Scudder
Managed Shares:
Scudder Money
Market Series
Scudder Tax Free Money
Market Series
Scudder Government
Money Market Series
Annual Report
May 31, 1999
No-Load Funds
Three no-load (no sales charges) mutual fund portfolios each seeking to provide
high money market income with preservation of capital and liquidity through
investments in different types of instruments.
SCUDDER
<PAGE>
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Scudder Money Market Series Date of Inception: 1/12/81 Ticker Symbol: MCAXX
Scudder Tax Free Money Market Series Date of Inception: 10/1/82 Ticker Symbol: MGTXX
Scudder Government Money Market Series Date of Inception: 10/31/81 Ticker Symbol: MGOXX
- -----------------------------------------------------------------------------------------------
</TABLE>
Table of Contents
3 Letter from the Series' President Scudder Government
Money Market Series
Scudder Money Market Series 13 Investment Portfolio
4 Investment Portfolio 26 Financial Highlights
20 Financial Highlights
14 Financial Statements
Scudder Tax Free Money 28 Notes to Financial Statements
Market Series 32 Report of Independent AccountantS
8 Investment Portfolio 33 Tax Information
24 Financial Highlights 36 Officers and Directors
37 Investment Products and Services
38 Scudder Solutions
2 - Scudder Managed Shares
<PAGE>
Letter from the Series' President
Dear Shareholders,
Scudder Managed Shares is a class of shares in three different money market
mutual fund portfolios: Money Market Series, Tax Free Money Market Series, and
Government Money Market Series. Each of these money market portfolios seeks to
provide a high level of current income while preserving capital and maintaining
liquidity.
All three Portfolios seek to maintain a net asset value of $1.00, and have
done so since their inception. (There is no guarantee, of course, that each will
maintain stable net asset values.)
Tables showing dividend payments and other financial information for the
five-month period ended May 31, 1999 can be found within this report. In
addition, please see the following pages for financial statements as of May 31,
1999, as well as a list of each Portfolio's investments.
For those of you interested in new Scudder products, we are pleased to
introduce Scudder Select 500 Fund and Scudder Select 1000 Growth Fund. Both
funds are managed with the goal of pursuing long-term outperformance compared to
their benchmark indices, the S&P 500 Index and the Russell 1000 Growth Index,
respectively. For more information on either Select fund, please call us at the
number below.
If you have any questions concerning any series of Scudder Managed Shares,
please call 1-800-SCUDDER and our representatives will be happy to assist you.
Sincerely,
Daniel Pierce
President
Scudder Money Market Series
Scudder Tax Free Money Market Series
Scudder Government Money Market Series
3 - Scudder Managed Shares
<PAGE>
Investment Portfolio as of May 31, 1999
Money Market Series
<TABLE>
<CAPTION>
Principal
Amount ($) 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
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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.
4 - Scudder Managed Shares
<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
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
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Total Commercial Paper (Cost $1,946,170,486) 1,946,170,486
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</TABLE>
The accompanying notes are an integral part of the financial statements.
5 - Scudder Managed Shares
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------
Certificates Of Deposit 10.8%
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<S> <C> <C>
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
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
</TABLE>
The accompanying notes are an integral part of the financial statements.
6 - Scudder Managed Shares
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
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<S> <C> <C>
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
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Total Short-Term and Medium-Term Notes (Cost $718,882,466) 718,882,466
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Total Investment Portfolio-- 100.0% (Cost $3,243,487,864) (a) 3,243,487,864
- ----------------------------------------------------------------------------------------------------
</TABLE>
(a) Cost for federal income tax purposes is $3,243,487,864.
* Floating rate security; date shown is next interest rate change.
The accompanying notes are an integral part of the financial statements.
7 - Scudder Managed Shares
<PAGE>
Investment Portfolio as of May 31, 1999
Tax Free Money Market Series
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------
Municipal Investments 100.0%
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alaska
Valdez, AK, Marine Terminal Revenue, Exxon Pipeline Project, Daily Demand Note, 3.3%,
12/1/2033 .................................................................................. 2,000,000 2,000,000
Arizona
Arizona, Salt River Project Agricultural Improvement and Power District, TECP, 3.2%, 8/11/1999 3,300,000 3,300,000
Maricopa County, AZ, Pollution Control Revenue, El Paso Electric Co., Weekly Demand Note,
3.45%, 12/1/2014 ........................................................................... 2,900,000 2,900,000
Pima County, AZ, Industrial Development Authority, SFE Technologies, Weekly Demand Note,
3.85%, 12/1/2005 ........................................................................... 1,100,000 1,100,000
Colorado
Cherry Creek, CO, South Metropolitan District #1, Weekly Demand Note, 3.25%, 6/1/2006 ........ 4,550,000 4,550,000
Platte River Power Authority, CO, TECP, 3.25%, 8/17/1999 ..................................... 2,000,000 2,000,000
Smith Creek, CO, Metropolitan District, Water Utility Revenue Bond, Weekly Demand Note,
3.3%, 10/1/2035 ............................................................................ 5,000,000 5,000,000
District of Columbia
District of Columbia, General Obligation:
Series 1991 B, Daily Demand Note, 3.4%, 6/1/2003 ........................................... 3,600,000 3,600,000
Series A1, Daily Demand Note, 3.45%, 10/1/2007 ............................................. 5,000,000 5,000,000
Florida
Florida Municipal Power Agency, TECP, 3.15%, 8/12/1999 ....................................... 3,700,000 3,700,000
Jacksonville, FL, Electric Authority, TECP, 3.2%, 7/22/1999 .................................. 3,000,000 3,000,000
Orange County, FL, Health Facilities Authority, TECP, Series 1985, 3.2%, 7/22/1999 ........... 3,000,000 3,000,000
Orlando, FL, Capital Improvement Revenue, TECP, 3.45%, 6/7/1999 .............................. 2,000,000 2,000,000
Putnam County, FL, Pollution Control Revenue, Seminole Electric Cooperative Finance Corp.,
Weekly Demand Note, 3.35%, 3/15/2014 ....................................................... 3,100,000 3,100,000
Sunshine State, FL, Goverment Finance Commission, TECP, 3.35%, 6/11/1999 ..................... 4,100,000 4,100,000
University of Northern Florida, Capital Improvement Revenue, Weekly Demand Note, 3.3%,
11/1/2024 .................................................................................. 2,000,000 2,000,000
Georgia
Fulton County, GA, Pollution Control Revenue, General Motors Project, Weekly Demand Note,
3.35%, 12/1/2001 ........................................................................... 1,580,000 1,580,000
Gainsville Redevelopment Authority, GA, Riverside Military Academy Project, Weekly Demand
Note, 3.3%, 1/1/2023 ....................................................................... 2,000,000 2,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 - Scudder Managed Shares
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Indiana
Indiana Bond Bank, Tri-County Conservancy District, Weekly Demand Note, Series 1997 D,
3.32%, 1/1/2017 ............................................................................. 7,010,000 7,010,000
Jasper County, IN, Pollution Control Revenue, Northern Indiana Public Service Co., TECP, 3.2%,
7/23/1999 ................................................................................... 3,500,000 3,500,000
Kentucky
Danville, KY, Multi-City Lease Revenue, TECP, 3.45%, 6/8/1999 ................................. 4,125,000 4,125,000
Mason County, KY, East Kentucky Power Cooperative, Pollution Control Revenue, Weekly
Demand Note, 3.35%, 10/15/2014 .............................................................. 4,145,000 4,145,000
Mayfield, KY, Multi-City Lease Revenue, Kentucky League of Cities Funding Trust, Weekly
Demand Note, 3.4%, 7/1/2026 ................................................................. 6,000,000 6,000,000
Pendleton County, KY, Multi-County Lease Revenue, TECP:
3.1%, 7/19/1999 ............................................................................. 3,000,000 3,000,000
3.1%, 7/21/1999 ............................................................................. 3,000,000 3,000,000
Louisiana
Louisiana Public Facilities Authority, Hospital Revenue, Willis Knighton Medical Center, Weekly
Demand Note, 3.4%, 9/1/2025 (b) ............................................................. 3,000,000 3,000,000
West Baton Rouge Parish,LA, Dow Chemical Project, TECP, Series 1985, 3.25%, 8/11/1999 ......... 3,700,000 3,700,000
Maryland
Anne Arundel County, MD, Baltimore Electric & Gas, TECP, Series 1985, 3.25%, 7/23/1999 ........ 3,400,000 3,400,000
Baltimore County, MD, Oak Crest Village Inc. Project, Weekly Demand Note, 3.25%, 1/1/2029 ..... 3,000,000 3,000,000
Michigan
Michigan Strategic Fund, Dow Chemical Co., Pollution Control Revenue, 3.25%, 7/19/1999 ........ 3,800,000 3,800,000
Mississippi
Clairbone County, MS, South Mississippi Electric Power Association, TECP, Series 1985G-2,
3.2%, 6/11/1999 ............................................................................. 3,600,000 3,600,000
Missouri
Columbia, MO, Special Obligation, Insurance Reserve Bonds, Weekly Demand Note, 3.2%,
6/1/2008 .................................................................................... 2,700,000 2,700,000
Nevada
Las Vegas, NV, Valley Water District, TECP:
3.15%, 7/20/1999 ............................................................................ 5,000,000 5,000,000
3.25%, 7/21/1999 ............................................................................ 3,500,000 3,500,000
3.4%, 6/11/1999 ............................................................................. 5,000,000 5,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
9 - Scudder Managed Shares
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
New Mexico
Farmington, NM, Pollution Control Revenue, El Paso Electric Co., Weekly Demand Note,
Series 1994 A, 3.25%, 11/1/2013 ............................................................... 4,600,000 4,600,000
New York
Nassau County, NY, Tax Anticipation Notes:
Series 1998 B, 3.5%, 8/18/1999 ................................................................ 4,300,000 4,303,927
Series 1998 C, 3.5%, 12/22/1999 ............................................................... 1,300,000 1,302,812
New York City Municipal Water Finance Authority, TECP, 3.2%, 8/17/1999 .......................... 2,500,000 2,500,000
North Carolina
North Carolina Healthcare Commission, Pooled Finance, Series 1985, Weekly Demand Note,
3.3%, 12/1/2025 (b) ........................................................................... 7,800,000 7,800,000
Pennsylvania
Allegheny County, PA, Hospital Development Authority, TECP, 3.2%, 7/22/1999 ..................... 1,500,000 1,500,000
Delaware Valley, PA, Regional Finance Authority, Weekly Demand Note, 3.2%, 12/1/2020 ............ 1,600,000 1,600,000
Pennsylvania Higher Educational Facilities Authority, University of Pennsylvania Health Services,
Weekly Demand Note, 3.45%, 1/1/2026 ........................................................... 5,000,000 5,000,000
Pennsylvania, General Obligation, TECP, S3.2%, 8/11/1999 ........................................ 4,000,000 4,000,000
Schuylkill County, PA, Industrial Development Authority, Gilberton Power Project, Weekly
Demand Note, 3.2%, 12/1/2002 .................................................................. 5,000,000 5,000,000
South Carolina
South Carolina Public Service Authority:
TECP, 3.2%, 8/12/1999 ......................................................................... 3,500,000 3,500,000
Weekly Demand Note, 3.32%, 1/1/2023 (b) ....................................................... 2,000,000 2,000,000
Tennessee
City of Clarksville, TN, Public Building Authority, Pooled Financing, Weekly Demand Note,
3.25%, 6/1/2024 ............................................................................... 3,800,000 3,800,000
Texas
Austin, TX, Utility System, TECP, 3.25%, 6/14/1999 .............................................. 5,000,000 5,000,000
Harris County, TX, SCH Health Care System:
TECP, Series 1997 A, 3.2%, 7/26/1999 .......................................................... 3,000,000 3,000,000
TECP, Series 1997 A, 3.15%, 7/20/1999 ......................................................... 3,000,000 3,000,000
Weekly Demand Note, 3.4%, 7/1/2023 ............................................................ 3,000,000 3,000,000
Houston, TX, Water and Sewer System, TECP:
3.2%, 8/5/1999 ................................................................................ 5,000,000 5,000,000
3.25%, 7/19/1999 .............................................................................. 3,000,000 3,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Managed Shares
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Port Development Corp., TX, Marine Terminal Refunding Revenue, Stolt Terminals, Series 1989,
Weekly Demand Note, 3.2%, 1/15/2014 ...................................................... 1,500,000 1,500,000
San Antonio, TX, Electric & Gas Municipal Securities Trust Receipts, Weekly Demand Note,
3.33%, 2/1/2020 .......................................................................... 4,700,000 4,700,000
San Antonio, TX, Industrial Development Authority, River Center Associates Project, Weekly
Demand Note, 3.3%, 12/1/2012 ............................................................. 2,700,000 2,700,000
Texas Small Business Industrial Development Corp., Public Facilities Capital Access Program,
Weekly Demand Note, Series 1986, 3.35%, 7/1/2026 ......................................... 3,000,000 3,000,000
State of Texas, Tax and Revenue Anticipation Note, 4.5%, 8/31/1999 ......................... 3,000,000 3,008,670
Texas Municipal Power Agency, TECP:
3.2%, 7/20/1999 .......................................................................... 4,000,000 4,000,000
3.15%, 7/21/1999 ......................................................................... 4,000,000 4,000,000
Texas Public Finance Authority, TECP, Series 1993A, 3.1%, 7/20/1999 ........................ 2,000,000 2,000,000
University of Texas, TX, TECP:
3.25%, 7/19/1999 ......................................................................... 2,200,000 2,200,000
3.25%, 7/21/1999 ......................................................................... 2,000,000 2,000,000
Utah
Salt Lake City, UT, Pollution Control Revenue, BP Oil Project, Daily Demand Note, 3.4%,
8/1/2007 ................................................................................. 4,500,000 4,500,000
Vermont
Vermont Industrial Development, Vermont Marble Company, VRDN, 3.875%, 12/1/2004 ............ 2,840,000 2,840,000
Vermont Student Assistance Corp., Student Loan Revenues, VRDN, 3.8%, 1/1/2004 .............. 4,615,000 4,615,000
Virginia
Louisa, VA, Pollution Control Revenue, Virginia Energy and Power Company, 3.25%, 7/16/1999 . 3,500,000 3,500,000
Wisconsin
Wausau, WI, Pollution Control Revenue, Minnesota Mining and Manufacturing, Weekly Demand
Note, 3.726%, 8/1/2017 ................................................................... 500,000 500,000
Wisconsin Health & Educational Facilities Authority, Wheaton Franciscan Services,
Weekly Demand Note, 3.25%, 8/15/2016 ..................................................... 3,500,000 3,500,000
Wisconsin State Health Care Facilities Authority, Franciscan Health Care:
Series 1985 A-1, Weekly Demand Note, 3.35%, 1/1/2016 ..................................... 5,000,000 5,000,000
Series 1985 A-2, Weekly Demand Note, 3.35%, 1/1/2016 ..................................... 3,500,000 3,500,000
- -------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $247,380,409) (a) 247,380,409
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Managed Shares
<PAGE>
- --------------------------------------------------------------------------------
(a) Cost for federal income tax purposes was $247,380,409.
(b) Bond is insured by one of these companies: AMBAC, FGIC, FSA or MBIA.
Abbreviations used in the statement:
TECP Tax Exempt Commercial Paper VRDN Variable Rate Demand Note
The accompanying notes are an integral part of the financial statements.
12 - Scudder Managed Shares
<PAGE>
Investment Portfolio as of May 31, 1999
Government Money Market Series
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement 1.4%
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with State Street Bank and Trust Company dated 5/28/1999 at 4.8%,
to be repurchased at $1,552,828 on 6/1/1999, collateralized by a $1,665,000 U.S. Treasury Bond, ----------
5/25/2000 (Cost $1,552,000) ................................................................... 1,552,000 1,552,000
----------
U.S. Government Agency Obligations 98.6%
- -----------------------------------------------------------------------------------------------------------------------------
Federal Farm Credit Bank, 4.85%, 7/1/1999* ...................................................... 5,000,000 4,999,326
Federal Home Loan Bank, 4.8%, 6/18/1999* ........................................................ 7,000,000 6,997,282
Federal Home Loan Bank, 5.03%, 10/29/1999 ....................................................... 5,000,000 5,000,000
Federal Home Loan Bank, 5.12%, 5/17/2000 ........................................................ 5,000,000 5,000,000
Federal Home Loan Mortgage Corp., 3.52%, 6/4/1999 ............................................... 947,000 946,630
Federal Home Loan Mortgage Corp., 4.44%, 6/16/1999 .............................................. 12,000,000 11,976,350
Federal Home Loan Mortgage Corp., 4.71%, 6/18/1999* ............................................. 5,000,000 4,996,153
Federal Home Loan Mortgage Corp., 4.73%, 8/12/1999 .............................................. 6,350,000 6,289,675
Federal Home Loan Mortgage Corp., 4.79%, 8/18/1999 .............................................. 17,000,000 16,823,200
Federal Home Loan Mortgage Corp., 4.8%, 8/24/1999 ............................................... 10,000,000 9,888,000
Federal National Mortgage Association, 4.76%, 6/2/1999* ......................................... 5,000,000 4,997,488
Federal National Mortgage Association, 3.57%, 6/4/1999 .......................................... 5,000,000 4,998,017
Federal National Mortgage Association, 4.85%, 6/6/1999* ......................................... 3,000,000 2,997,703
Federal National Mortgage Association, 4.64%, 7/14/1999 ......................................... 3,000,000 2,983,087
Federal National Mortgage Association, 4.8%, 8/20/1999 .......................................... 15,580,000 15,413,467
Student Loan Marketing Association, 5.27%, 6/2/1999* ............................................ 4,000,000 3,998,339
Student Loan Marketing Association, 5.27%, 6/2/1999* ............................................ 5,000,000 4,997,268
- -----------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency Obligation (Cost $113,301,985) 113,301,985
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $114,853,985) (a) 114,853,985
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Cost for federal income tax purposes was $114,853,985.
* Floating rate security; date shown is next interest rate change.
The accompanying notes are an integral part of the financial statements.
13 - Scudder Managed Shares
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of May 31, 1999
<TABLE>
<CAPTION>
Tax Free Government
Money Money Money
Assets Market Series Market Series Market Series
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investments, at value (for cost, see accompanying lists of investment
portfolios)......................................................... $3,243,487,864 $ 247,380,409 $ 114,853,985
Cash ................................................................... 546,805 907 396
Receivable for Fund shares sold ........................................ 5,843,239 -- --
Receivable for investments sold ........................................ -- 1,000,000 --
Interest receivable .................................................... 5,117,385 1,059,339 404,089
Other assets ........................................................... 138,774 86,190 54,727
-------------- -------------- --------------
Total assets ........................................................... 3,255,134,067 249,526,845 115,313,197
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased ...................................... 63,733,911 -- --
Notes payable .......................................................... -- 865,000 --
Dividends payable ...................................................... 11,715,417 644,542 440,380
Payable for Fund shares redeemed ....................................... 8,345,862 -- --
Accrued management fee ................................................. 267,523 23,674 3,038
Other payables and accrued expenses .................................... 170,349 470,120 177,898
-------------- -------------- --------------
Total liabilities ...................................................... 84,233,062 2,003,336 621,316
- ------------------------------------------------------------------------ -------------- -------------- --------------
Net assets, at value ................................................... $3,170,901,005 $ 247,523,509 $ 114,691,881
- ------------------------------------------------------------------------ -------------- -------------- --------------
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------
Managed Shares:
Net assets applicable to shares outstanding .......................... $ 395,212,740 $ 110,331,609 $ 40,920,474
Shares outstanding of capital stock, $.001 par value, 800,000,000,
500,000,000, and 1,500,000,000 shares authorized, respectively..... 395,212,740 110,331,609 40,920,474
-------------- -------------- --------------
Net Asset Value, offering and redemption price per share (net assets /
shares outstanding)................................................ $ 1.00 $ 1.00 $ 1.00
-------------- -------------- --------------
Institutional Shares:
Net assets applicable to shares outstanding .......................... $1,805,788,987 $ 137,191,900 $ 73,771,407
Shares outstanding of capital stock, $.001 par value, 3,615,000,000,
500,000,000, and 1,500,000,000 shares authorized, respectively...... 1,805,788,987 137,191,900 73,771,407
-------------- -------------- --------------
Net Asset Value, offering and redemption price per share (net assets /
shares outstanding)................................................ $ 1.00 $ 1.00 $ 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.
14 - Scudder Managed Shares
<PAGE>
Statement of Operations
five months ended May 31, 1999 (See Note D)
<TABLE>
<CAPTION>
Tax Free Government
Money Money Money
Investment Income Market Series Market Series Market Series
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest .......................................... $ 61,123,431 $ 3,404,952 $ 2,543,712
---------------- ---------------- ----------------
Expenses:
Management fee .................................... 3,033,472 276,695 128,159
Shareholder services .............................. 328,856 119,436 31,228
Directors' fees and expenses ...................... 12,300 15,596 12,868
Custodian and accounting fees ..................... 168,868 26,788 28,268
Reports to shareholders ........................... 35,372 19,916 6,068
Auditing .......................................... 9,620 9,620 9,620
Legal ............................................. 18,204 18,140 7,104
Registration fees ................................. 156,149 53,120 47,220
Interest expense .................................. -- 14,547 --
Other ............................................. 36,283 19,688 9,795
---------------- ---------------- ----------------
Total expenses before reductions .................. 3,799,124 573,546 280,330
Expense reductions ................................ (1,698,744) (110,678) (76,896)
---------------- ---------------- ----------------
Expenses, net ..................................... 2,100,380 462,868 203,434
------------------------------------------------------------------------- ---------------- ----------------
Net investment income ............................. 59,023,051 2,942,084 2,340,278
------------------------------------------------------------------------- ---------------- ----------------
------------------------------------------------------------------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
operations .................................... $ 59,023,051 $ 2,942,084 $ 2,340,278
------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Managed Shares
<PAGE>
Statement of Operations
year ended December 31, 1998
<TABLE>
<CAPTION>
Tax Free Government
Money Money Money
Investment Income Market Series Market Series Market Series
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest ............................................ $ 92,336,668 $ 8,588,899 $ 5,677,848
---------------- ---------------- ----------------
Expenses:
Management fee ...................................... 4,150,657 617,012 262,038
Shareholder services ................................ 971,137 244,402 132,960
Directors' fees and expenses ........................ 23,321 20,732 17,185
Custodian and accounting fees ....................... 207,509 48,843 58,336
Reports to shareholders ............................. 80,212 23,780 18,650
Auditing ............................................ 21,692 20,702 20,324
Legal ............................................... 20,048 16,920 4,489
Registration fees ................................... 418,959 46,056 23,395
Interest expense .................................... -- 49,489 --
Other ............................................... 10,874 4,758 49,801
---------------- ---------------- ----------------
Total expenses before reductions .................... 5,904,409 1,092,694 587,178
Expense reductions .................................. (1,846,622) (246,650) (157,381)
---------------- ---------------- ----------------
Expenses, net ....................................... 4,057,787 846,044 429,797
------------------------------------------------------------------------- ---------------- ----------------
Net investment income ............................... 88,278,881 7,742,855 5,248,051
------------------------------------------------------------------------- ---------------- ----------------
------------------------------------------------------------------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
operations .......................................... $ 88,278,881 $ 7,742,855 $ 5,248,051
------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder Managed Shares
<PAGE>
Statements of Changes in Net Assets
Money Market Series
<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.
17 - Scudder Managed Shares
<PAGE>
Statements of Changes in Net Assets
Tax Free Money Market Series
<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 ................................ $ 2,942,084 $ 7,742,855 $ 4,112,832
---------------- ---------------- ----------------
Distributions to shareholders from:
Net investment income (Managed Shares) ............... (1,394,080) (4,113,198) (2,806,394)
---------------- ---------------- ----------------
Net investment income (Institutional Shares) ......... (1,548,004) (3,629,657) (1,306,438)
---------------- ---------------- ----------------
Fund share transactions:
Managed Shares:
Proceeds from shares sold ............................ 99,017,219 337,100,112 378,820,759
Net asset value of shares issued to shareholders in
reinvestment of distributions ..................... 62,092 441,218 640,423
Cost of shares redeemed .............................. (113,933,041) (388,875,661) (368,394,901)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ..................................... (14,853,730) (51,334,331) 11,066,281
---------------- ---------------- ----------------
Institutional Shares:
Proceeds from shares sold ........................... 180,321,704 302,744,886 159,246,687
Net asset value of shares issued to shareholders in
reinvestment of distributions ................... 176,612 282,144 30,480
Cost of shares redeemed ............................. (163,880,733) (276,158,077) (65,571,803)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions...................................... 16,617,583 26,868,953 93,705,364
---------------- ---------------- ----------------
Increase (decrease) in net assets 1,763,853 (24,465,378) 104,771,645
Net assets at beginning of period ................... 245,759,656 270,225,034 165,453,389
---------------- ---------------- ----------------
Net assets at end of period ......................... $247,523,509 $245,759,656 $270,225,034
---------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 - Scudder Managed Shares
<PAGE>
Statements of Changes in Net Assets
Government Money Market Series
<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 ................................ $ 2,340,278 $ 5,248,051 $ 3,094,903
---------------- ---------------- ----------------
Distributions to shareholders from:
Net investment income (Managed Shares) ............... (761,431) (1,674,220) (1,921,752)
---------------- ---------------- ----------------
Net investment income (Institutional Shares) ......... (1,578,847) (3,573,831) (1,173,151)
---------------- ---------------- ----------------
Fund share transactions:
Managed Shares:
Proceeds from shares sold ............................ 91,945,583 196,423,665 204,615,796
Net asset value of shares issued to shareholders in
reinvestment of distributions ..................... 100,247 441,038 426,890
Cost of shares redeemed .............................. (83,879,369) (193,549,766) (203,521,896)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund
share transactions ............................... 8,166,461 3,314,937 1,520,790
---------------- ---------------- ----------------
Institutional Shares:
Proceeds from shares sold ............................ 35,868,128 147,948,753 115,334,278
Net asset value of shares issued to shareholders in
reinvestment of distributions ..................... 6,116 8,814 449
Cost of shares redeemed .............................. (52,072,570) (112,418,897) (60,903,665)
---------------- ---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions....................................... (16,198,326) 35,538,670 54,431,062
---------------- ---------------- ----------------
Increase (decrease) in net assets .................... (8,031,865) 38,853,607 55,951,852
Net assets at beginning of period .................... 122,723,746 83,870,139 27,918,287
---------------- ---------------- ----------------
Net assets at end of period .......................... $114,691,881 $122,723,746 $ 83,870,139
---------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 - Scudder Managed Shares
<PAGE>
Financial Highlights
Money Market Series
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
20 - Scudder Managed Shares
<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
Five Months (commencement of
Ended sale of 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
21 - Scudder Managed Shares
<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
Five Months (commencement of
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
22 - Scudder Managed Shares
<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 sale of Prime
Ended Reserve Shares)
May 31, 1999 to December 31,
(Note D) 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
23 - Scudder Managed Shares
<PAGE>
Financial Highlights
Tax Free Money Market Series
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 ............................. .011 .031 .030 .028 .032 .023
Distributions from net investment income and net
realized capital gains .......................... (.011) (.031) (.030) (.028) (.032) (.023)
-------------------------------------------------------------------------
Net asset value, end of period .................... $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) .................................. 1.07(a)** 3.10(a) 3.07(a) 2.88 3.30 2.29
Ratios and Supplemental Data
Net assets, end of period ($ millions) ............ 111 125 177 165 138 125
Ratio of operating expenses, net to average
daily net assets (%)............................. .52* .41 .65 .72 .79 .77
Ratio of operating expenses before expense
reductions to average daily net assets (%)....... .62* .51 .74 .72 .79 .77
Ratio of net investment income to average daily
net assets (%)................................... 2.57* 3.07 2.99 2.84 3.25 2.26
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
(b) Effective July 7, 1997, Scudder Tax Free Money Market Series (formerly
known as Managed Tax-Free Fund) was divided into two classes, of which
Scudder Tax Free 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
24 - Scudder Managed Shares
<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
sale of
Five Months 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 ..................................................... .012 .032 0.014
Distributions from net income ............................................. (.012) (.032) (0.014)
----------------------------------------------------
Net asset value, end of period ............................................ $1.000 $1.000 $1.000
- -------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ...................................................... 1.15** 3.26 1.40**
Ratios and Supplemental Data
Net assets, end of period ($ millions) .................................... 137 121 94
Ratio of operating expenses, net to average daily net assets (%) .......... .32* .26 .37*
Ratio of operating expenses before expense reductions, to average daily
net assets (%) ......................................................... .42* .36 .46*
Ratio of net investment income to average daily net assets (%) ............ 2.76* 3.21 3.36*
----------------------------------------------------
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
25 - Scudder Managed Shares
<PAGE>
Financial Highlights
Government Money Market Series
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 ........................... .019 .048 .049 .048 .054 .037
Distributions from net investment income ........ (.019) (.048) (.049) (.048) (.054) (.037)
--------------------------------------------------------------------------
Net asset value, end of period .................. $1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ............................ 1.86** 4.89 5.02 4.91 5.49 3.75
Ratios and Supplemental Data
Net assets, end of period ($ millions) .......... 41 33 29 28 50 69
Ratio of operating expenses, net to average ..... .49* .62 .55 .55 .55 .55
daily net assets (%)
Ratio of operating expenses before expense ...... .64* .77 .84 .77 .86 .84
reductions, to average daily net assets (%)
Ratio of net investment income to average daily
net assets (%)................................. 4.47* 4.82 4.93 4.81 5.36 3.61
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
(b) Effective July 7, 1997, Scudder Government Money Market Series (formerly
known as the Managed Government Securities Fund) was divided into two
classes, of which Scudder Goverment 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
26 - Scudder Managed Shares
<PAGE>
The following table includes selected data for a share of the Institutional
Shares class outstanding throughout the period and other performance information
derived from the financial statements.
Institutional Shares
<TABLE>
<CAPTION>
For the Period
August 4, 1997
(commencement of
sale of
Five Months 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 .................................................... .019 .051 .022
Distributions from net investment income ................................. (.019) (.051) (.022)
Net asset value, end of period ........................................... $1.000 $1.000 $1.000
- ------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ..................................................... 1.92** 5.23 2.17**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ................................... 74 90 54
Ratio of operating expenses, net to average daily net assets (%) ......... .35* .31 .31*
Ratio of operating expenses before expense reductions, to average daily
net assets (%)......................................................... .50* .46 .46*
Ratio of net investment income to average daily net assets (%) ........... 4.62* 5.10 5.21*
</TABLE>
(a) Total return is higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
27 - Scudder Managed Shares
<PAGE>
Notes to the 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, 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. 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.
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, 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 Scudder Tax Free Money Market Series Portfolio had a net
tax basis capital loss carryforward of approximately $340,000 which may be
applied against any realized net taxable gains of each succeeding year until
fully utilized or until May 31, 2002 ($26,000), May 31, 2003 ($16,000), May 31,
2004 ($282,000), and May 31, 2005 ($16,000), the respective expiration dates,
whichever occurs first. In addition, at May 31, 1999, the Scudder Government
Money Market Series Fund had a net tax basis capital loss carryforward of
approximately $9,000 which may be applied against any realized net taxable gains
of each succeeding year until fully utilized or until May 31, 2004 ($7,700) and
May 31, 2005 ($1,300), the respective expiration dates, whichever occurs first.
In addition, at May 31, 1999 the Scudder Money Market Series 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 Company 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 each Fund in accordance with its investment objectives, policies,
28 - Scudder Managed Shares
<PAGE>
and restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold, or entered into by each
Fund. The Adviser receives an investment management fee at an annual rate of
0.25% of average daily net assets for each Fund. Also, the Adviser has agreed to
waive a portion of its investment management fee for each of the series. In the
Money Market Series, Tax Free Money Market Series and Government Money Market
Series, the fee was waived to the extent necessary so that the total annualized
investment management fee of the Fund does not exceed 0.11%, 0.15% and 0.10%,
respectively.
For the five months ended May 31, 1999, the Adviser did not impose fees of
$1,698,744, $110,678, and $76,896 and did impose fees of $1,334,728, $166,017,
and $51,263 for the Money Market Series, the Tax Free Money Market Series and
the Government Money Market Series, respectively. For the year ended December
31, 1998, the Adviser did not impose fees of $1,846,622, $246,650, and $157,381
and did impose fees of $2,304,035, $370,362, and $104,657 for the Money Market
Series, the Tax Free Money Market Series and the Government Money Market Series,
respectively.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Funds. Each
class of each 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:
<TABLE>
<S> <C> <C> <C>
Tax Free Government Money
Money Market Money Market Market
Series Series Series
Managed Class $ 43,274 $ 6,250 $ 7,847
Institutional Class 13,203 6,250 6,250
Premium Class 184,338 -- --
Prime Reserve Class 41,608 -- --
---------- ---------- ----------
$ 282,423 $ 12,500 $ 14,097
========== ========== ==========
Amount unpaid at May 31, 1999 $ 57,892 $ 2,500 $ 2,759
</TABLE>
For the year ended December 31, 1998 the following amounts were charged:
<TABLE>
<S> <C> <C> <C>
Tax Free Government Money
Money Market Money Market Market
Series Series Series
Managed Class $ 244,534 $ 24,022 $ 43,998
Institutional Class 20,571 15,000 15,000
Premium Class 273,356 -- --
Prime Reserve Class 749 -- --
---------- ---------- ----------
$ 539,210 $ 39,022 $ 58,998
========== ========== ==========
</TABLE>
29 - Scudder Managed Shares
<PAGE>
Each of the Funds has arrangements with certain banks, institutions and other
persons under which they receive compensation from the Funds and the Adviser for
performing shareholder servicing functions for their customers who own shares in
the Funds. In connection with these arrangements, for the five months ended May
31, 1999, the Funds' receivable for the Adviser's portion of shareholder
servicing fees paid to certain banks and institutions aggregated $90,000 for the
Money Market Series, $55,000 for the Tax Free Money Market Series, and $8,500
for the Government Money Market Series.
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 Funds. For the five months
ended May 31, 1999, the amount charged to the Funds by SFAC aggregated $129,426
for the Money Market Series, $16,625 for the Tax Free Money Market Series, and
$24,774 for the Government Money Market Series, of which $51,932, $6,650, and
$9,685, respectively, remain unpaid at May 31, 1999. For the year ended December
31, 1998, the amount charged to the Funds by SFAC aggregated $189,715 for the
Money Market Series, $44,002 for the Tax Free Money Market Series, and $36,129
for the Government Money Market Series.
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
$40,764.
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 $266,660 as of
May 31, 1999, an applicable portion of which is included in accrued expenses of
each such Fund. The accumulated balance of deferred directors' fees and interest
thereon relating to the Funds constituting the Company aggregated $243,692 as of
December 31, 1998, an applicable portion of which is included in accrued
expenses of each such Fund.
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:
<TABLE>
<S> <C> <C> <C>
Tax Free Government Money
Money Market Money Market Market
Series Series Series
Managed Class $ 18,996 $ 12,984 $ 3,404
Institutional Class 7,176 6,932 2,664
Premium Class 8,372 -- --
Prime Reserve Class 828 -- --
---------- ---------- ----------
$ 35,372 $ 19,916 $ 6,068
========== ========== ==========
</TABLE>
30 - Scudder Managed Shares
<PAGE>
For the year ended December 31, 1998, the following amounts were paid:
<TABLE>
<S> <C> <C> <C>
Tax Free Government Money
Money Market Money Market Market
Series Series Series
Managed Class $ 29,625 $ 10,447 $ 9,747
Institutional Class 4,871 13,333 8,903
Premium Class 44,466 -- --
Prime Reserve Class 1,250 -- --
---------- ---------- ----------
$ 80,212 $ 23,780 $ 18,650
========== ========== ==========
</TABLE>
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. Each Fund may borrow up to a
maximum of 33 percent of its net assets under the agreement. During the five
months ended May 31, 1999, the Tax Free Money Market Series periodically
borrowed amounts from a bank and the weighted average outstanding daily balance
of bank loans (based on the average number of days the loans were outstanding)
was approximately $2.1 million, with a weighted average interest rate of 5.29%.
Interest expense for the period ended May 31, 1999, was $14,547. During the year
ended December 31, 1998, the Tax Free Money Market Series periodically borrowed
amounts from a bank and the weighted average outstanding daily balance of bank
loans (based on the average number of days the loans were outstanding) was
approximately $2.1 million, with a weighted average interest rate of 5.98%.
Interest expense for the period ended December 31, 1998 was $49,489.
D. Year End Change
On November 13, 1998, the Board of Directors of the Company changed the fiscal
year end of the Funds from December 31 to May 31.
31 - Scudder Managed Shares
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of Scudder Fund, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, 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, Tax Free Money
Market Series and Government Money Market Series (each a separate portfolio of
Scudder Fund, Inc., hereafter referred to as the "Fund") at May 31, 1999, and
the results of each of their operations, the changes in each of their net
assets, and the financial highlights for each of 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
32 - Scudder Managed Shares
<PAGE>
Tax Information (Unaudited)
The total amount of dividends declared in 1999 by each of the Government Money
Market Series and 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.
All of the dividends from the Tax Free Money Market Series of Scudder Fund, Inc.
declared in the five month period ended May 31, 1999 are exempt from Federal
income tax. Although dividend income from the Tax Free Money Market Series is
exempt from Federal taxation, it may not be exempt from state or local taxation.
You should consult your tax advisor as to the state and local tax status of the
dividends you received.
33 - Scudder Managed Shares
<PAGE>
This Page
intentionally
left blank.
34 - Scudder Managed Shares
<PAGE>
This Page
intentionally
left blank.
35 - Scudder Managed Shares
<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, Pennsylvania State
University
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.
36 - Scudder Managed Shares
<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.
37 - Scudder Managed Shares
<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
- ------------------------------------------------------------------------------------------------------------------------------
38 - Scudder Managed Shares
<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>
39 - Scudder Managed Shares
<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.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
