MANAGED GOVERNMENT SECURITIES FUND
MANAGED FEDERAL SECURITIES FUND
MANAGED CASH FUND
MANAGED TAX-FREE FUND
- - --------------------------------------------------------------------------------
MID-YEAR REPORT
JUNE 30, 1996
- - --------------------------------------------------------------------------------
<PAGE>
Board of Directors
<TABLE>
<S> <C>
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
K. SUE COTE Vice President
JERARD K. HARTMAN Vice President
KATHRYN L. QUIRK Vice 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
</TABLE>
2
<PAGE>
Dear Shareholder:
Operated exclusively for institutions and their clients, Scudder Fund, Inc.
provided competitive investment results in the first six months of 1996. Scudder
Fund, Inc. includes four separate money market funds -- Managed Government
Securities Fund, Managed Federal Securities Fund, Managed Cash Fund, and Managed
Tax-Free Fund. Each Fund seeks to provide a high level of income while
preserving capital and maintaining liquidity.
All four funds seek to maintain a net asset value of $1.00, and have done so
since their inception. (There is no guarantee, of course, that each fund will
maintain stable net asset values.) The Managed Federal Securities Fund seeks to
maximize income exempt from state and local income taxes, while the Managed
Tax-Free Fund seeks to provide income exempt from Federal income tax.
Total net assets were $556 million on June 30, compared with $568 million six
months earlier. A table showing dividend payments and other financial
information for the six months ended June 30 is on page 16. This table also
shows dividend payments and financial information for each fund for the five
years ended December 31 and for the six months ended June 30 (except the Managed
Federal Securities Fund, which commenced operations on July 17, 1991). In
addition, please see the following pages for financial statements for the six
month period ended June 30, 1996, as well as a list of each Fund's investments.
If you have any questions concerning any of these funds, please call toll free
(800) 854-8525 from any continental state.
/s/David S. Lee
David S. Lee
Chairman
3
<PAGE>
<PAGE>
MANAGED GOVERNMENT SECURITIES FUND
<TABLE>
STATEMENT OF NET ASSETS (UNAUDITED)
JUNE 30, 1996
<CAPTION>
MATURITY PRINCIPAL VALUE
DATE AMOUNT (NOTE 2A)
-------- --------- ---------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 13.2%
Donaldson, Lufkin & Jenrette Securities Corp., dated
6/28/95 at 5.45% (proceeds at maturity $9,836,465)
collateralized by $10,058,000 U.S. Treasury Note,
4.75%, 8/31/98 (cost $9,832,000) (note 3) ..................... 7/1/96 $ 9,832,000 $ 9,832,000
-----------
U.S. AGENCY OBLIGATIONS - 87.2%
Federal Farm Credit Bank Discount Note ......................... 7/5/96 4,300,000 4,297,497
Federal Farm Credit Bank Discount Note ......................... 7/18/96 5,000,000 4,987,557
Federal Farm Credit Bank Discount Note ......................... 8/30/96 2,500,000 2,477,958
Federal Home Loan Bank Discount Note ........................... 7/22/96 6,000,000 5,981,555
Federal Home Loan Mortgage Corp. Discount Note ................. 7/5/96 6,000,000 5,996,527
Federal Home Loan Mortgage Corp. Discount Note ................. 7/15/96 10,000,000 9,979,653
Federal Home Loan Mortgage Corp. Discount Note ................. 7/31/96 3,000,000 2,986,900
Federal Home Loan Mortgage Corp. Discount Note ................. 7/31/96 3,000,000 2,987,875
Federal Home Loan Mortgage Corp. Discount Note ................. 8/13/96 3,000,000 2,981,474
Federal Home Loan Mortgage Corp. Discount Note ................. 8/21/96 6,000,000 5,955,885
Federal National Mortgage Assn. Discount Note .................. 8/8/96 4,000,000 3,977,960
Federal National Mortgage Assn. Discount Note .................. 8/23/96 1,500,000 1,488,517
Federal National Mortgage Assn. Discount Note .................. 9/19/96 3,000,000 2,964,400
Federal National Mortgage Assn. Discount Note .................. 9/24/96 3,000,000 2,963,308
Federal National Mortgage Assn. Medium Term Note, 5.52% ........ 9/14/96* 5,000,000 5,000,000
-----------
TOTAL U.S. AGENCY OBLIGATIONS (cost $65,027,066) ....................................... 65,027,066
-----------
TOTAL INVESTMENTS - 100.4% (cost $74,859,066)** ........................................ 74,859,066
-----------
OTHER ASSETS AND LIABILITIES - (0.4%)
Cash ................................................................................... 861
Receivable for capital stock sold ...................................................... 600
Interest receivable and other assets ................................................... 62,707
Dividend payable ....................................................................... (273,021)
Management fee payable (note 4) ........................................................ (14,993)
Accrued expenses (note 4) .............................................................. (100,275)
-----------
(324,121)
-----------
NET ASSETS - 100.0%
Applicable to 74,534,945 shares of $.001 par value Capital Stock outstanding;
3,000,000,000 shares authorized (note 7) .............................................. $74,534,945
===========
NET ASSET VALUE PER SHARE .............................................................. $ 1.00
===========
<FN>
* Date of next interest rate change.
** Cost for federal income tax purposes.
</FN>
</TABLE>
See notes to financial statements.
4
<PAGE>
MANAGED FEDERAL SECURITIES FUND
<TABLE>
STATEMENT OF NET ASSETS
(UNAUDITED)
JUNE 30, 1996
<CAPTION>
MATURITY PRINCIPAL VALUE
DATE AMOUNT (NOTE 2A)
-------- --------- ---------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS - 102.7%
U.S. Treasury Bill ....................... 7/5/96 $2,600,000 $ 2,598,561
U.S. Treasury Bill ....................... 7/11/96 1,400,000 1,398,118
U.S. Treasury Bill ....................... 7/25/96 2,650,000 2,641,355
U.S. Treasury Bill ....................... 8/1/96 1,000,000 995,910
U.S. Treasury Bill ....................... 8/22/96 815,000 809,073
U.S. Treasury Bill ....................... 8/29/96 500,000 495,862
U.S. Treasury Bill ....................... 9/5/96 1,700,000 1,684,136
U.S. Treasury Bill ....................... 9/19/96 1,000,000 988,644
-----------
TOTAL U.S. TREASURY OBLIGATIONS (cost $11,611,659)** .............. 11,611,659
-----------
OTHER ASSETS AND LIABILITIES - (2.7%)
Other assets ...................................................... 8,307
Due to custodian bank ............................................. (240,572)
Dividend payable .................................................. (41,974)
Accrued expenses (note 4) ......................................... (34,346)
-----------
(308,585)
-----------
NET ASSETS - 100.0%
Applicable to 11,303,074 shares of $.001 par value Capital Stock
outstanding; 1,000,000,000 shares authorized (note 7) ............ $11,303,074
===========
NET ASSET VALUE PER SHARE ......................................... $ 1.00
===========
<FN>
** Cost for federal income tax purposes.
</FN>
</TABLE>
See notes to financial statements.
5
<PAGE>
MANAGED CASH FUND
<TABLE>
STATEMENT OF NET ASSETS (UNAUDITED)
JUNE 30, 1996
<CAPTION>
MATURITY PRINCIPAL VALUE
DATE AMOUNT (NOTE 2A)
-------- --------- ---------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- 16.3%
American Express Centurian Bank, 5.35% .................... 7/9/96 $15,000,000 $ 14,999,992
Bank of Nova Scotia (Yankee), 5.35% ....................... 7/26/96 10,000,000 10,000,069
Deutsche Bank (Yankee), 5.42% ............................ 9/30/96 15,000,000 14,998,417
Wachovia Bank of North Carolina, 5.32% ................... 7/9/96 15,000,000 14,999,995
------------
TOTAL CERTIFICATES OF DEPOSIT (cost $54,998,473) .......................................... 54,998,473
------------
COMMERCIAL PAPER -- 46.4%
AIG Funding Inc. ......................................... 7/11/96 14,000,000 13,979,505
Ameritech Corp. .......................................... 7/30/96 13,000,000 12,944,183
Associates Corp. of North America ......................... 7/15/96 15,000,000 14,968,850
BellSouth Capital Funding Corp. .......................... 7/30/96 15,000,000 14,935,717
Dresdner U.S. Finance Inc. ............................... 10/2/96 10,000,000 9,866,442
General Electric Capital Corp. ........................... 7/9/96 15,000,000 14,982,333
J.P. Morgan & Co. Inc. ................................... 9/5/96 10,000,000 9,908,517
Minnesota Mining & Manufacturing Co. ...................... 7/9/96 15,000,000 14,982,333
Motorola Inc. ............................................ 7/9/96 15,000,000 14,982,333
New Center Asset Trust ................................... 9/25/96 10,000,000 9,871,000
Norwest Corp. ............................................ 8/27/96 15,000,000 14,872,225
Preferred Receivables Funding Corp. ....................... 7/18/96 10,000,000 9,975,067
------------
TOTAL COMMERCIAL PAPER (cost $156,268,505) ................................................. 156,268,505
------------
REPURCHASE AGREEMENT -- 7.0%
Donaldson, Lufkin & Jenrette Securities Corp.,
dated 6/28/96 at 5.45% (proceeds at maturity $23,524,679)
collateralized by $23,139,000 U.S. Treasury Note,
5.625%, 6/30/97 (cost $23,514,000) ...................... 7/1/96 23,514,000 23,514,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 15.5%
Federal Home Loan Bank Discount Note ...................... 8/1/96 5,000,000 4,979,161
Federal National Mortgage Association Discount Note ....... 7/24/96 9,820,000 9,789,822
Student Loan Marketing Association Variable Rate Note,
5.41% .................................................. 7/2/96* 15,000,000 15,000,000
Student Loan Marketing Association Variable Rate Note,
5.43% ................................................. 7/2/96* 22,400,000 22,395,008
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $52,163,991) ............................... 52,163,991
------------
NOTES -- 14.9%
Adesa Funding Corp. (LOC Banc One), 5.5% .................. 7/4/96* 2,486,000 2,486,000
Bank of America , 5.32% ................................... 8/29/96 10,000,000 10,000,000
Bank of America Illinois, 5.7% ............................ 5/28/97 5,000,000 4,995,143
</TABLE>
See notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE
DATE AMOUNT (NOTE 2A)
-------- --------- ---------
<S> <C> <C> <C>
FCC National Bank, 5.15% ................................... 10/16/96 15,000,000 15,000,000
Fifth Third Bank, 5.33% ................................... 7/18/96 10,000,000 9,999,993
General Electric Capital Corp., 7.625% ..................... 1/10/97 2,000,000 2,022,551
MMR Funding I (LOC Bayerische Vereinsbank), 5.5% .......... 7/4/96* 5,500,000 5,500,000
------------
TOTAL NOTES (cost $50,003,687) ............................................................ 50,003,687
------------
TOTAL INVESTMENTS -- 100.1% (cost $336,948,656)** .......................................... 336,948,656
------------
OTHER ASSETS AND LIABILITIES -- (0.1%)
Cash ...................................................................................... 833
Receivable for capital stock sold ......................................................... 347,880
Interest receivable and other assets ....................................................... 1,106,126
Dividend payable .......................................................................... (1,388,055)
Payable for capital stock redeemed ........................................................ (18,694)
Management fee payable (note 4) ........................................................... (114,406)
Accrued expenses (note 4) ................................................................. (224,753)
------------
(291,069)
------------
NET ASSETS -- 100.0%
Applicable to 336,819,667 shares of $.001 par value Capital Stock outstanding;
3,000,000,000 shares authorized (note 7) ............................................... $336,657,587
============
NET ASSET VALUE PER SHARE ................................................................. $ 1.00
============
<FN>
* Date of next interest rate change.
** Cost for federal income tax purposes.
</FN>
</TABLE>
ABBREVIATIONS USED IN THE STATEMENT:
LOC Letter of Credit
See notes to financial statements.
7
<PAGE>
<TABLE>
MANAGED TAX-FREE FUND
STATEMENT OF NET ASSETS (Unaudited)
JUNE 30, 1996
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- - ------- SHORT-TERM MUNICIPAL SECURITIES -- 100.8% ------ ---------
<S> <C> <C> <C>
ARIZONA
A-1 Pima County Industrial Development Authority Series 1985 SFE
Technologies VRDN, 3.8%, 12/1/05 ......................................... $2,300,000 $ 2,300,000
A-1+ Pima County Industrial Development Authority Tucson Electric Power
Co. 1982 Series A VRDN, 3.35%, 7/1/22 .................................... 1,800,000 1,800,000
A-1 Salt River Project Electric System Revenue Refunding Series 1992#A TOB,
3.35%, 1/1/09 ............................................................ 3,000,000 3,000,000
------------
TOTAL ARIZONA ......................................................... 7,100,000
------------
CALIFORNIA
SP1+ California Community College Finance Authority Pooled TRAN
Series B, 5%, 8/30/96 .................................................... 1,500,000 1,501,176
A-1 Corona Multi#Family Housing Revenue, 3.425%, 2/1/05 ........................ 2,000,000 2,000,000
A-1 Huntington Beach Multi#Family Housing Revenue River Meadows
Apartments Series B VRDN, 3.575%, 10/1/05 ................................ 6,800,000 6,800,000
A-1 Lancaster Household Bank Project Antelope Pines Estate Series 1984#A
VRDN, 3.425%, 11/1/04 .................................................... 3,000,000 3,000,000
SP1+ Los Angeles California Unified School District, 4.5%, 7/3/96 ............... 2,000,000 2,000,061
MIG-1 Los Angeles County Pension Obligation VRDN Series 1996 A, Ambac
Insured, 3.15%, 6/30/07 .................................................. 5,000,000 5,000,000
MIG-1 Los Angeles County California TRAN, 4.5%, 6/30/97 .......................... 1,500,000 1,509,360
SP-1 Los Angeles County TRAN, 4.5%, 7/1/96 ...................................... 1,000,000 1,000,000
SP1+ Los Angeles County Local Educational Agencies Pool TRAN, 4.75%, 7/5/96 ..... 1,000,000 1,000,068
SS&C San Marcos Redevelopment Agency Multi#Family Rental Housing
Agency VRDN, 3.425%, 6/1/05 .............................................. 6,900,000 6,900,000
SP1+ South Coast Local Education Agencies Pooled Tax and Revenue
Anticipation Note Program, 5%, 8/14/96 ................................... 1,000,000 1,000,575
------------
TOTAL CALIFORNIA ...................................................... 31,711,240
------------
COLORADO
A-1+ Colorado Health Facilities Authority Composite Issue for Kaiser Permanente
1995 Series A VRDN, 3.4%, 8/1/15 ......................................... 1,000,000 1,000,000
A-1+ Regional Transportation District Colorado Special Passenger Fair Revenue
Bond VRDN, 3.3%, 6/1/99 .................................................. 1,700,000 1,700,000
------------
TOTAL COLORADO ........................................................ 2,700,000
------------
CONNECTICUT
A-1+ Mashantucket Pequot Tribe Series 1996 TECP, 3.4%, 10/24/96 ................. 2,000,000 2,000,000
------------
DISTRICT OF COLUMBIA
MIG-1 District of Columbia General Obligation General Fund Recovery Series B
VRDN, 3.75%, 6/1/03 ...................................................... 300,000 300,000
MIG-1 District of Columbia, General Obligation VRDN Series A3,
3.8%, 10/1/07 ............................................................ 1,100,000 1,100,000
------------
TOTAL DISTRICT OF COLUMBIA ............................................ 1,400,000
------------
FLORIDA
MIG-1 Broward County Housing Finance Authority Welleby Apartments
Project VRDN, 3.45%, 12/1/06 ............................................. 1,000,000 1,000,000
A-1+ City Of Gainsville Florida Utilities System TECP, 3.4%, 9/9/96 ............. 1,000,000 1,000,000
</TABLE>
See notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- - ------- ------ ---------
<S> <C> <C> <C>
A-1+ Dade County Health Facilities Authority Miami Childrens Hospital VRDN
AMBAC Insured, 3.3%, 9/1/25 .............................................. 1,200,000 1,200,000
A-1+ Dade County Water and Sewer System Revenue Series 1994 VRDN
FGIC Insured, 3.3%, 10/5/22 .............................................. 4,700,000 4,700,000
SP-1+ Orange County School District Series 1995 TAN, 4.5%, 10/16/96 .............. 3,000,000 3,008,760
------------
TOTAL FLORIDA ......................................................... 10,908,760
------------
GEORGIA
P-1 Hapeville Industrial Development Bond Hapeville Hotel VRDN,
3.6%, 11/1/15 ............................................................ 600,000 600,000
MIG-1 Savannah Downtown Development Authority Series 1985 VRDN, 3.675%,
5/1/15 ................................................................... 1,000,000 1,000,000
A-1+ Turner County Industrial Development Revenue Coats & Clark Inc.
Series 1984 VRDN, 3.75%, 10/1/98 ......................................... 2,200,000 2,200,000
------------
TOTAL GEORGIA ......................................................... 3,800,000
------------
ILLINOIS
A-1+ Illinois Health Facilities Authority Rush#Presbytarian/St. Luke's Hospital
Series 1989-A TECP, 3.15%, 8/7/96 ........................................ 2,100,000 2,100,000
A-1+ Illinois Health Facilities Authority Rush Presbytarian/St. Luke's Hospital
Series 1989-A TECP, 3.25%, 8/9/96 ........................................ 800,000 800,000
NONR Pekin Industrial Development Revenue Refunding Bonds BOC Group
Series 1992 VRDN, 3.4%, 9/1/12 ........................................... 2,600,000 2,600,000
------------
TOTAL ILLINOIS 5,500,000
------------
INDIANA
A-1+ Jasper County Pollution Control Revenue Bonds Northern Indiana Public
Service Series 1988 B TECP, 3.7%, 8/19/96 ................................ 2,000,000 2,000,000
A-1+ Sullivan Pollution Control Revenue Hoosier Energy Rural Electric Project
TECP, 3.4%, 9/9/96 ....................................................... 2,000,000 2,000,000
MIG-1 Trustees of Purdue University Student Fee Revenue Bonds Series 1995 K,
3.3%, 7/1/20 ............................................................. 2,400,000 2,400,000
------------
TOTAL INDIANA ......................................................... 6,400,000
------------
MARYLAND
A-1 Ann Arundel County Baltimore Electric And Gas Co. TECP, 3.7%, 8/23/96 ...... 3,020,000 3,020,000
------------
MASSACHUSETTS
P-1 Massachusetts Water Resource Authority Series 1994 TECP, 3.3%, 7/8/96 ...... 1,000,000 1,000,000
------------
MICHIGAN
SP1+ Michigan State General Obligation Unlimited Tax Notes, 4%, 9/30/96 ......... 2,000,000 2,004,897
------------
MISSOURI
P-1 St. Louis Industrial Development Authority Kirkwood Project Series 1985
VRDN, 3.425%, 12/1/15 .................................................... 1,000,000 1,000,000
------------
NEBRASKA
A-1+ Omaha Public Power District TECP, 3.65%, 10/16/96 .......................... 1,300,000 1,300,000
------------
NEW HAMPSHIRE
A-1+ New Hampshire Business Finance Authority Connecticut Light & Power
VRDN, 3.3%, 12/1/22 ...................................................... 2,000,000 2,000,000
------------
</TABLE>
See notes to financial statements.
9
<PAGE>
<TABLE>
MANAGED TAX-FREE FUND (CONTINUED)
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- - ------- ------ ---------
<S> <C> <C> <C>
NEW MEXICO
SS&C Belen Industrial Revenue Refunding Bond United Desiccants Project VRDN,
3.6%, 4/1/00 ............................................................. 1,000,000 1,000,000
------------
NEW YORK
AAA Suffolk County General Obligation Series B Bonds Ambac Insured, 4.5%,
10/15/96 ................................................................. 1,675,000 1,679,525
------------
NORTH CAROLINA
A-1+ North Carolina Municipal Power Agency #1 Catawba Project Series 1996 A
TECP, 3.65%, 11/13/96 .................................................... 2,000,000 2,000,000
------------
OHIO
SS&C Cincinnati City School District Series 1996 A TRAN, 6%, 12/1/97 ............ 2,390,000 2,400,856
A-1+ Ohio State Air Quality Development Authority Revenue Cincinnati Gas and
Electric VRDN, 3.5%, 9/1/30 .............................................. 200,000 200,000
------------
TOTAL OHIO ............................................................ 2,600,856
------------
OREGON
MIG-1 Port of St. Helens Pollution Control Revenue Portland General
Electric Co. Project VRDN, 3.55%, 6/1/10 ................................. 2,000,000 2,000,000
------------
PENNSYLVANIA
MIG-1 Delaware Valley Finance Authority, 3.45%, 12/1/20 .......................... 1,600,000 1,600,000
SS&C Elk County Pennsylvania Industrial Development Authority, 4.21%, 3/1/04 .... 750,000 750,000
A-1+ Emmaus General Authority Pennsylvania Local Government VRDN,
3.35%, 3/1/24 ............................................................ 1,300,000 1,300,000
A-1 Emmaus General Authority Local Government Revenue Bond Pool
Program 1989 Series G-5 VRDN, 3.4%, 3/1/24 ............................... 2,000,000 2,000,000
A-1+ Emmaus General Authority Local Government Revenue Bond Pool
Program Series 1989 G VRDN, 3.35%, 3/1/24 ................................ 1,900,000 1,900,000
MIG-1 Philadelphia General Obligation Bond, 4.5%, 6/30/97 ........................ 1,000,000 1,005,240
------------
TOTAL PENNSYLVANIA .................................................... 8,555,240
------------
SOUTH CAROLINA
P-1 Charleston Industrial Refunding Revenue Bonds Massey Coal Terminal,
VRDN, 3.55%, 1/1/07 ...................................................... 500,000 500,000
------------
TENNESSEE
MIG-1 Clarksville Public Building Authority Pooled Financing Series 1990
VRDN, MBIA Insured, 3.3%, 7/1/13 ......................................... 1,900,000 1,900,000
MIG-1 Franklin Industrial Development Revenue Franklin Oaks Apartments
VRDN, 3.5%, 12/1/07 ...................................................... 2,000,000 2,000,000
------------
TOTAL TENNESSEE ....................................................... 3,900,000
------------
TEXAS
A-1+ Austin Combined Utility Systems TECP, 3.6%, 10/8/96 ........................ 3,000,000 3,000,000
P-1 Grapevine Industrial Development Corp. American Airlines Series A2
VRDN, 3.65%, 12/1/24 ..................................................... 200,000 200,000
MIG-1 Lone Star Texas Airport Improvement Authority Series VRDN, 3.65%,
12/1/14 .................................................................. 400,000 400,000
MIG-1 Lone Star Texas Airport Improvement Authority Series A#4 VRDN, 3.65%,
12/1/14 .................................................................. 400,000 400,000
</TABLE>
See notes to financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- - ------- ------ ---------
<S> <C> <C> <C>
MIG-1 Lone Star Airport Improvement VRDN, 3.65%, 12/1/14 ......................... 400,000 400,000
SS&C Montgomery Industrial Development Authority, 3.4%, 8/1/17 .................. 3,640,000 3,640,000
A-1+ San Antonio Electric and Gas City Public Services Series 1995 A
TECP, 3.1%, 10/24/96 ..................................................... 1,000,000 1,000,000
A-1+ San Antonio Water System Revenue Series 1995 TECP, 3.4%, 8/21/96 ........... 1,500,000 1,500,000
SP1+ State of Texas TRAN, 4.75%, 8/30/96 ........................................ 6,000,000 6,009,325
------------
TOTAL TEXAS ........................................................... 16,549,325
------------
UTAH
A-1+ Salt Lake City Pooled Hospital Financing TECP, 3.2%, 8/8/96 ................ 1,800,000 1,800,000
MIG-1 Utah State Housing Finance Agency Single#Family Mortgage Bond Series#D
VRDN, 3.4%, 7/1/16 ....................................................... 400,000 400,000
------------
TOTAL UTAH ............................................................ 2,200,000
------------
VERMONT
SS&C Vermont Industrial Development Vermont Marble Company Series 1984
VRDN, 4.21%, 12/1/04 ..................................................... 3,835,000 3,835,000
MIG-1 Vermont Student Assistance Corporation VRDN, 3.65%, 1/1/04 ................. 2,600,000 2,600,000
------------
TOTAL VERMONT ......................................................... 6,435,000
------------
VIRGINIA
MIG-1 Louisa Pollution Control Revenue Virginia Electric Power Company
Series 1987 TECP, 3.6%, 9/19/96 .......................................... 1,000,000 1,000,000
------------
WASHINGTON
A-1+ Washington Public Power Supply Authority Projects #1 & #3 Series 1993
VRDN, 3.300%, 7/1/18 ..................................................... 1,895,000 1,895,000
------------
WYOMING
P-1 Uinta County Pollution Control Revenue VRDN, 3.5%, 8/15/20 ................. 700,000 700,000
P-1 Uinta County Pollution Control, 3.5%, 12/1/22 .............................. 2,000,000 2,000,000
------------
TOTAL WYOMING ......................................................... 2,700,000
------------
TOTAL INVESTMENTS--100.8% (COST $134,859,843)** ........................................ 134,859,843
------------
OTHER ASSETS AND LIABILITIES--(0.8)%
Cash ............................................................................................. $ 419,029
Receivable for Investments sold .................................................................. 100,000
Receivable for capital stock sold ................................................................ 7,534
Interest receivable and other assets ............................................................. 1,386,048
Dividend payable ................................................................................. (309,526)
Payable for investments purchased ................................................................ (2,514,600)
Payable for capital stock redeemed ............................................................... (10,000)
Management fee payable (note 4) .................................................................. (46,088)
Accrued expenses (note 4) ........................................................................ (115,402)
------------
(1,083,005)
------------
NET ASSETS - 100.0%
Applicable to 133,776,838 shares of $.001 par value Capital Stock outstanding;
1,000,000 shares authorized (note 7) ........................................................... $133,776,838
============
NET ASSET VALUE PER SHARE ........................................................................ $ 1.00
============
</TABLE>
See notes to financial statements.
11
<PAGE>
MANAGED TAX-FREE FUND (CONTINUED)
** Cost for federal income tax purposes.
- - --------------------------------------------------------------------------------
<TABLE>
* CREDIT RATINGS (UNAUDITED) SHOWN ARE EITHER BY MOODY'S INVESTORS SERVICE,
INC., STANDARD & POOR'S CORPORATION OR SCUDDER, STEVENS & CLARK
<CAPTION>
STANDARD &
MOODY'S POOR'S
<S> <C> <C>
P-1 A-1/A-1+ Commercial paper of the highest quality.
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
OP Security with an "optional put" feature; date securities are of comparable quality to rated
shown represents the earliest date the acceptable notes on a cash flow basis and are of appropriate
security may be redeemed or the interest rate credit for the standards required by the Fund's
will be reset if the security is not redeemed investment objective.
RAN Revenue Anticipation Note TOB Tender Option Bond is a security with a periodic
"put feature"
TAN Tax Anticipation Note TRAN Tax Revenue Anticipation Note
</TABLE>
See notes to financial statements.
12
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1996
<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 ........................ $1,644,678 $268,100 $10,377,891 $2,672,730
---------- -------- ----------- ----------
EXPENSES (Note 2c):
Management fee (note 4) ................ 123,064 21,393 768,151 297,307
Shareholder services (notes 4 and 5) ... 72,223 23,625 322,150 172,877
Directors' fees and expenses (note 4) .. 4,922 3,990 6,675 6,744
Custodian and accounting fees (note 4) . 24,304 17,461 51,927 35,101
Professional services .................. 9,706 3,266 33,929 15,706
Reports to shareholders ................ 1,474 390 7,288 3,253
Amortization of organization expenses
(Note 2e) ........................... -- 1,186 -- --
Registration fees ...................... 10,607 8,183 16,402 12,971
Miscellaneous ......................... 6,189 3,668 11,372 6,411
---------- -------- ----------- ----------
Total expenses before reductions ...... 252,489 83,162 1,217,894 550,370
Expense reductions (note 4) ............ (83,272) (43,055) (161,229) --
---------- -------- ----------- ----------
Expenses, net ........................ 169,217 40,107 1,056,665 550,370
---------- -------- ----------- ----------
NET INVESTMENT INCOME AND INCREASE IN
NET ASSETS FROM OPERATIONS ........... $1,475,461 $227,993 $ 9,321,226 $2,122,360
========== ======== =========== ==========
</TABLE>
See notes to financial statements.
13
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
<CAPTION>
MANAGED GOVERNMENT MANAGED FEDERAL
SECURITIES FUND SECURITIES FUND
----------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/96 12/31/95 6/30/96 12/31/95
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and increase
in net assets from operations ..... $ 1,475,461 $ 3,681,354 $ 227,993 $ 507,232
Dividends (notes 2b and 2d) ......... (1,475,461) (3,681,354) (227,993) (507,232)
------------- ------------- ------------ ------------
-- -- -- --
------------- ------------- ------------ ------------
CAPITAL STOCK TRANSACTIONS (NOTE 7):
Proceeds from sale of shares ........ 191,245,781 229,035,361 14,302,444 15,962,430
Net asset value of shares issued in
reinvestment of dividends ......... 1,011,582 2,961,712 191,220 443,321
------------- ------------- ------------ ------------
192,257,363 231,997,073 14,493,664 16,405,751
Cost of shares redeemed ............. (167,698,142) (250,578,326) (11,822,513) (20,579,055)
------------- ------------- ------------ ------------
Increase (decrease) in net assets
from capital stock transactions ... 24,559,221 (18,581,253) 2,671,151 (4,173,304)
------------- ------------- ------------ ------------
Total increase (decrease) in net assets 24,559,221 (18,581,253) 2,671,151 (4,173,304)
NET ASSETS:
Beginning of period ................... 49,975,724 68,556,977 8,631,923 12,805,227
------------- ------------- ------------ ------------
End of period ......................... $ 74,534,945 $ 49,975,724 $ 11,303,074 $ 8,631,923
============= ============= ============ ============
</TABLE>
See notes to financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
MANAGED CASH FUND MANAGED TAX-FREE FUND
----------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/96 12/31/95 6/30/96 12/31/95
- - --------------- --------------- --------------- -------------
<C> <C> <C> <C>
$ 9,321,226 $ 20,682,893 $ 2,122,360 $ 4,313,224
(9,321,226) (20,682,893) (2,122,360) (4,313,224)
- - --------------- --------------- --------------- -------------
-- -- -- --
- - --------------- --------------- --------------- -------------
1,255,496,596 2,168,020,988 335,974,818 561,389,929
5,655,232 11,385,987 1,275,457 2,171,918
- - --------------- --------------- --------------- -------------
1,261,151,828 2,179,406,975 337,250,275 563,561,847
(1,296,013,336) (2,174,994,810) (341,865,486) (549,766,530)
- - --------------- --------------- --------------- -------------
(34,861,508) 4,412,165 (4,615,211) 13,795,317
- - --------------- --------------- --------------- -------------
(34,861,508) 4,412,165 (4,615,211) 13,795,317
371,519,095 367,106,930 138,392,049 124,596,732
- - --------------- --------------- --------------- -------------
$ 336,657,587 $ 371,519,095 $ 133,776,838 $ 138,392,049
=============== =============== =============== =============
</TABLE>
See notes to financial statements.
15
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
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
OPERATING INVESTMENT
NET ASSET NET ASSET EXPENSES INCOME NET ASSETS
VALUE, AT NET VALUE, AT TO AVERAGE TO AVERAGE END OF
BEGINNING INVESTMENT DIVIDENDS END TOTAL DAILY DAILY PERIOD
PERIOD OF PERIOD INCOME PAID OF PERIOD RETURN NET ASSETS(A) NET ASSETS (MILLIONS)
- - ------------------------ --------- ------ ---- -------- ------ ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MANAGED GOVERNMENT
SECURITIES FUND
Six months ended 6/30/96 ..... $1.00 $.024 $(.024) $1.00 2.41%(c)* 0.55%(b) 4.80%(b) $ 75
Year ended 12/31/95 .......... 1.00 .054 (.054) 1.00 5.49* 0.55 5.36 50
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
MANAGED FEDERAL
SECURITIES FUND
Six months ended 6/30/96 ..... 1.00 .021 (.021) 1.00 2.14(c)* 0.75(b) 4.26(b) 11
Year ended 12/31/95 .......... 1.00 .047 (.047) 1.00 4.80* 0.75 4.69 9
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(d) to 12/31/91 ....... 1.00 .021 (.021) 1.00 4.80(b)* 0.52(b) 4.67(b) 14
MANAGED CASH FUND
Six months ended 6/30/96 ..... 1.00 .024 (.024) 1.00 2.44(c)* 0.55(b) 4.85(b) 337
Year ended 12/31/95 .......... 1.00 .054 (.054) 1.00 5.57* 0.55 5.45 372
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
MANAGED TAX-FREE FUND
Six months ended 6/30/96 ..... 1.00 .014 (.014) 1.00 1.42(c) 0.74(b) 2.86(b) 134
Year ended 12/31/95 .......... 1.00 .032 (.032) 1.00 3.30 0.79 3.25 138
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
<FN>
(a) The annualized operating expense ratio including expenses reimbursed,
management fee and other expenses not imposed would have been, for the
Managed Government Securities Fund, Managed Federal Securities Fund and
Managed Cash Fund, 0.82%, 1.55% and 0.63%, for the six months ended June
30, 1996, respectively; 0.86%, 1.43% and 0.68%, for the year ended December
31, 1995, respectively; 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.
(b) Annualized
(c) Not annualized
(D) Date commenced operations.
* Total returns are higher, for the periods indicated, due to the maintenance
of the Fund's expenses.
</FN>
</TABLE>
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 Subchapter M of 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) Organization Costs--Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are being
amortized on a straight-line basis over a five-year period.
(f) 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
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
management fee until October 31, 1996, to the extent necessary so that expenses
of each of the Managed Government Securities Fund, Managed Federal Securities
Fund, and the Managed Cash Fund do not exceed 0.55%, 0.75%, and 0.55%,
respectively, of the average daily net assets of each Fund. Further, due to the
limitation of such Agreement, the Adviser's reimbursement payable for the six
months ended June 30, 1996 amounted to $8,222 for the Managed Federal Securities
Fund.
For the six months ended June 30, 1996, Scudder did not impose fees
amounting to $83,272, $21,393 and $161,229 on the Managed Government Securities
Fund, the Managed Federal Securities Fund and the Managed Cash Fund,
respectively.
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.
Scudder Service Corporation ("SSC"), a subsidiary of Scudder, is the
Company's shareholder service, transfer and dividend disbursing agent. For the
six months ended June 30, 1996, the amount charged to the Company by SSC
aggregated $11,611 for the Managed Government Securities Fund, $11,611 for the
Managed Federal Securities Fund, $33,475 for the Managed Cash Fund, and $11,611
for the Managed Tax-Free Fund, of which $1,833, $1,833, $5,575, and $1,833
respectively, remain unpaid at June 30, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of Scudder, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Funds. For the six months
ended June 30, 1996, the amount charged to the Funds by SFAC aggregated $15,000
for the Managed Government Securities Fund, $1,560 for the Managed Federal
Securities Fund, $25,048 for the Managed Cash Fund, and $20,256 for the Managed
Tax-Free Fund, of which $5,000, $519, $8,071, and $6,484, respectively, remain
unpaid at June 30, 1996. For the six months ended June 30, 1996, for the Federal
Portfolio, SFAC did not impose fees amounting to $13,440.
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 $212,482, 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 six months ended June 30,
1996, payments by the Funds pursuant to these arrangements aggregated $58,172
for the Managed Government Securities Fund, $11,855 for the Managed Federal
Securities Fund, $278,245 for the Managed Cash Fund and $153,703 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 fund
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.
18
<PAGE>
7. CAPITAL STOCK
At June 30, 1996, the Company had 11,000,000,000 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 $74,460,410, for the Managed Government Securities Fund, $11,291,771
for the Managed Federal Securities Fund, $336,320,929 for the Managed Cash Fund
and $133,643,061 for the Managed Tax-Free Fund.
19
<PAGE>
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 9242
Boston, Massachusetts 02205
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
MID-YEAR REPORT
JUNE 30, 1996
