Scudder
Money Market Series:
Scudder Premium Money
Market Shares
Scudder Prime Reserve
Money Market Shares
Annual Report
May 31, 1999
No-Load Funds
No-load (no sales charges) mutual fund portfolios seeking to provide as high a
level of current income as is consistent with its investment policies and with
preservation of capital and liquidity.
SCUDDER
<PAGE>
Scudder Premium Money Market Shares
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Date of Inception: 7/7/97 Total Net Assets as of 5/31/99: $936.08 million Ticker Symbol: SPMXX
- ----------------------------------------------------------------------------------------------------------
</TABLE>
o Scudder Premium Money Market Shares' fiscal year end has changed from
December 31 to May 31. For its abbreviated fiscal year that began on
January 1, 1999, and ended May 31, 1999, Scudder Premium Money Market
Shares maintained its $1.00 share price and provided a 2.00% total return.
o The Scudder Premium Money Market Shares' 30-day net annualized yield was
4.77% as of May 31, 1999.
Scudder Prime Reserve Money Market Shares
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Date of Inception: 10/15/98 Total Net Assets as of 5/31/99: $33.82 million Ticker Symbol: SCRXX
- ----------------------------------------------------------------------------------------------------------
</TABLE>
o Scudder Prime Reserve Money Market Shares' fiscal year end has changed from
December 31 to May 31. For its abbreviated fiscal year that began on
January 1, 1999, and ended May 31, 1999, Scudder Prime Reserve Money Market
Shares maintained its $1.00 share price and provided a 1.98% total return.
o The Scudder Prime Reserve Money Market Shares' 30-day net annualized yield
was 4.75% as of May 31, 1999.
Table of Contents
3 Letter from the Series' President 22 Report of Independent Accountants
4 Portfolio Management Discussion 23 Tax Information
7 Glossary of Investment Terms 24 Officers and Directors
8 Investment Portfolio 25 Investment Products and Services
12 Financial Statements 26 Scudder Solutions
15 Financial Highlights
19 Notes to Financial Statements
2 - Scudder Money Market Series
<PAGE>
Letter from the Series' President
Dear Shareholders,
We are pleased to present this combined report for Scudder Premium Money
Market Shares and Scudder Prime Reserve Money Market Shares. Both investments
are classes of Scudder Money Market Series (the "Fund"). We have changed the
fiscal year end of the Fund from December 31 to May 31 as part of a larger
effort to create efficiencies and reduce the costs of producing Scudder fund
regulatory materials such as fund reports and prospectuses. Going forward, you
will receive regular reports following the Fund's annual and semiannual periods
ending in May and November.
During a period of increased volatility for the financial markets, Scudder
Premium Money Market Shares and Scudder Prime Reserve Money Market Shares
continued to seek a stable $1.00 share price and competitive money market rates
for their investors. A "flight to quality" during much of the period that
spurred a large number of investors to turn to money market instruments and
tended to depress short-term interest rates has subsided. This is indicated to
us by the spread between the Fed Funds rate and the 90-day Treasury bill rate:
As wide as one and a half percentage points in mid-October, the spread closed to
a tenth of a percentage point as of May 31. Please read the Portfolio Management
Discussion beginning on page 4 for additional information concerning the
investment environment, strategy, and outlook for the Funds.
For those interested in new Scudder products, we are pleased to introduce
Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both funds are
managed with the goal of providing long-term outperformance compared to their
benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
Please call a Scudder Investor Information representative at 1-800-225-2470
if you have questions about your Fund. Page 27 provides more information on how
to contact us. Thank you for choosing Scudder to help meet your investment
needs.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder Money Market Series
3 - Scudder Money Market Series
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
Through a period that included a massive "flight to quality," shifting interest
rate stances by the Federal Reserve, a rising but volatile U.S. stock market,
and a robust U.S. economy, Scudder Premium Money Market Shares and Scudder Prime
Reserve Money Market Shares (both are classes of Scudder Money Market Series,
the "Fund") provided shareholders with a stable $1.00 share price and a
competitive yield during the Fund's abbreviated annual period ended May 31,
1999. The 30-day net annualized yield of Scudder Premium Money Market Shares
(investment minimum $25,000) was 4.77% as of May 31. Scudder Prime Reserve Money
Market Shares (investment minimum $10,000) posted a 4.75% 30-day net annualized
yield as of May 31. For the Fund's abbreviated annual period that began January
1, 1999, and ended May 31, 1999, Scudder Premium Money Market Shares posted a
2.00% total return and Scudder Prime Reserve Money Market Shares provided a
1.98% total return.
The Markets Settle Down
Market turmoil hit a peak in the wake of the Russian currency devaluation late
last summer, followed by the near collapse of the Long Term Capital Management
hedge fund. Volatility in the U.S. stock market increased greatly while a
massive reallocation to U.S. Treasury bonds and money market instruments led to
significantly lower bond and money market yields. The Federal Reserve's three
interest rate cuts during the third and fourth quarters of 1998 helped to
gradually restore market stability.
During this period, the U.S. economy continued to grow beyond all expectations,
with a dramatic 6% annualized increase in GDP for the fourth quarter of 1998 and
a strong start in 1999 that seemed to assure at least 4% GDP growth this year.
Reflecting a healthy economy and investor expectations for continued growth, the
Dow Jones average reached 10,560 by the close of the Fund's fiscal year. At the
same time, the Federal Reserve was preparing to nudge interest rates higher
(after the bond market had already done so) in an effort to head off
inflationary pressures. The credit concerns that drove so much investor activity
in late 1998 had gradually subsided.
A Conservative Strategy
Over the Fund's abbreviated fiscal year, we took a "neutral" stance, and
refrained from extending the Fund's average maturity because we believed that
money market yields at the longer end of our acceptable maturity range did not
offer attractive value. The Fund's strategy has been to wait until money market
yields increased sufficiently in order to make the additional risk of extending
maturity worthwhile. The average maturity of the Fund was 38 days as of May 31,
1999.
As part of its long-term policy, the Fund invests only in first-tier debt
instruments. Because of the increased level of volatility and activity in the
markets, we placed an even greater emphasis on the highest quality money market
securities during the period. Over its abbreviated fiscal year, the Fund
maintained investments in a variety of money market instruments, including
commercial paper, variable- and floating-rate securities, U.S. government agency
4 - Scudder Money Market Series
<PAGE>
obligations, certificates of deposit, and repurchase agreements.
We maintained an overweight position in commercial paper during the period
because we believe it offered the most attractive value and some of the highest
money market yields available. As of May 31, commercial paper represented 60% of
the Fund's portfolio. The Fund's second largest position, variable- and
floating-rate securities (22%), was attractive because of these securities'
longer maturities, their high correlation with short-term interest rates, and
their indexing features. Indexing means that the interest rate of these
securities is tied to another rate such as the prime lending rate, and is
adjusted up or down when the base rate changes. Variable-rate securities
typically hold an incremental yield advantage over fixed-rate issues that mature
in 30 days.
Outlook
In light of recent increases in short-term interest rates -- including an
increase in the Federal Funds target rate following the close of the period -- a
long-predicted slowdown in U.S. economic activity seems more likely to occur in
1999. At the same time, we expect that inflation will remain restrained, which
should place an upper limit on short-term rate increases. Though we plan to
extend the Fund's average maturity when the market offers sufficient value, we
will maintain a cautious approach during the coming months. We will also monitor
the level of worldwide economic activity closely over the remainder of the year.
The United States has been the only significant engine of economic growth for
some time. If the incipient economic recovery in Asia and other parts of the
5 - SCUDDER MONEY MARKET SERIES
<PAGE>
world gathers steam, we will watch for additional upward pressure on inflation
and short-term interest rates and adjust our strategy accordingly.
The Fund's management team will continue to collect and analyze economic data
and carefully monitor the investment climate as we position the Fund for high
current income, share price stability, and liquidity.
Sincerely,
Your Portfolio Management Team
/s/Frank J. Rachwalski, Jr. /s/Jerri I. Cohen
Frank J. Rachwalski, Jr. Jerri I. Cohen
Scudder Money Market Series:
A Team Approach to Investing
Scudder Money Market Series is managed by a team of Scudder Kemper Investments,
Inc. (the "Adviser") professionals, each of whom plays an important role in the
Fund's management process. Team members work together to develop investment
strategies and select securities for the Fund's portfolio. They are supported by
the Adviser's large staff of economists, research analysts, traders, and other
investment specialists who work in our offices across the United States and
abroad. We believe our team approach benefits Fund investors by bringing
together many disciplines and leveraging our extensive resources.
Lead Portfolio Manager Frank J. Rachwalski, Jr. assumed responsibility for
setting the Fund's investment strategy and for overseeing the Fund's day-to-day
management in January 1998. Mr. Rachwalski has been responsible for the trading
and portfolio management of money market funds since joining the Adviser in
1973.
Portfolio Manager Jerri I. Cohen joined the Adviser in 1981 and has 18 years of
investment industry experience. Ms. Cohen joined the team in 1998.
6 - SCUDDER MONEY MARKET SERIES
<PAGE>
Glossary of Investment Terms
CERTIFICATE OF DEPOSIT A debt instrument issued by a bank that usually pays
interest. Maturities range from a few weeks to several
years, and interest rates reflect competitive forces
in the marketplace.
COMMERCIAL PAPER Short-term obligations with maturities ranging
from 2 to 270 days, and issued by banks, corporations,
and other borrowers. These instruments are unsecured and
usually sold at a discount, although some are
interest-bearing, and offer a high level of safety and
liquidity.
LIQUIDITY A characteristic of an investment or an asset referring
to the ease of convertibility into cash within a
reasonably short period of time.
MATURITY The date at which a debt instrument is due and payable.
A bond due to mature on January 1, 2010 will return the
bondholder's principal and final interest payment on
that date.
MONEY MARKET Market for short-term debt instruments, including
banker's acceptances, commercial paper, negotiable
certificates of deposit, repurchase agreements, and
Treasury bills. Money market instruments are traded
through dealers, money center banks, and the Open Market
Trading Desk at the New York Federal Reserve Bank. All
of these instruments have a high level of safety and
liquidity.
REPURCHASE AGREEMENT Agreement between a seller and a buyer, usually of U.S.
(REPO) Government securities, whereby the seller agrees to
repurchase the securities at a higher agreed-upon price
and, usually, at a stated time. As a money market
vehicle, repos refer to the process of a government
securities dealer (usually a bank) borrowing from an
investor (typically a corporation with excess cash) to
finance its inventory, using the securities as
collateral.
TOTAL RETURN The most common yardstick to measure the performance of
A fund. Total return -- annualized or compound -- is
based on a combination of share price changes plus
income and capital gain distributions, if any, expressed
as a percentage gain or loss in value.
YIELD The dividends or interest paid on a security, expressed
as a percentage of the security's current price.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
7 - Scudder Money Market Series
<PAGE>
Investment Portfolio as of May 31, 1999
Money Market Series
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 7.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with State Street Bank and Trust Company dated 5/28/1999 at 4.8%, to be
repurchased at $189,600,060 on 6/1/1999, collateralized by:
U.S. Treasury Notes, 5.50% to 8.875%, 11/30/1999 to 5/15/2000
U.S. Treasury Bonds, 5.5% to 7.875%, 2/29/2000 to 8/15/2027
(Cost $189,499,000) ................................................................................ 189,499,000 189,499,000
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 5/28/1999 at 4.8%, to be
repurchased at $38,020,267 on 6/1/1999, collateralized by a U.S. Treasury Note,
3.625%, 7/15/2002 (Cost $38,000,000) ............................................................... 38,000,000 38,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Repurchase Agreements (Cost $227,499,000) 227,499,000
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial Paper 60.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Ace Overseas Corp., 4.16%, 6/7/1999 .................................................................. 49,500,000 49,459,988
Alpine Securitization Corp., 3.23%, 6/3/1999 ......................................................... 26,725,000 26,717,799
Alpine Securitization Corp., 4.72%, 7/8/1999 ......................................................... 35,990,000 35,811,710
American Honda Finance Corp., 5.08%, 7/28/1999* ...................................................... 25,000,000 25,000,000
Asset Securitization Corp., 4.64%, 6/24/1999 ......................................................... 50,000,000 49,845,708
Barton Capital Corp., 4.87%, 8/16/1999 ............................................................... 50,000,000 49,484,889
Coca-Cola Enterprises, Inc., 2.42%, 6/2/1999 ......................................................... 9,000,000 8,998,793
Coca-Cola Enterprises, Inc., 3.62%, 6/4/1999 ......................................................... 25,000,000 24,989,938
Coca-Cola Enterprises, Inc., 4.89%, 8/19/1999 ........................................................ 30,000,000 29,677,417
Colgate-Palmolive Inc., 4.65%, 6/30/1999 ............................................................. 27,500,000 27,393,888
Corporate Asset Funding Corp., 4.84%, 6/1/1999 ....................................................... 14,000,000 14,000,000
Corporate Asset Funding Corp., 4.75%, 7/20/1999* ..................................................... 45,000,000 44,704,775
Corporate Asset Funding Corp., 4.81%, 7/26/1999 ...................................................... 50,000,000 49,628,750
CXC, Inc., 4.77%, 7/6/1999 ........................................................................... 50,000,000 49,762,778
Denmark Danske Bank, 4.82%, 6/17/1999* ............................................................... 20,000,000 19,992,195
Duke Capital Corp., 4.23%, 6/8/1999 .................................................................. 20,000,000 19,981,217
Eastman Kodak Co., 4.74%, 7/22/1999 .................................................................. 20,000,000 19,864,000
Enterprise Funding Corp., 4.6%, 6/23/1999 ............................................................ 27,260,000 27,180,037
Eureka Securitization, Inc., 4.75%, 7/20/1999 ........................................................ 30,000,000 29,803,183
Eureka Securitization, Inc., 4.82%, 7/28/1999 ........................................................ 36,491,000 36,209,624
Fairway Finance Corp., 2.43%, 6/2/1999 ............................................................... 44,625,000 44,618,976
Fairway Finance Corp., 4.92%, 10/25/1999 ............................................................. 30,311,000 29,713,570
Fairway Finance Corp., 4.93%, 10/29/1999 ............................................................. 17,224,000 16,875,214
Falcon Asset Securitization Corp., 4.51%, 6/15/1999 .................................................. 23,072,000 23,028,753
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 - Scudder Money Market Series
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Fountain Square Commercial Funding, 4.52%, 6/14/1999 .................. 25,880,000 25,834,581
Fountain Square Commercial Funding, 4.58%, 6/17/1999 .................. 21,391,000 21,344,795
Fountain Square Commercial Funding, 4.64%, 6/21/1999 .................. 11,762,000 11,730,243
GTE Corp., 3.21%, 6/3/1999 ............................................ 20,000,000 19,994,644
GTE Corp., 4.31%, 6/9/1999 ............................................ 23,000,000 22,975,262
GTE Corp., 4.41%, 6/11/1999 ........................................... 17,950,000 17,925,867
General Motors Acceptance Corp., 4.96%, 6/1/1999 ...................... 64,000,000 64,000,000
General Motors Acceptance Corp., 4.99%, 7/1/1999 ...................... 64,000,000 63,733,911
Lehman Brothers Holding Corp., 4.86%, 7/1/1999 ........................ 25,000,000 24,895,833
Lexington Parker Capital Corp., 3.62%, 6/4/1999 ....................... 31,979,000 31,966,128
Lexington Parker Capital Corp., 4.77%, 7/8/1999 ....................... 40,000,000 39,799,789
Merita North America Corp., 4.74%, 7/19/1999 .......................... 20,000,000 19,871,733
Merita North America Corp., 4.87%, 8/10/1999 .......................... 50,000,000 49,524,583
Merrill Lynch & Co., 4.73%, 7/16/1999 ................................. 50,000,000 49,699,375
Mont Blanc Capital Corp., 4.64%, 6/25/1999 ............................ 50,000,000 49,839,333
Monte Rosa Capital Corp., 4.38%, 6/10/1999 ............................ 20,000,000 19,975,700
Morgan Stanley Dean Witter Discover Co., 4.33%, 6/10/1999 ............. 36,842,000 36,797,698
New Center Asset Trust, 4.81%, 9/3/1999 ............................... 50,000,000 49,372,681
Old Line Funding Corp., 4.74%, 7/2/1999 ............................... 30,000,000 29,874,192
Pemex Capital Corp., 4.84%, 8/16/1999 ................................. 50,000,000 49,488,056
Preferred Receivables Funding Corp., 4.71%, 7/6/1999 .................. 32,870,000 32,715,968
Preferred Receivables Funding Corp., 4.79%, 7/8/1999 .................. 50,000,000 49,748,708
Quincy Capital Corp., 4.13%, 6/7/1999 ................................. 25,000,000 24,979,958
Sheffield Receivables Corp., 4.57%, 6/17/1999 ......................... 50,000,000 49,892,222
Special Purpose Accounts Receivable Cooperative Corp., 4.64%, 6/22/1999 30,000,000 29,915,125
Twin Towers Inc., 4.76%, 7/20/1999 .................................... 60,681,000 60,282,073
Twin Towers Inc., 4.92%, 9/21/1999 .................................... 20,000,000 19,695,733
UBS Finance Corp., 5.04%, 12/15/1999 .................................. 50,000,000 48,651,097
Variable Funding Corp., 4.28%, 6/9/1999 ............................... 25,000,000 24,973,278
Variable Funding Corp., 4.75%, 7/20/1999 .............................. 40,000,000 39,737,578
WCP Funding Inc., 4.62%, 6/22/1999 .................................... 19,000,000 18,946,468
WCP Funding Inc., 4.73%, 7/8/1999 ..................................... 25,000,000 24,875,896
Windmill Funding Corp., 4.27%, 6/9/1999 ............................... 25,467,000 25,439,835
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder Money Market Series
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Windmill Funding Corp., 4.71%, 7/9/1999 .............................. 20,204,000 20,101,420
Windmill Funding Corp., 4.81%, 7/22/1999 ............................. 25,000,000 24,827,521
- -------------------------------------------------------------------------------------------------------
Total Commercial Paper (Cost $1,946,170,486) 1,946,170,486
- -------------------------------------------------------------------------------------------------------
Certificates Of Deposit 10.8%
- -------------------------------------------------------------------------------------------------------
American Express Centurion Bank, 4.895%, 6/22/1999* .................. 22,000,000 22,000,000
Bank of America, Bank Note, 4.76%, 6/1/1999* ......................... 50,000,000 50,000,000
Bayerische Landesbank, 4.791%, 6/10/1999* ............................ 40,000,000 39,976,044
Canadian Imperial Bank, 4.875%, 7/7/1999* ............................ 10,000,000 9,993,592
Deutsche Bank AG, 4.88%, 7/2/1999* ................................... 40,000,000 39,974,262
First National Chicago, Discount Note, 5.23%, 8/17/1999* ............. 99,000,000 99,000,000
Svenska Handelsbanken, Bank Note, 4.782%, 6/2/1999* .................. 40,000,000 39,999,924
Toronto-Dominion Bank, 4.772%, 6/14/1999* ............................ 50,000,000 49,992,090
Total Certificates Of Deposit (Cost $350,935,912) 350,935,912
- -------------------------------------------------------------------------------------------------------
Short-Term and Medium-Term Notes 22.2%
- -------------------------------------------------------------------------------------------------------
American Express Centurion Bank, Floating Rate Note, 4.89%, 6/15/1999* 15,000,000 15,000,000
American Express Centurion Bank, Floating Rate Note, 4.89%, 6/18/1999* 15,000,000 15,000,000
American Honda Finance Corp., 4.95%, 6/24/1999* ...................... 15,500,000 15,497,017
AmSouth Bank, Floating Rate Note, 4.82%, 6/15/1999* .................. 20,000,000 19,993,705
BankBoston, N.A., Floating Rate Note, 4.89%, 6/1/1999* ............... 25,000,000 25,000,000
Caterpillar Financial Services, 5.0%, 8/11/1999* ..................... 15,000,000 15,005,390
CIT Group Holdings Corp., 4.88%, 7/2/1999* ........................... 40,000,000 39,975,047
Comercia Inc., Medium Term Note, 4.9%, 6/15/1999* .................... 40,000,000 39,985,036
Countrywide Home Loan, 4.92%, 6/28/1999* ............................. 30,000,000 30,000,000
Countrywide Home Loan, Medium Term Note, 5.25%, 7/15/1999* ........... 20,000,000 20,000,000
FCC National Bank, Floating Rate Note, 4.8%, 6/1/1999* ............... 15,000,000 15,000,000
First Union National Bank, Discount Note, 5.23%, 8/17/1999* .......... 30,000,000 30,000,000
Fleet National Bank, 4.91%, 6/1/1999* ................................ 50,000,000 49,984,636
Goldman Sachs & Co., 4.99%, 6/4/1999* ................................ 40,000,000 40,000,000
Huntington National Bank, 4.99%, 6/1/1999* ........................... 25,000,000 24,996,883
IBM Corp., 5.07%, 3/22/2000 .......................................... 50,000,000 49,979,681
John Deere Capital Corp., 4.9%, 6/16/1999* ........................... 41,000,000 40,984,049
Key Bank, Bank Note, 5.01%, 8/20/1999* ............................... 22,000,000 22,004,382
MMR Funding I, Weekly Demand Note, 4.95%, 6/3/1999* .................. 5,500,000 5,500,000
NationsBank Corp., Weekly Demand Note, 4.83%, 6/1/1999* .............. 40,000,000 39,997,849
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Money Market Series
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Northern Trust Corp., Floating Rate Note, 4.79%, 6/8/1999* ............. 50,000,000 49,991,863
PNC Bank Corp., 4.90%, 6/28/1999* ...................................... 35,000,000 35,003,321
Student Loan Marketing Association, Floating Rate Note, 5.27%, 6/2/1999* 30,000,000 29,983,607
Transamerica Finance Corp., 5.25%, 8/18/1999* .......................... 50,000,000 50,000,000
- -----------------------------------------------------------------------------------------------------
Total Short-Term and Medium-Term Notes (Cost $718,882,466) 718,882,466
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $3,243,487,864) (a) 3,243,487,864
- -----------------------------------------------------------------------------------------------------
</TABLE>
(a) Cost for federal income tax purposes is $3,243,487,864.
* Floating rate security; date shown is next interest rate change.
The accompanying notes are an integral part of the financial statements.
11 - Scudder Money Market Series
<PAGE>
Financial Statememts
Statement of Assets and Liabilities
as of May 31, 1999
<TABLE>
<CAPTION>
Money
Assets Market Series
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (for cost, see accompanying lists of investment
portfolios)........................................................... $3,243,487,864
Cash ................................................................... 546,805
Receivable for Fund shares sold ........................................ 5,843,239
Receivable for investments sold ........................................ --
Interest receivable .................................................... 5,117,385
Other assets ........................................................... 138,774
--------------
Total assets ........................................................... 3,255,134,067
Liabilities
- -------------------------------------------------------------------------------------------------------------
Payable for investments purchased ...................................... 63,733,911
Notes payable .......................................................... --
Dividends payable ...................................................... 11,715,417
Payable for Fund shares redeemed ....................................... 8,345,862
Accrued management fee ................................................. 267,523
Other payables and accrued expenses .................................... 170,349
--------------
Total liabilities ...................................................... 84,233,062
------------------------------------------------------------------------ --------------
Net assets, at value $3,170,901,005
------------------------------------------------------------------------ --------------
Net Asset Value
- -------------------------------------------------------------------------------------------------------------
Managed Shares:
Net assets applicable to shares outstanding .......................... $ 395,212,740
Shares outstanding of capital stock, $.001 par value, 800,000,000
shares authorized................................................. 395,212,740
--------------
Net Asset Value, offering and redemption price per share (net assets /
shares outstanding)............................................... $ 1.00
--------------
Institutional Shares:
Net assets applicable to shares outstanding .......................... $1,805,788,987
Shares outstanding of capital stock, $.001 par value, 3,615,000,000
shares authorized.................................................. 1,805,788,987
--------------
Net Asset Value, offering and redemption price per share (net assets /
shares outstanding)................................................ $ 1.00
--------------
Premium Money Market Shares:
Net assets applicable to shares outstanding .......................... $ 936,084,051
Shares outstanding of capital stock, $.001 par value, 2,180,000,000
shares authorized................................................. 936,084,051
--------------
Net Asset Value, offering and redemption price per share (net assets /
shares outstanding)............................................... $ 1.00
--------------
Prime Reserve Money Market Shares:
Net assets applicable to shares outstanding .......................... $ 33,815,227
Shares outstanding of capital stock, $.001 par value, 1,180,000,000
shares authorized................................................. 33,815,227
--------------
Net Asset Value, offering and redemption price per share (net assets /
shares outstanding)............................................... $ 1.00
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder Money Market Series
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Five Months
Ended Year Ended
May 31, 1999 December 31,
Investment Income (Note D) 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest ........................................... $ 61,123,431 $ 92,336,668
------------ ------------
Expenses:
Management fee ..................................... 3,033,472 4,150,657
Shareholder services ............................... 328,856 971,137
Directors' fees and expenses ....................... 12,300 23,321
Custodian and accounting fees ...................... 168,868 207,509
Reports to shareholders ............................ 35,372 80,212
Auditing ........................................... 9,620 21,692
Legal .............................................. 18,204 20,048
Registration fees .................................. 156,149 418,959
Other .............................................. 36,283 10,874
------------ ------------
Total expenses before reductions ................... 3,799,124 5,904,409
Expense reductions ................................. (1,698,744) (1,846,622)
------------ ------------
Expenses, net ...................................... 2,100,380 4,057,787
----------------------------------------------------- ------------ ------------
Net investment income 59,023,051 88,278,881
----------------------------------------------------- ------------ ------------
----------------------------------------------------- ------------ ------------
Net increase (decrease) in net assets resulting from
operations $ 59,023,051 $ 88,278,881
----------------------------------------------------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder Money Market Series
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Five Months
Ended
May 31, 1999 Years Ended December 31,
Increase (Decrease) in Net Assets (Note D) 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income ............................. $ 59,023,051 $ 88,278,881 $ 29,622,141
---------------- ---------------- ----------------
Distributions to shareholders from:
Net investment income (Managed Shares) ............ (7,380,665) (18,908,573) (16,811,273)
---------------- ---------------- ----------------
Net investment income (Institutional Shares) ...... (33,615,524) (38,347,244) (8,101,246)
---------------- ---------------- ----------------
Net investment income (Premium Money Market Shares) (17,567,663) (30,962,225) (4,709,622)
---------------- ---------------- ----------------
Net investment income (Prime Reserve Money Market
Shares)........................................ (459,199) (60,839) --
---------------- ---------------- ----------------
Fund share transactions:
Managed Shares:
Proceeds from shares sold ......................... 673,318,688 1,521,267,560 1,604,556,971
Net asset value of shares issued to shareholders in
reinvestment of distributions ................. 1,551,477 5,506,361 7,105,515
Cost of shares redeemed ........................... (607,192,461) (1,568,154,523) (1,674,045,123)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund
share transactions............................... 67,677,704 (41,380,602) (62,382,637)
---------------- ---------------- ----------------
Institutional Shares:
Proceeds from shares sold ......................... 11,712,781,921 5,884,096,724 697,521,385
Net asset value of shares issued to shareholders in
reinvestment of distributions ................... 11,965,433 14,372,769 1,796,954
Cost of shares redeemed ........................... (10,985,348,196) (5,169,903,810) (361,494,193)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund
share transactions............................. 739,399,158 728,565,683 337,824,146
---------------- ---------------- ----------------
Premium Money Market Shares:
Proceeds from shares sold ......................... 1,070,305,354 2,381,877,957 612,133,352
Net asset value of shares issued to shareholders in
reinvestment of distributions.................. 15,125,932 24,053,642 2,900,558
Cost of shares redeemed ........................... (956,923,660) (1,933,144,105) (280,244,979)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund
share transactions............................. 128,507,626 472,787,494 334,788,931
---------------- ---------------- ----------------
Prime Reserve Money Market Shares:
Proceeds from shares sold ......................... 41,129,865 15,004,074 --
Net asset value of shares issued to shareholders in
reinvestment of distributions................... 341,450 17,985 --
Cost of shares redeemed ........................... (19,992,513) (2,685,634) --
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund
share transactions............................. 21,478,802 12,336,425 --
---------------- ---------------- ----------------
Increase (decrease) in net assets ................. 957,063,290 1,172,309,000 610,230,440
Net assets at beginning of period ................. 2,213,837,715 1,041,528,715 431,298,275
---------------- ---------------- ----------------
Net assets at end of period ....................... $ 3,170,901,005 $ 2,213,837,715 $ 1,041,528,715
---------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder Money Market Series
<PAGE>
Financial Highlights
The following table includes selected data for a share of the Managed Shares
class outstanding throughout each period and other performance information
derived from the financial statements.
Managed Shares (b)
<TABLE>
<CAPTION>
Five Months Ended
May 31, 1999 Years Ended December 31,
(Note D) 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------
Net asset value, beginning of period ............. $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------------------------------------------------------------------------
Net investment income ............................ .020 .052 .051 .049 .054 .038
Distributions from net investment income ......... (.020) (.052) (.051) (.049) (.054) (.038)
--------------------------------------------------------------------------
Net asset value, end of period ................... $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ............................. 1.99** 5.33 5.21 4.97 5.57 3.86
Ratios and Supplemental Data
Net assets, end of period ($ millions) ........... 395 328 369 431 372 367
Ratio of operating expenses, net to average
daily net assets (%) ........................... .23* .38 .49 .55 .55 .55
Ratio of operating expenses before expense
reductions to average daily net assets (%) ..... .37* .48 .59 .62 .68 .68
Ratio of net investment income to average daily
net assets (%) ................................. 4.78* 5.20 5.00 4.86 5.45 3.84
</TABLE>
(a) Total returns are higher due to maintenance of the Fund's expenses.
(b) Effective July 7, 1997, Scudder Money Market Series (formerly known as the
Managed Cash Fund) was divided into four classes, of which Scudder Money
Market Managed Shares is one. Shares of the Fund outstanding on such date
were redesignated as the Managed Shares of the Fund. The data set forth
above for the periods prior to July 17, 1997, reflects the investment
performance of the Fund prior to such redesignation.
* Annualized
** Not annualized
15 - Scudder Money Market Series
<PAGE>
The following table includes selected data for a share of the Institutional
Shares class outstanding throughout each period and other performance
information derived from the financial statements.
Institutional Shares
<TABLE>
<CAPTION>
For the Period
August 4, 1997
(commencement of
Five Months sale of
Ended Institutional
May 31, 1999 Year Ended Shares) to
(Note D) December 31, 1998 December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------
Net asset value, beginning of period ....................................... $1.000 $1.000 $1.000
-----------------------------------------------
Net investment income ...................................................... .020 .054 .022
Distributions from net investment income ................................... (.020) (.054) (.022)
-----------------------------------------------
Net asset value, end of period ............................................. $1.000 $1.000 $1.000
-----------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ....................................................... 2.03** 5.52 2.25**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ..................................... 1,806 1,066 338
Ratio of operating expenses, net to average daily net assets (%) ........... .14* .18 .26*
Ratio of operating expenses before expense reductions, to average daily
net assets (%) .......................................................... .28* .29 .31*
Ratio of net investment income to average daily net assets (%) ............. 4.87* 5.34 5.39*
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
16 - Scudder Money Market Series
<PAGE>
The following table includes selected data for a share of the Premium Money
Market Shares class outstanding throughout each period and other performance
information derived from the financial statements.
Premium Money Market Shares
<TABLE>
<CAPTION>
For the Period
July 7, 1997
(commencement of
Five Months Ended sale of Premium
May 31, 1999 Year Ended Shares) to
(Note D) December 31, 1998 December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------
Net asset value, beginning of period .................................... $1.000 $1.000 $1.000
--------------------------------------------------
Net investment income ................................................... .020 .053 .026
Distributions from net investment income ................................ (.020) (.053) (.026)
--------------------------------------------------
Net asset value, end of period .......................................... $1.000 $1.000 $1.000
--------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) .................................................... 2.00** 5.46 2.62**
Ratios and Supplemental Data
Net assets, end of period ($ millions) .................................. 936 808 335
Ratio of operating expenses, net to average daily net assets (%) ........ .20* .24 .38*
Ratio of operating expenses before expense reductions, to average daily
net assets (%) ........................................................ .34* .35 .43*
Ratio of net investment income to average daily net assets (%) .......... 4.81* 5.31 5.50*
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
17 - Scudder Money Market Series
<PAGE>
The following table includes selected data for a share of the Prime Reserve
Money Market Shares class outstanding throughout each period and other
performance information derived from the financial statements.
Prime Reserve Money Market Shares
<TABLE>
<CAPTION>
For the Period
October 15, 1998
(commencement of
Five Months Ended sale of Prime
May 31, 1999 Reserve Shares)
(Note D) to December 31,
1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
---------------------------------
Net asset value, beginning of period ...................................................... $1.000 $1.000
---------------------------------
Net investment income ..................................................................... .020 .011
Distributions from net investment income .................................................. (.020) (.011)
---------------------------------
Net asset value, end of period ............................................................ $1.000 $1.000
---------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ...................................................................... 1.98** 1.06**
Ratios and Supplemental Data
Net assets, end of period ($ millions) .................................................... 34 12
Ratio of operating expenses, net to average daily net assets (%) .......................... .26* .31*
Ratio of operating expenses before expense reductions, to average daily net assets (%) .... .40* .45*
Ratio of net investment income to average daily net assets (%) ............................ 4.73* 4.95*
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
18 - Scudder Money Market Series
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Fund, Inc. (the "Company") is an open-end diversified management
investment company comprised of three diversified money market portfolios:
Scudder Money Market Series (the "Fund"), Scudder Tax Free Money Market Series,
and Scudder Government Money Market Series (collectively, the "Funds"). Scudder
Tax Free Money Market Series and Scudder Government Money Market Series each
offers two classes of shares, Institutional Class and Managed Class and Scudder
Money Market Series offers four classes of shares, Institutional Class, Managed
Class, Premium Money Market Class, and Prime Reserve Money Market Class.
Security Valuation. The Fund 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.
Federal Income Taxes. The Company's policy is to qualify the Fund as a regulated
investment company under Subchapter M of the Internal Revenue Code, as amended,
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.
At May 31, 1999, the Fund had a net tax basis capital loss carryforward of
approximately $1,200 which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until May 31,
2007, the expiration date.
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.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value is equal to at least the repurchase price.
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.
B. Related Parties
Under the Investment Management Agreements (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"), the Adviser directs the
investments of the Fund in accordance with its investment objectives, policies,
and restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold, or entered into by the
Fund. The Adviser receives an investment management fee at an annual rate of
0.25% of average daily net assets for the Fund. Also, the Adviser has agreed to
waive a portion of its investment management fee for the Fund to the extent
necessary so that the total annualized investment management fee does not exceed
0.11%.
19 - Scudder Money Market Series
<PAGE>
For the five months ended May 31, 1999, the Adviser did not impose fees
of $1,698,744 and did impose fees of $1,334,728. For the year ended December 31,
1998, the Adviser did not impose fees of $1,846,622 and did impose fees of
$2,304,035.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Fund. Each class
of the Fund has entered into a Transfer Agency and Service Agreement with SSC.
SSC receives account fees that vary according to the account size and type of
account of the shareholders of the respective classes. For the five months ended
May 31, 1999 the following amounts were charged to the Fund:
Managed Class $ 43,274
Institutional Class 13,203
Premium Class 184,338
Prime Reserve Class 41,608
----------
$ 282,423
----------
Amount unpaid at May 31, 1999 $ 57,892
For the year ended December 31, 1998 the following amounts were charged to the
Fund:
Managed Class $ 244,534
Institutional Class 20,571
Premium Class 273,356
Prime Reserve Class 749
----------
$ 539,210
==========
The Fund has an arrangement with certain banks, institutions and other persons
under which they receive compensation from the Fund and the Adviser for
performing shareholder servicing functions for their customers who own shares in
the Fund. In connection with this arrangement, for the five months ended May 31,
1999, the Fund's receivable for the Adviser's portion of shareholder servicing
fees paid to certain banks and institutions aggregated $90,000.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Fund. For the five months
ended May 31, 1999, the amount charged to the Fund by SFAC aggregated $129,426,
of which $51,932 remains unpaid at May 31, 1999. For the year ended December 31,
1998, the amount charged to the Fund by SFAC aggregated $189,715.
The Company pays each of its Directors not affiliated with the Adviser an annual
retainer, plus specified amounts for attended board and committee meetings. For
the five months ended May 31, 1999, Directors' fees and expenses aggregated
$12,300.
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 Fund aggregated $39,621 as of May 31, 1999, an
applicable portion of which is included in accrued expenses of the Fund.
The accumulated balance of deferred directors' fees and interest thereon
relating to the Fund aggregated $33,277 as of December 31, 1998, an applicable
portion of which is included in accrued expenses of the Fund.
20 - Scudder Money Market Series
<PAGE>
Other. Printing and postage expenses related to preparing and distributing
material such as shareholder reports, prospectuses and proxy materials to
current shareholders are charged to each class based on number of shareholder
accounts. For the five months ended May 31, 1999, the following amounts were
paid by the Fund:
Managed Class $ 18,996
Institutional Class 7,176
Premium Class 8,372
Prime Reserve Class 828
----------
$ 35,372
==========
For the year ended December 31, 1998, the following amounts were paid by the
Fund:
Managed Class $ 29,625
Institutional Class 4,871
Premium Class 44,466
Prime Reserve Class 1,250
----------
$ 80,212
==========
C. Line of Credit
The Company and several other Scudder Funds (the "Participants") share in a $850
million revolving credit facility for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated among each of the Participants. Interest is calculated based
on the market rates at the time of the borrowing. Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement.
D. Year End Change
On November 13, 1998, the Board of Directors of the Company changed the fiscal
year end of the Fund from December 31 to May 31.
21 - Scudder Money Market Series
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of Scudder Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, 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 Money Market Series (a portfolio of
Scudder Fund, Inc., hereafter referred to as the "Fund") at May 31, 1999, and
the results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, 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 statement presentation. We believe that our audits, which included
confirmation of securities at May 31, 1999 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
July 16, 1999
22 - Scudder Money Market Series
<PAGE>
Tax Information
The total amount of dividends declared in the five month period ended May 31,
1999 by the Money Market Series of Scudder Fund, Inc. are taxable as ordinary
dividend income for Federal income tax purposes. None of this amount qualifies
for the dividends received deduction available to corporations.
You should consult your tax advisor as to the state and local tax status of the
dividends you received.
23 - Scudder Money Market Series
<PAGE>
Officers and Directors
Daniel Pierce*
President
Dr. Rosita P. Chang
Director; Professor of Finance, University of Rhode Island
Edgar R. Fiedler
Director; Senior Fellow and Economic Counsellor, The Conference Board, Inc.
Peter B. Freeman
Director; Corporate Director and Trustee
Dr. J. D. Hammond
Director; Dean, Smeal College of Business Administration
Richard M. Hunt
Director; University Marshal and Senior Lecturer, Harvard University
Ann M. McCreary*
Vice President
Kathryn L. Quirk*
Vice President
Frank J. Rachwalski, Jr.*
Vice President
John Millette*
Vice President and Secretary
Thomas W. Joseph*
Vice President and Assistant Secretary
John R. Hebble*
Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
24 - Scudder Money Market Series
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Prime Reserve Shares*
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market^+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series --
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free^+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder Corporate Bond Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder Select 500 Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Select 1000 Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Equity
- -------------
Worldwide
Scudder Global Fund
Scudder International Value Fund
Scudder International Growth and Income Fund
Scudder International Fund++
Scudder International Growth Fund
Scudder Global Discovery Fund***
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Preferred Series
- ----------------
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small
Company Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds or classes thereof may
not be available for purchase or exchange. +A portion of the income from the
tax-free funds may be subject to federal, state, and local taxes. *A class of
shares of the Fund. **Not available in all states. ***Only the Scudder Shares of
the Fund are part of the Scudder Family of Funds. ++Only the International
Shares of the Fund are part of the Scudder Family of Funds. +++ +++A no-load
variable annuity contract provided by Charter National Life Insurance Company
and its affiliate, offered by Scudder's insurance agencies, 1-800-225-2470. +++
+++ +++A no-load variable annuity contract issued by Glenbrook Life and Annuity
Company and underwritten by Allstate Financial Services, Inc., sold by Scudder's
insurance agencies, 1-800-225-2470. #These funds, advised by Scudder Kemper
Investments, Inc., are traded on the New York Stock Exchange and, in some cases,
on various other stock exchanges.
25 - Scudder Money Market Series
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.*
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
* Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- www.scudder.com
1-800-343-2890
Personal Investment Organizer: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you previously designated.
Distributions Direct
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
26 - Scudder Money Market Series
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 8,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
800 no-load funds from well-known companies--with no
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder
Brokerage account already reserved for them, with
no minimum investment. For information about
Scudder Brokerage Services, call 1-800-700-0820.
Fund Folio funds held less than six months will be charged a transaction fee. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
</TABLE>
27 - Scudder Money Market Series
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $280 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
Scudder Premium Money Market Shares and Scudder Prime Reserve Money Market
Shares are not insured or guaranteed by the U.S. Government. Scudder Money
Market Series seeks to maintain a constant net asset value of $1.00 per share,
but there can be no assurance that the stable net asset value will be
maintained.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
