federal
Securities Fund and Managed Tax-Free Fund. Net paid in capital in excess of par
value was $68,488,420, for the Managed Government Securities Fund, $12,792,422
for the Managed Federal Securities Fund, $366,739,661 for the Managed Cash Fund
and $124,472,135 for the Managed Tax-Free Fund. At December 31, 1994, one
holder of record of the Managed Federal Securities Fund held approximately 67%
of the outstanding shares.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
SCUDDER FUND, INC.
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Managed Government Securities Fund, Managed Federal Securities Fund,
Managed Cash Fund, and Managed Tax-Free Fund (each a separate portfolio of
Scudder Fund, Inc., hereafter referred to as the "Fund") at December 31, 1994,
the results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended
(except for the Managed Federal Securities Fund which commenced operations on
July 7, 1991), in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial presentation. We
believe that our audits, which included confirmation of securities at December
31, 1994 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 21, 1995
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF 1994 DIVIDENDS
The total amount of dividends declared in 1994 by each of the Managed
Government Securities Fund, Managed Federal Securities Fund and Managed Cash
Fund of Scudder Fund, Inc. is taxable as ordinary dividend income for Federal
income tax purposes. None of this amount qualifies for the dividends received
deduction available to corporations.
All of the dividends from the Managed Tax-Free Fund declared in 1994 are
exempt from Federal income tax. However, in accordance with the Internal
Revenue Code, you are required to report them on your 1994 Federal income tax
return.
Although dividend income from the Managed Tax-Free Fund is exempt from
Federal taxation, it may not be exempt from state or local taxation. You should
consult your tax advisor as to the state and local tax status of the dividends
you received.
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