MANAGED GOVERNMENT SECURITIES FUND
MANAGED CASH FUND
MANAGED TAX-FREE FUND
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT
JUNE 30, 1997
- --------------------------------------------------------------------------------
<PAGE>
Board of Directors
DAVID S. LEE^(1) Chairman of the Board; Managing Director,
Scudder, Stevens & Clark, Inc.
EDGAR R. FIEDLER^(1)(2)(3) Senior Fellow and Economic Counsellor,
The Conference Board, Inc.
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
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
STEPHEN L. AKERS Vice President
K. SUE COTE Vice President
CAROL L. FRANKLIN 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 Secretary
PAMELA A. McGRATH Vice President and Treasurer
2
<PAGE>
Dear Shareholder:
Operated exclusively for institutions and their clients, Scudder Fund, Inc.
provided competitive investment results in the first half of 1997. Scudder Fund,
Inc. includes three separate money market funds -- Managed Government 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 three 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 Tax-Free Fund seeks to provide
income exempt from Federal income tax.
Total net assets for Managed Government Securities Fund, Managed Cash Fund and
Managed Tax-Free Fund were $377 million on June 30, 1997, compared to $625
million at the start of the year. A table showing dividend payments and other
financial information for the six months ended June 30, 1997 is on page 16. This
table also shows dividend payments and financial information for each fund for
the five years ended December 31, 1996. In addition, please see the following
pages for financial statements for the six months ended June 30, 1997, 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>
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4
<PAGE>
Managed Government Securities Fund
Statement of Net Assets (Unaudited)
June 30, 1997
<TABLE>
<CAPTION>
Maturity Pricipal Value
Date Amount (Note 2a)
--------------- --------------- ---------------
<S> <C> <C> <C>
Repurchase Agreements -- 6.8%
State Street Bank & Trust, dated 6/30/97 at 5.6%
(proceeds at maturity $2,086,324) collateralized
by $2,090,000 U.S. Treasury Bond, 6.0%, 8/31/97
(cost $2,086,000) ....................................... 7/1/97 $ 2,086,000 $ 2,086,000
--------------
U.S. Agency Obligations-- 93.6%
Federal Farm Credit Bank Discount Note ..................... 7/1/97 1,500,000 1,500,000
Federal Home Loan Bank Discount Note ....................... 8/8/97 1,500,000 1,491,640
Federal Home Loan Bank Discount Note ....................... 10/3/97 1,700,000 1,675,541
Federal Home Loan Bank Discount Note ....................... 12/10/97 1,000,000 975,295
Federal Home Loan Mortgage Discount Note ................... 7/21/97 1,456,000 1,451,592
Federal Home Loan Mortgage Discount Note ................... 8/12/97 2,000,000 1,987,260
Federal Home Loan Mortgage Discount Note ................... 7/2/97 1,500,000 1,499,774
Federal Home Loan Mortgage Discount Note ................... 7/3/97 2,500,000 2,499,244
Federal National Mortgage Assoc. Discount Note ............. 7/10/97 1,200,000 1,198,431
Federal National Mortgage Assoc. Discount Note ............. 7/14/97 1,000,000 998,050
Federal National Mortgage Assoc. Discount Note ............. 7/23/97 1,500,000 1,495,059
Federal National Mortgage Assoc. Discount Note ............. 8/14/97 1,000,000 993,534
Federal National Mortgage Assoc. Discount Note ............. 8/19/97 2,000,000 1,985,872
Federal National Mortgage Assoc. Discount Note ............. 9/10/97 1,000,000 989,232
Federal National Mortgage Assoc. Discount Note ............. 11/7/97 1,000,000 980,471
Federal National Mortgage Assoc. Discount Note ............. 12/8/97 2,000,000 1,951,378
Federal National Mortgage Assoc. Floater 5.29% ............. 9/14/97* 5,000,000 5,000,000
--------------
Total U.S. Agency Obligations (cost $28,672,373) .............................................. 28,672,373
--------------
Total Investments -- 100.4% (cost $30,758,373)** .............................................. 30,758,373
--------------
Other Assets and Liabilities -- (0.4%)
Cash .......................................................................................... 616
Receivable for capital stock sold ............................................................. 21,000
Interest receivable and other assets .......................................................... 59,312
Reimbursement from adviser .................................................................... 31,014
Dividend payable .............................................................................. (139,534)
Accrued expenses (note 4) ..................................................................... (102,652)
--------------
(130,244)
--------------
</TABLE>
See notes to financial statements.
5
<PAGE>
Managed Government Securities Fund (continued)
<TABLE>
<S> <C>
Net Assets -- 100.0%
Applicable to 30,628,129 shares of $.001 par value Capital Stock outstanding;
3,000,000,000 shares authorized (note 7) .................................................... $ 30,628,129
===============
Net Asset Value Per Share ...................................................................... $1.00
=========
</TABLE>
* Date of next interest rate change.
** Cost for federal income tax purposes.
See notes to financial statements.
6
<PAGE>
Managed Cash Fund
Statement of Net Assets (Unaudited)
June 30, 1997
<TABLE>
<CAPTION>
Maturity Pricipal Value
Date Amount (Note 2a)
--------------- --------------- ---------------
<S> <C> <C> <C>
Certificates of Deposit -- 20.9%
ABN-AMRO Bank NV YCD 5.68% ................................ 7/22/97 $ 13,000,000 $ 13,000,061
Chase Bank Delaware CD 5.81% .............................. 12/5/97 10,000,000 10,000,000
Sanwa Bank NY YCD 5.79% ................................... 9/9/97 10,000,000 10,000,348
Societe Generale YCD 5.75% ................................ 1/5/98 10,000,000 9,993,944
Bank of Tokyo/Mitsubishi YCD 5.84% ........................ 7/2/97 9,000,000 9,000,033
Bank of Tokyo/Mitsubishi .................................. 7/18/97 5,000,000 4,986,754
--------------
Total Certificates of Deposit (cost $56,981,140) ................................................ 56,981,140
--------------
Commercial Paper -- 49.2%
Ameritech Corp. CP ........................................ 8/6/97 10,000,000 9,944,150
Bank of Nova Scotia CP .................................... 8/26/97 10,000,000 9,913,356
Barclays US Funding CP .................................... 12/22/97 12,000,000 11,679,260
Centric Funding Corp CP ................................... 8/19/97 10,000,000 9,923,778
Ciesco, L.P. CP ........................................... 7/17/97 10,000,000 9,975,244
Credit Agricole CP ........................................ 7/17/97 10,000,000 9,975,822
FCAR Owner Trust I CP ..................................... 7/16/97 13,000,000 12,969,992
General Electric CAP Corp. CP ............................. 12/10/97 10,000,000 9,748,450
Morgan (JP) & Company CP .................................. 12/1/97 10,000,000 9,762,850
Pitney Bowes CR Corp CP ................................... 9/17/97 8,000,000 7,902,240
Prudential Funding CP ..................................... 8/19/97 10,000,000 9,924,458
Rincon Securities Inc. CP ................................. 8/6/97 11,000,000 10,939,060
Dai Ichi Kangyo Bank BA ................................... 7/1/97 8,400,000 8,400,000
Dai Ichi Kangyo Bank BA ................................... 7/1/97 3,200,000 3,200,000
--------------
Total Commercial Paper (cost $134,258,660) ....................................................... 134,258,660
--------------
Corporate Bond -- 23.0%
Bank One Columbus BK NT 5.69% ............................. 7/1/97* 10,000,000 9,995,437
Bankers Trust Co F/R MTN 5.71% ............................ 7/1/97* 10,000,000 10,000,000
MMR Funding 5.63% ......................................... 7/3/97* 5,500,000 5,500,000
Student Loan Marketing Assoc. 5.24% ....................... 7/1/97* 15,000,000 15,000,000
Student Loan Marketing Assoc. 5.26% ....................... 7/1/97* 22,400,000 22,397,122
--------------
Total Corporate Bond (cost $62,892,559) .......................................................... 62,892,559
--------------
Repurchase Agreements -- 6.5%
State Street Bank & Trust, dated 6/30/97 at 5.60%
(proceeds at maturity $17,707,754) collateralized
by $17,705,000 U.S. Treasury Bond, 6.0%, 8/31/97
(cost $17,705,000) ..................................... 7/1/97 17,705,000 17,705,000
--------------
Total Investments -- 99.6% (cost $271,837,359)** ................................................. 271,837,359
--------------
</TABLE>
See notes to financial statements.
7
<PAGE>
Managed Cash Fund (continued)
<TABLE>
<S> <C>
Other Assets and Liabilities -- 0.4%
Receivable for capital stock sold .............................................................. 1,586,038
Interest receivable and other assets ........................................................... 1,210,279
Cash ........................................................................................... 536
Dividend payable ............................................................................... (1,166,433)
Payable for capital stock redeemed ............................................................. (370,841)
Management fee payable (note 4) ................................................................ (6,433)
Accrued expenses (note 4) ...................................................................... (184,504)
--------------
1,068,642
--------------
Net Assets -- 100.0%
Applicable to 272,906,001 shares of $.001 par value Capital Stock outstanding;
3,000,000,000 shares authorized (note 7) .................................................... $ 272,906,001
==============
Net Asset Value Per Share ...................................................................... $1.00
=======
</TABLE>
* Date of next interest rate change.
** Cost for federal income tax purposes.
See notes to financial statements.
8
<PAGE>
Managed Tax-Free Fund
Statement of Net Assets (Unaudited)
June 30, 1997
<TABLE>
<CAPTION>
Credit Pricipal Value
Rating* Short-Term Municipal Investments - 97.0% Amount (Note 2a)
- -------- ----------- -----------
<S> <C> <C> <C>
Arizona
A1 Maricopa County Arizona Pollution Control Revenue, Palos Verde Project,
Series 1985 F, TECP, 3.4%, 7/17/97 ............................................... 2,100,000 2,100,000
MIG1 Pima County Industrial Development Authority Series 1985 SFE
Technologies, VRDN, 4.625%, 12/1/05 ............................................... 1,900,000 1,900,000
A1+ Pinal County, AZ, Pollution Control Revenue (Magma Copper), Series 1984,
Daily Demand Note, 4.0%, 12/1/09 ................................................. 400,000 400,000
----------
Total Arizona ............................................................... 4,400,000
----------
California
A1 Corona Multi-Family Housing Revenue, 4.25%, 2/1/23 .................................. 2,000,000 2,000,000
A1+ Huntington Beach, CA, Multi-Family Housing Revenue, River Meadows
Apartments, Series B, Weekly Demand Bonds, 4%,10/1/05 ............................ 3,800,000 3,800,000
SP1+ Los Angeles County, CA, Tax and Revenue Anticipation Notes, Series
1997 A, 4.5%, 6/30/98 ............................................................ 1,000,000 1,006,240
SS&C San Marcos, CA, Redevelopment Agency, Multi-Family Rental Housing
Agency, Series 1985, Weekly Demand Note, 4.25%, 6/1/05 ........................... 1,900,000 1,900,000
----------
Total California ............................................................ 8,706,240
----------
District Of Columbia
A1+ District of Columbia, General Obligation, Series B1, Daily Demand Note,
4.1%, 6/1/03 ..................................................................... 300,000 300,000
----------
Florida
A1+ Dade County, FL, Water and Sewer System Revenue, Series 1994, Weekly
Demand Note, FGIC Insured, 4.15%, 10/5/22 ........................................ 2,000,000 2,000,000
MIG1 Jackonsville Florida Pollution Control Revenue, Florida Power and Light,
Series 1994, TECP, 3.7%, 9/16/97 ................................................. 1,000,000 1,000,000
A1 Sarasota County, Florida Public Hospital District, Sarasota Memorial
Hospital Series 1993a TECP, 3.75%, 8/8/97 ........................................ 2,500,000 2,500,000
----------
Total Florida ............................................................... 5,500,000
----------
Georgia
A1+ Burke County, Georgia, Development Authority, Pollution Control Revenue,
Oglethorpe Power, Weekly Demand Bonds, 4.15%, 1/16/16 ............................ 1,200,000 1,200,000
A1+ Turner County Industrial Development Revenue Coats & Clark Inc., Series
1984, VRDN, 3.85%, 10/1/98 ....................................................... 1,600,000 1,600,000
----------
Total Georgia ............................................................... 2,800,000
----------
Illinois
A1+ O'Hare International Airport, General Airport Second Lien,
Series A, Weekly Demand Note, 4.2%, 1/1/15 ....................................... 1,500,000 1,500,000
----------
Indiana
A1+ City of Sullivan, National Rural Utilities Cooperative Finance Corp.,
Hoosier Energy Rural Energy, 3.65%, 8/26/97 ...................................... 1,000,000 1,000,000
MIG1 Indiana Bond Bank, Advance Funding Notes, Series 1997 A-2, 4.25%,
1/21/98 .......................................................................... 1,000,000 1,002,970
A1 Rockport, Indiana Pollution Control Revenue AEP Generating Co., Project B,
Daily Demand Note, 4.05%, 7/1/25 ................................................. 800,000 800,000
----------
Total Indiana ............................................................... 2,802,970
----------
</TABLE>
See notes to financial statements.
9
<PAGE>
Managed Tax-Free Fund (continued)
<TABLE>
<CAPTION>
Credit Pricipal Value
Rating* Amount (Note 2a)
- -------- ----------- -----------
<S> <C> <C> <C>
Kansas
A1+ Burlington Kansas Power and Light Pollution Control Revenue, Series
1987 B, TECP, 3.8%, 7/24/97 ...................................................... 2,000,000 2,000,000
----------
Kentucky
MIG1 Mayfield, KY, Multi-City Lease Revenue Kentucky League of Cities
Funding Trust, Weekly Demand Note, Series 1996, 4.3%, 7/1/26 ..................... 1,000,000 1,000,000
----------
Louisiana
P1 West Baton Rouge, Louisiana Industrial District #3, Series 1987, TECP,
3.65%, 7/9/97 .................................................................... 1,400,000 1,400,000
----------
Massachusetts
SP1 Massachusetts Bay Transportation Authority, MA, Series B, 4.75%,
9/5/97 ........................................................................... 1,000,000 1,001,391
SP1+ Massachusetts Health & Educational Facilities Authority, Series D, Weekly
Demand Note, MBIA Insured, 3.9%, 1/1/35 .......................................... 500,000 500,000
----------
Total Massachusetts ......................................................... 1,501,391
----------
Missouri
SP1+ Missouri HEFA School District Advance Funding Notes, Series 1996 C,
Kansas City School District, 4.5%, 9/8/97 ........................................ 1,000,000 1,001,093
P1 St. Louis Industrial Development Authority Kirkwood Project Series 1985,
VRDN, 4.25%, 12/1/15 ............................................................. 1,000,000 1,000,000
----------
Total Missouri .............................................................. 2,001,093
----------
Nebraska
P1 Nebraska Public Power District (All Districts), Series 1996, TECP, 3.7%,
8/26/97 .......................................................................... 2,060,000 2,060,000
----------
New Mexico
A1+ Albuquerque, NM, Gross Receipts/Lodgers Tax, Series 1991, Weekly
Demand Note, 4.20%, 7/1/22 ....................................................... 2,000,000 2,000,000
SS&C Belen Industrial Revenue Refunding Bond United Desiccants Project,
VRDN, 4.35%, 4/1/00 .............................................................. 700,000 700,000
----------
Total New Mexico ............................................................ 2,700,000
----------
New York
A1+ Municipal Assistance Corp For New York City, Series K1, Weekly Demand
Note, 4.05%, 7/1/08 .............................................................. 1,000,000 1,000,000
MIG1 Nassau County, NY, General Obligation Notes, Series 1996, 4.25%,
8/15/97 .......................................................................... 1,000,000 1,000,837
----------
Total New York .............................................................. 2,000,837
----------
Ohio
MIG1 Cuyahoga County, OH, Health & Education, University Hospital of
Cleveland, Daily Demand Note, 4.20%, 1/1/16 ...................................... 1,600,000 1,600,000
A1+ Ohio State University Revenue, General Receipts Bonds, Weekly Variable
Rate Demand Bond, Series 1986 B, 4.15%, 12/1/06 .................................. 1,600,000 1,600,000
----------
Total Ohio .................................................................. 3,200,000
----------
Pennsylvania
MIG1 Delaware Valley Finance Authority, 4.15%, 12/1/20 ................................... 1,600,000 1,600,000
</TABLE>
See notes to financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
Credit Pricipal Value
Rating* Amount (Note 2a)
- -------- ----------- -----------
<S> <C> <C> <C>
SS&C Elk County Pennsylvania Industrial Development Authority, Series 1989,
Weekly Demand Note, 4.41%, 3/1/04 ................................................ 750,000 750,000
SS&C Philadelphia, PA, School District Tax and Revenue Anticipation Notes,
Series 1993, MBIA Insured, 4.5%, 7/1/98 .......................................... 1,000,000 1,005,824
SP1+ Temple University of the Commonwealth, PA, Higher Education, Series
1997, FGIC Insured, 4.75%, 5/18/98 ............................................... 2,000,000 2,014,374
----------
Total Pennsylvania .......................................................... 5,370,198
----------
South Carolina
MIG1 South Carolina Jobs-Economic Development Authority, Franciscan Sisters
of the Poor, St. Francis Hospital, Variable Rate Daily Demand Note,
4.1%, 7/1/22 ..................................................................... 1,990,000 1,990,000
A1 South Carolina Public Service Authority, Series 1997, TECP, 3.45%,
7/22/97 .......................................................................... 1,000,000 1,000,000
----------
Total South Carolina ........................................................ 2,990,000
----------
Tennessee
MIG1 Clarksville, TN, Public Building Authority Pooled Financing, Series 1990,
Weekly Demand Note, MBIA Insured, 4.15%, 7/1/13 .................................. 2,585,000 2,585,000
A1+ Metropolitan Nashville Airport Authority, TN, Special Facilities Revenue,
American Airlines, Variable Rate Demand Note, 4.1%, 10/1/12 ...................... 600,000 600,000
----------
Total Tennessee ............................................................. 3,185,000
----------
Texas
A1+ Port Development Corp., TX, Marine Terminal Refunding Revenue, Stolt
Terminals, Series 1989, Weekly Demand Note, 4.2%, 1/15/14 ........................ 1,500,000 1,500,000
A1+ San Antonio, Texas Water System Revenue, Series 1995, TECP, 3.65%,
9/19/97 .......................................................................... 1,500,000 1,500,000
A1+ San Antonio, TX, Electric & Gas City Public Services, Series 1995 A,
TECP, 3.7%, 10/16/97 ............................................................. 1,000,000 1,000,000
A1+ San Antonio, TX, Electric & Gas City Public Services, TECP, 3.6%,
10/9/97 .......................................................................... 1,000,000 1,000,000
SS&C San Antonio, TX, Industrial Development Authority, River Center
Associates Project, Weekly Demand Note, 4.25%, 12/1/12 ........................... 1,000,000 1,000,000
MIG1 State of Texas Tax and Revenue Anticipation Notes Series 1996, 4.75%,
8/29/97 .......................................................................... 1,000,000 1,001,279
SP1+ Texas Tax and Revenue Anticipation Notes, Series 1996, 4.75%,
8/29/97 .......................................................................... 2,000,000 2,003,890
----------
Total Texas ................................................................. 9,005,169
----------
Vermont
SS&C Vermont Industrial Development, Vermont Marble Company Series 1984
VRDN, 4.42%, 12/1/04 ............................................................. 3,575,000 3,575,000
MIG1 Vermont Student Assistance Corporation, VRDN, 3.8%, 1/1/04 .......................... 2,500,000 2,500,000
----------
Total Vermont ............................................................... 6,075,000
----------
Virginia
MIG1 Town Of Louisa, Virginia Pollution Control Revenue, Virginia Electric Power
Company 1987, TECP, 3.8%, 8/13/97 ................................................ 1,000,000 1,000,000
----------
Total Investment Portfolio -- 97.0% (Cost $71,497,898)** ............................ 71,497,898
----------
</TABLE>
See notes to financial statements.
11
<PAGE>
Managed Tax-Free Fund (continued)
<TABLE>
<S> <C>
Other Assets and Liabilities -- 3.0%
Cash ........................................................................................................ 2,699,629
Receivable for investments sold ............................................................................. 210,000
Receivable for capital stock sold ........................................................................... 8,362
Interest receivable and other assets ........................................................................ 579,804
Dividend payable ............................................................................................ (184,805)
Payable for investments purchased ........................................................................... (1,006,240)
Payable for capital stock redeemed .......................................................................... (10,156)
Management fee payable (note 4) ............................................................................. (25,226)
Accrued expenses (note 4) ................................................................................... (108,501)
-------------
2,162,867
-------------
Net Assets -- 100.0%
Applicable to 73,660,765 shares of $.001 par value Capital Stock outstanding;
1,000,000,000 shares authorized (note 7) .................................................................... $ 73,660,765
=============
Net Asset Value Per Share ................................................................................... $1.00
=======
</TABLE>
** Cost for federal income tax purposes.
* Credit ratings (unaudited) shown are either by Moody's Investors Service,
Inc., Standard & Poor's Corporation or Scudder, Stevens & Clark
Standard &
Moody's Poor's
P1 A1/A1+ Commercial paper of the highest quality.
MIG1 SP1/SP1+ Short-term tax-exempt instrument of the best
quality with strong protection.
VMIG1 Short-term tax-exempt variable rate demand
instrument of the best quality with strong
protection.
Abbreviations used in the statement:
TECP Tax Exempt Commercial Paper VRDN Variable Rate Demand Note
GO General Obligation RAN Revenue Anticipation Note
TAN Tax Anticipation Note TRAN Tax Revenue Anticipation Note
SS&C These securities are not rated
by either Moody's or Standard
& Poor's. Scudder has
determined that these
securities are of comparable
quality to rated acceptable
notes on a cash flow basis and
are of appropriate credit for
the standards required by the
Fund's investment objective.
See notes to financial statements.
12
<PAGE>
Statement of Operations (Unaudited)
For the six months ended June 30, 1997
<TABLE>
<CAPTION>
Managed
Government Managed Managed
Securities Cash Tax-Free
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
Investment Income:
Interest Income ................................. $ 891,831 $ 9,259,592 $ 1,936,092
------------ ------------ ------------
Expenses:
Management fee .................................. 65,977 675,461 217,261
Shareholder services ............................ 43,589 267,275 126,675
Directors' fees and expenses .................... 5,453 7,400 7,008
Custodian and accounting fees ................... 21,811 44,812 20,502
Auditing ........................................ 3,069 12,118 (897)
Professional services ........................... 31,033 44,007 7,118
Reports to shareholders ......................... 1,132 9,373 2,419
Interest expense ................................ -- -- 12,470
Registration fees ............................... 11,399 22,739 13,166
Miscellaneous ................................... 4,176 7,113 2,497
------------ ------------ ------------
Total expenses before reductions ................ 187,639 1,090,298 408,219
Expense reductions .............................. (96,991) (174,274) --
------------ ------------ ------------
Expenses, net ................................ 90,648 916,024 408,219
------------ ------------ ------------
Net investment income and increase in net
assets from operations ....................... $ 801,183 $ 8,343,568 $ 1,527,873
============ ============ ============
</TABLE>
See notes to financial statements.
13
<PAGE>
Statements of Changes in Net Assets
As of June 30, 1997
Managed Government
Securities Fund
--------------------------------
Six Months
Ended June 30, Year Ended
1997 December 31,
(Unaudited) 1996
--------------- --------------
Increase (Decrease) in Net Assets:
Operations:
Net investment income and increase
in net assets from operations ....... $ 801,183 $ 3,380,075
Dividends (notes 2b and 2d) ............ (801,183) (3,380,075)
--------------- --------------
-- --
--------------- --------------
Capital Stock Transactions (note 7):
Proceeds from sale of shares ........... 70,150,772 475,466,734
Net asset value of shares issued in
reinvestment of dividends ........... 199,448 2,288,409
--------------- --------------
70,350,220 477,755,143
Cost of shares redeemed ................ (67,640,378) (499,812,580)
--------------- --------------
Increase (decrease) in net assets
from capital stock transactions ..... 2,709,842 (22,057,437)
--------------- --------------
Total increase (decrease) in net assets ... 2,709,842 (22,057,437)
Net Assets:
Beginning of year ......................... 27,918,287 49,975,724
--------------- --------------
End of year ............................... $ 30,628,129 $ 27,918,287
=============== ==============
See notes to financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
Managed Cash Fund Managed Tax-Free Fund
-------------------------------- --------------------------------
Six Months Six Months
Ended June 30, Year Ended Ended June 30, Year Ended
1997 December 31, 1997 December 31,
(Unaudited) 1996 (Unaudited) 1996
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income and increase
in net assets from operations ....... $ 8,343,568 $ 18,268,673 $ 1,527,873 $ 4,176,664
Dividends (notes 2b and 2d) ............ (8,343,568) (18,268,673) (1,527,873) (4,176,664)
--------------- --------------- --------------- ---------------
-- -- -- --
--------------- --------------- --------------- ---------------
Capital Stock Transactions (note 7):
Proceeds from sale of shares ........... 881,986,044 2,285,419,535 195,341,875 605,388,558
Net asset value of shares issued in
reinvestment of dividends ........... 4,030,760 10,791,498 541,073 2,369,718
--------------- --------------- --------------- ---------------
886,016,804 2,296,211,033 195,882,948 607,758,276
Cost of shares redeemed ................ (1,044,409,078) (2,236,431,853) (287,675,572) (580,696,936)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets
from capital stock transactions ..... (158,392,274) 59,779,180 (91,792,624) 27,061,340
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets ... (158,392,274) 59,779,180 (91,792,624) 27,061,340
Net Assets:
Beginning of year ......................... 431,298,275 371,519,095 165,453,389 138,392,049
--------------- --------------- --------------- ---------------
End of year ............................... $ 272,906,001 $ 431,298,275 $ 73,660,765 $ 165,453,389
=============== =============== =============== ===============
</TABLE>
See notes to financial statements.
15
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance Information derived from the financial
statements.
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Operating Investment
Net Assets Net Assets Expenses Income Net Assets
Value, at Net Value at to average to average End of
Begining Investment Dividends End Total Daily Daily 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
Six months ended 6/30/97**. $ 1.00 $ .024 $ (.024) $ 1.00 2.43%* 0.55% 4.85% $31
Year ended 12/31/96 ....... 1.00 .048 (.048) 1.00 4.91* 0.55 4.81 28
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
Managed Cash Fund
Six months ended 6/30/97**. 1.00 .025 (.025) 1.00 2.48 0.55 4.94 273
Year ended 12/31/96 ....... 1.00 .049 (.049) 1.00 4.97* 0.55 4.86 431
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
Managed Tax-Free Fund
Six months ended 6/30/97**. 1.00 .014 (.014) 1.00 1.40 0.75 2.82 74
Year ended 12/31/96 ....... 1.00 .028 (.028) 1.00 2.88 0.72 2.84 165
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
</TABLE>
(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, and Managed Cash Fund, 1.14% and .65%
for the six-month period ended June 30, 1997, respectively; 0.77%, and
0.62%, for the year ended December 31, 1996, respectively; 0.86%, and 0.68%,
for the year ended December 31, 1995, respectively; 0.84%, and 0.68%, for
the year ended December 31, 1994, respectively; 0.77%, and 0.66%, for the
year ended December 31, 1993, respectively; 0.76%, and 0.64%, for the year
ended December 31, 1992, respectively.
* Total returns are higher, for the periods indicated, due to the maintenance
of the Fund's expenses.
** Unaudited.
16
<PAGE>
Notes To Financial Statements
1. Organization
Scudder Fund, Inc. (the "Company") is an open-end diversified management
investment company which currently includes three active money market investment
portfolios: Managed Government Securities Fund, Managed Cash Fund, and Managed
Tax-Free Fund (collectively, the "Funds"). The Board of Directors of the Company
has approved a multi-class system for each Fund effective July 7, 1997, such
that the following portfolios of the Fund may offer two classes of shares,
Institutional Class and Managed Class for Scudder Tax Free Money Market Series
(formerly known as Managed Tax-Free Fund) and Scudder Government Money Market
Series (formerly known as Managed Government Securities Fund), and the following
may offer three classes of shares, Institutional Class, Managed Class and
Premium Money Market Class for Scudder Money Market Series (formerly known as
Managed Cash Fund).
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) 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.
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 agreed not to impose a portion of its
management
17
<PAGE>
Notes To Financial Statements (continued)
fee until July 6, 1997, 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.
For the six months ended June 30, 1997, Scudder did not impose fees
amounting to $65,977 and $174,274 on the Managed Government Securities Fund and
the Managed Cash Fund, respectively. In addition, Scudder's reimbursement
payable to the Managed Government Fund was $30,013.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close in the fourth quarter of 1997.
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, 1997, the amount charged to the Company by SSC
aggregated $15,714 for the Managed Government Securities Fund, $27,791 for the
Managed Cash Fund, and $15,714 for the Managed Tax-Free Fund, of which $2,619,
$3,169, and $2,619 respectively, remain unpaid at June 30, 1997.
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, 1997, the amount charged to the Funds by SFAC aggregated $15,000
for the Managed Government Securities Fund, $23,030 for the Managed Cash Fund,
and $17,262 for the Managed Tax-Free Fund, of which $2,500, $3,503, and $2,500,
respectively, remain unpaid at June 30, 1997.
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 $215,455, 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, 1997, payments by the Funds pursuant to these arrangements
aggregated $25,605 for the Managed Government Securities Fund, $222,442 for the
Managed Cash Fund and $110,559 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.
7. Capital Stock
At June 30, 1997, 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 have been designated for the Managed Tax-Free Fund. Net
paid in capital in excess of par value was $30,597,501, for the Managed
Government Securities Fund, $272,633,095 for the Managed Cash Fund and
$73,587,104 for the Managed Tax-Free Fund.
18
<PAGE>
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19
<PAGE>
Managed Government
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
Dechert Price & Rhoads
Boston, Massachusetts 02109
-----------------
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 CASH FUND
MANAGED TAX-FREE FUND
SEMIANNUAL REPORT
JUNE 30, 1997
