Filed electronically with the Securities and Exchange Commission
on May 31, 2000
File No. 2-78122
File No. 811-3495
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /___/
Pre-Effective Amendment No. /___/
Post-Effective Amendment No. 34 /_X_/
and/or --
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /___/
Amendment No. 30 /_X_/
----
SCUDDER MONEY MARKET TRUST
----------------------------------------------
(Exact name of Registrant as Specified in Charter)
345 Park Avenue, New York, NY 10154
-----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 295-1000
--------------
John Millette
Scudder Kemper Investments, Inc.
Two International Place, Boston MA 02110
--------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
/___/ immediately upon filing pursuant to paragraph (b),
/___/ on _____________________pursuant to paragraph (b),
/___/ 60 days after filing pursuant to paragraph (a)(1),
/___/ on _______________ pursuant to paragraph (a)(1)
/_X_/ 75 days after filing pursuant to paragraph (a)(2)
/___/ On _____________pursuant to paragraph (a)(2) of Rule 485.
If Appropriate, check the following box:
/___/ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
SCUDDER
INVESTMENTS(SM)
[LOGO]
--------------------------------------------------------------------------------
MONEY MARKET
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Scudder Money Market Series
Institutional Shares
Fund #403
Prospectus
August 14, 2000
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
<PAGE>
Scudder Money Market Series
How the fund works
2 Investment Approach
3 Main Risks to Investors
4 The Fund's Track Record
5 How Much Investors Pay
6 Other Policies and Risks
8 Who Manages and Oversees the Fund
11 Financial Highlights
How to invest in the fund
13 How to Buy Shares
14 How to Sell Shares
15 Policies You Should Know About
19 Understanding Distributions and Taxes
<PAGE>
How the fund works
On the next few pages, you'll find information about this fund's investment
goal, the main strategies it uses to pursue that goal, and the main risks that
could affect its performance.
Whether you are considering investing in the fund or are already a shareholder,
you'll probably want to look this information over carefully. You may want to
keep it on hand for reference as well.
Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. This fund's
share price isn't guaranteed, so be aware that you could lose money.
You can access all Scudder fund propectuses online at: www.scudder.com
<PAGE>
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Institutional Shares | ICAXX fund number | 403
Scudder Money Market Series
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Investment Approach
The fund seeks as high a level of current income as is consistent with
liquidity, preservation of capital, and the fund's investment policies. It does
this by investing exclusively in high quality short-term securities as well as
certain repurchase agreements.
The fund may buy securities from many types of issuers, including the U.S.
government, banks (both U.S. banks and U.S. branches of foreign banks),
corporations, and municipalities. The fund may invest more than 25% of total
assets in bank obligations. However, everything the fund buys must meet the
rules for money market fund investments (see sidebar). In addition, the fund
currently intends to only buy securities that are in the top credit grade for
short-term debt securities.
Working in conjunction with a credit analyst, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as credit quality, economic
outlooks, and possible interest rate movements. The managers may adjust the
fund's exposure to interest rate risk, typically seeking to take advantage of
possible rises in interest rates and to preserve yield when interest rates
appear likely to fall.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
MONEY FUND RULES
To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:
o individual securities must have remaining maturities of no more than
397 days
o the dollar-weighted average maturity of the fund's holdings cannot
exceed 90 days
o all securities must be in the top two credit grades for short-term debt
securities and denominated in U.S. dollars
2
<PAGE>
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[ICON] With its higher investment minimums and reduced transaction features,
these shares may be appropriate for institutional cash managers with
liquidity needs.
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Main Risks to Investors
There are several risk factors that could reduce the yield you get from the fund
or make it perform less well than other investments. Although the fund seeks to
preserve the value of your investment at $1.00 per share, you could lose money
by investing in the fund.
As with most money market funds, the most important factor is market interest
rates. The fund's yield tends to reflect current interest rates, which means
that when these rates fall, the fund's yield generally falls as well.
A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. To the
extent that the fund emphasizes certain sectors of the short-term securities
market, the fund increases its exposure to factors affecting these sectors. For
example, banks' repayment abilities could be compromised by broad economic
declines or sharp rises in interest rates. Securities from foreign banks may
have greater credit risk than comparable U.S. securities, for reasons ranging
from political and economic uncertainties to less stringent banking regulations.
Other factors that could affect performance include:
o the managers could be wrong in their analysis of interest rate trends
or credit quality
o the counterparty to a repurchase agreement or other transaction could
default on its obligations
o securities that rely on third-party insurers to raise their credit
quality could fall in price or go into default if the financial
condition of the insurer deteriorates
3
<PAGE>
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[ICON] While a fund's past performance isn't necessarily a sign of how it will
do in the future, it can be valuable for an investor to know. This page
looks at fund performance two different ways: year by year and over
time.
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The Fund's Track Record
The bar chart shows how the fund's Institutional Shares' returns have varied
from year to year, which may give some idea of risk. The table shows how the
class's returns over different periods average out. All figures on this page
assume reinvestment of dividends and distributions.
---------------------------------------------------------------
Annual Total Returns (%) as of 12/31 each year
---------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
'98
'99
2000 Total Return as of June 30:
Best Quarter: Worst Quarter:
---------------------------------------------------------------
Average Annual Total Returns (%) as of 12/31/1999
---------------------------------------------------------------
1 Year Since Inception*
---------------------------------------------------------------
* Class inception: 8/4/1997
To find out the current seven-day yield for the
fund's Institutional Shares, call 1-800-537-1988
(available 24 hours) or go to the fund's Web site at
http://institutionalfunds.scudder.com.
Total returns for 1998 and 1999 would have been lower
if operating expenses hadn't been maintained.
4
<PAGE>
How Much Investors Pay
The fund has no sales charges or other shareholder fees. The fund does have
annual operating expenses, and as a shareholder you pay them indirectly.
The table shows fees for the fund's Institutional Shares.
---------------------------------------------------------------
Fee Table
---------------------------------------------------------------
Shareholder Fees (paid directly from your investment) None
---------------------------------------------------------------
Annual Operating Expenses (deducted from fund assets)
---------------------------------------------------------------
Management Fee %
---------------------------------------------------------------
Distribution (12b-1) Fee %
---------------------------------------------------------------
Other Expenses %
---------------------------------------------------------------
Fund Administrative Fee %
---------------------------------------------------------------
Other Fund Expenses* %
-------
---------------------------------------------------------------
Total Annual Operating Expenses %
---------------------------------------------------------------
Fee Waiver %
-------
---------------------------------------------------------------
Net Annual Operating Expenses** %
---------------------------------------------------------------
* Includes such expenses as taxes, brokerage, interest
and fees and expenses of Board members not affiliated
with Scudder Kemper (including fees and expenses of
their independent counsel).
** By contract, the adviser has reduced its management fee
by 0.05% through 09/30/2001. From time to time, the
adviser may voluntarily waive an additional portion of
its management fee.
---------------------------------------------------------------
Expense Example
---------------------------------------------------------------
Based on the costs above [including one year of reduced expenses in each period
due to the contractual management fee waiver], this example is designed to help
you compare the expenses of the fund's Institutional Shares to those of other
funds. The example assumes operating expenses remain the same and that you
invested $10,000, earned 5% annual returns, reinvested all dividends and
distributions, and sold your shares at the
5
<PAGE>
end of each period. This is only an example; your actual expenses will be
different.
1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------------
---------------------------------------------------------------
6
<PAGE>
Other Policies and Risks
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other issues to know about:
o Although major changes tend to be infrequent, the fund's Board could
change the fund's investment goal without seeking shareholder approval.
o The fund's investment adviser establishes a security's credit grade
when it buys securities, using independent ratings or, for unrated
securities, its own credit analysis. If a security's credit quality
falls, the security will be sold unless the adviser or the Board
believes this would not be in the shareholders' best interests.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to request
a copy of the SAI (the back cover has information on how to do this).
Keep in mind that there is no assurance that any mutual fund will achieve its
goal.
7
<PAGE>
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[ICON] Scudder Kemper, the company with overall responsibility for managing
the fund, takes a team approach to asset management.
--------------------------------------------------------------------------------
Who Manages and Oversees the Fund
The investment adviser
The fund's investment adviser is Scudder Kemper Investments, Inc., located at
345 Park Avenue, New York, NY. Scudder Kemper has more than 80 years of
experience managing mutual funds, and currently has more than $290 billion in
assets under management.
The fund is managed by a team of investment professionals, who individually
represent different areas of expertise and who together develop investment
strategies and make buy and sell decisions. Supporting the fund managers are
Scudder Kemper's many economists, research analysts, traders, and other
investment specialists, located in offices across the United States and around
the world.
As payment for serving as investment adviser, Scudder Kemper receives a
management fee from the fund. For the most recent fiscal year end, the actual
amount the fund paid in management fees was --% of average daily net assets.
The portfolio managers
The following people handle the fund's day-to-day management.
Frank J. Rachwalski, Jr. Dean Meddaugh
Lead Portfolio Manager o Began investment career
o Began investment career in 1994
in 1973 o Joined the adviser in
o Joined the adviser in 1973 1996
o Joined the fund team in 1998 o Joined the fund team in 1998
8
<PAGE>
Administrative fee
The fund has entered into an administrative services agreement with Scudder
Kemper Investments, Inc. Pursuant to this agreement, Scudder Kemper will provide
or pay others to provide substantially all of the administrative services
required by the fund in exchange for the payment by the class of a fixed fee
rate of __% of average daily net assets. Such an administrative fee will enable
investors to determine with greater certainty the expense level that the fund
will experience, and, for the term of the administrative services agreement,
will transfer substantially all of the risk of increased costs to Scudder
Kemper. The initial term of the administrative agreement is three years.
Scudder Kemper will not bear certain fund expenses under the administrative
services agreement, such as taxes, brokerage, interest, extraordinary expenses
and the fees and expenses of the independent trustees of the fund's Board
(including the fees and expenses of their independent counsel). In addition, the
fund will continue to pay the fees required by its investment management
agreement with Scudder Kemper.
9
<PAGE>
The Board
A mutual fund's Board is responsible for the general oversight of the fund's
business. A majority of the Board is not affiliated with Scudder Kemper. These
independent trustees have primary responsibility for assuring that the fund is
managed in the best interests of its shareholders. The following people comprise
the fund's Board:
Linda C. Coughlin Joan E. Spero
o Managing Director, Scudder o President, Doris Duke
Kemper Investments, Inc. Charitable Foundation
o President of the fund
Jean G. Stromberg
Henry P. Becton, Jr. o Consultant
o President and General
Manager, WGBH Educational Jean C. Tempel
Foundation o Venture Partner, Internet
Capital Group (Internet
Dawn-Marie Driscoll holding company)
o Executive Fellow, Center
for Business Ethics, Steven Zaleznick
Bentley College o President and Chief
o President, Driscoll Executive Officer, AARP
Associates (consulting Services, Inc.
firm)
Edgar Fiedler
o Senior Fellow and Economic
Counsellor, The Conference
Board, Inc.
Keith R. Fox
o Private Equity Investor
o President, Exeter Capital
Management Corporation
10
<PAGE>
Financial Highlights
This table is designed to help you understand the financial performance of the
fund's Institutional Shares in recent years. The figures in the first part of
the table are for a single share. The total return figures represent the
percentage that an investor in Institutional Shares of the fund would have
earned (or lost), assuming all dividends and distributions were reinvested. This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, is included in the annual report (see
"Shareholder reports" on the back cover).
Scudder Money Market Series -- Institutional Shares
[To be updated]
11
<PAGE>
How to invest in the fund
The following pages tell you how to invest in this fund and what to expect as a
shareholder. If you're investing directly with Scudder, all of this information
applies to you.
<PAGE>
How to Buy Shares
Use these instructions to invest directly with Scudder. Make out your check to
"The Scudder Funds."
<TABLE>
<CAPTION>
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Buying shares First investment Additional investments
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$1,000,000 or more for all No minimum amount
accounts
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<S> <C> <C>
By wire o Call 1-800-537-3177 to open o Instruct the wiring bank to
an account and get an account transmit the specified amount
number to State Street Bank and Trust
Company with the information
o Instruct wiring bank to stated to the left.
transmit the specified amount
to:
State Street Bank and
Trust Company
Boston, Massachusetts
ABA Number 011000028
DDA #9902-810-2
Attention: Money Market Series
Institutional Shares
Account (name(s) in which
registered)
Account Number and amount
invested in each fund
o Complete a purchase
application and send it to us
at the address below
------------------------------------------------------------------------------------------
By mail or o Fill out and sign a purchase o Send a check and a letter
express application with your name, account number,
(see below) the full name of the fund and
o Send it to us at the address class, and your investment
below, along with an investment instructions to us at the
check address below
------------------------------------------------------------------------------------------
</TABLE>
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[ICON] Regular, express, registered, or certified mail:
Scudder Service Corporation, c/o Kemper Service Company, Institutional Funds
Client Services, 222 South Riverside Plaza, 33rd Floor, Chicago, IL 60606
Fax number: 1-800-537-9960
E-Mail address: [email protected]
--------------------------------------------------------------------------------
13
<PAGE>
How to Sell Shares
Use these instructions to sell shares in an account opened directly with
Scudder.
--------------------------------------------------------------------------------
Selling shares
--------------------------------------------------------------------------------
By Expedited If Expedited Redemption Service has been elected on the
Redemption Purchase Application on file with the Transfer Agent,
Service redemption of shares may be requested by:
o telephoning Client Services at 1-800-537-3177
o faxing a request to 1-800-537-9960
--------------------------------------------------------------------------------
By mail Write a letter that includes:
or express
o the fund, class, and account number from which you want to
sell shares
o the dollar amount or number of shares you want to sell
o your name(s), signature(s), and address, as they appear on
your account
o a daytime telephone number
Mail the letter to:
Scudder Service Corporation
c/o Kemper Service Company
Institutional Funds Client Services
222 South Riverside Plaza, 33rd Floor
Chicago, IL 60606
--------------------------------------------------------------------------------
14
<PAGE>
--------------------------------------------------------------------------------
[ICON] Questions? You can speak to a Scudder institutional service
representative between 8:30 a.m. and 6 p.m. Eastern time on any fund
business day by calling 1-800-537-3177.
--------------------------------------------------------------------------------
Policies You Should Know About
Along with the instructions on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on dividends
and taxes, applies to all investors, including those investing through
investment providers.
If you are investing through a third-party provider, check the materials you got
from them. As a general rule, you should follow the information in those
materials wherever it contradicts the information given here. Please note that a
third-party provider may charge its own fees.
Policies about transactions
The fund is open for business whenever the New York Stock Exchange is open. The
fund calculates its share price every business day at 5 p.m. Eastern time, but
sometimes earlier, as in the case of scheduled half-day trading or unscheduled
suspensions of trading. Orders received between 4 p.m. and 5 p.m. Eastern time
may be rejected based on certain guidelines described in the Statement of
Additional Information.
You can place an order to buy or sell shares at any time. Once your order is
received by Scudder Service Corporation or its agent, and they have determined
that it is a "good order," it will be processed at the next share price
calculated. Wire purchase orders that arrive, are accepted, and are funded
before 5 p.m. will be processed that day. Those that arrive and are accepted by
5 p.m., but are not funded by that time, will usually be processed the same day
as long as the wire funds arrive before the close of Federal Reserve Wire
System. Expedited Redemption Service orders that arrive before 12:00 noon will
be processed that day, and, if possible, those arriving after noon but before 4
p.m. will be processed that day as well. Expedited Redemption Service is not
available between 4 p.m. and 5 p.m. Eastern time, but redemptions by other
available means may be made until 5 p.m. Eastern time.
15
<PAGE>
Because orders placed through third-party investment providers must be forwarded
to Scudder Service Corporation or its agent before they can be processed, you'll
need to allow extra time. A representative of your investment provider should be
able to tell you when your order will be processed.
Wire investments that arrive by 5 p.m. Eastern time will receive that day's
dividend. Investments you make by other methods will start to accrue dividends
the next business day after your purchase is processed. When you sell shares
with Expedited Redemption Service and we process your order the same day we
receive it, you won't get that day's dividend. In other cases, you will receive
the dividend for the day on which your shares are sold.
When you call us to sell shares, we may record the call, ask you for certain
information, or take other steps designed to prevent fraudulent orders. It's
important to understand that as long as we take reasonable steps to ensure that
an order appears genuine, we are not responsible for any losses that may occur.
Expedited Redemption Service allows you to have proceeds from your sales of fund
shares wired directly to a bank account. To use this service, you'll need to
designate the bank account in advance. Follow the instructions on your
application.
When you want to sell more than $100,000 worth of shares, you don't need a
signature guarantee as long as you want the proceeds wired to a bank account
that's already on file with us. Also, you don't need a signature guarantee for
an exchange. Otherwise, you'll usually need to place your order in writing and
include a signature guarantee. We may also require a signature guarantee in
certain other circumstances.
16
<PAGE>
A signature guarantee is simply a certification of your signature -- a valuable
safeguard against fraud. You can get a signature guarantee from most brokers and
most banks, savings institutions, and credit unions. Note that you can't get a
signature guarantee from a notary public.
With same-day redemptions through Expedited Redemption Service, money from
shares you sell is normally sent out the same day we receive your order. Money
from other orders is normally sent out within one business day of when your
order is processed (not when it is received), although it could be delayed for
up to seven days. There are also two circumstances when it could be longer: when
you are selling shares you bought recently by check and that check hasn't
cleared yet (maximum delay: 15 days) or when unusual circumstances prompt the
SEC to allow further delays.
How the fund calculates share price
The share price for the fund's Institutional Shares is the net asset value per
share, or NAV. To calculate the NAV for this share class, the fund uses the
following equation:
TOTAL ASSETS - TOTAL LIABILITIES
----------------------------------- = NAV
TOTAL NUMBER OF SHARES OUTSTANDING
In valuing securities, we typically use the amortized cost method (the method
used by most money market funds). However, when a market price isn't available,
or when we have reason to believe it doesn't represent market realities, we may
use fair value methods approved by the fund's Board. In such a case, the fund's
value for a security is likely to be different from the quoted market price.
17
<PAGE>
Other rights we reserve
You should be aware that we may do any of the following:
o withhold 31% of your distributions as federal income tax if we have
been notified by the IRS that you are subject to backup withholding, or
if you fail to provide us with a correct taxpayer ID number or
certification that you are exempt from backup withholding
o close your account and send you the proceeds if your balance falls
below $1,000,000 for at least 30 days; we will give you 60 days' notice
so you can either increase your balance or close your account (these
policies don't apply to retirement accounts)
o reject a new account application if you don't provide a correct Social
Security or other tax ID number; if the account has already been
opened, we may give you 30 days' notice to provide the correct number
o change, add, or withdraw various services, fees, and account policies
o reject or limit purchases of shares for any reason
o pay you for shares you sell by "redeeming in kind," that is, by giving
you marketable securities (which typically will involve brokerage costs
for you to liquidate) rather than cash; in most cases, a fund won't
make a redemption-in-kind unless your requests over a 90-day period
total more than $250,000 or 1% of the fund's assets, whichever is less.
18
<PAGE>
--------------------------------------------------------------------------------
[ICON] Because each shareholder's tax situation is unique, it's always a good
idea to ask your tax professional about the tax consequences of your
investments, including any state and local tax consequences.
--------------------------------------------------------------------------------
Understanding Distributions and Taxes
By law, a mutual fund is required to pass through to its shareholders virtually
all of its net earnings. A fund can earn money in two ways: by receiving
interest, dividends or other income from securities it holds, and by selling
securities for more than it paid for them. (A fund's earnings are separate from
any gains or losses stemming from your own purchases and sales of shares.) A
fund may not always pay a distribution for a given period.
The fund intends to declare income dividends daily, and pay them monthly. The
fund may take into account capital gains and losses (other than net long-term
capital gains) in its daily dividend declarations. The fund may make additional
distributions for tax purposes, if necessary.
You can choose how to receive your dividends and distributions. You can have
them all automatically reinvested in fund shares, sent to you by check or wired
to your bank account of record. Tell us your preference on your application. If
you don't indicate a preference, your dividends and distributions will all be
reinvested. For retirement plans, reinvestment is the only option.
19
<PAGE>
The tax status of the fund earnings you receive, and your own fund transactions,
generally depends on which type of transaction is involved. The following tables
show the usual tax status of transactions in fund shares as well as that of any
taxable distributions from the fund:
Generally taxed at ordinary income rates
------------------------------------------------------------------
o short-term capital gains from selling fund shares
------------------------------------------------------------------
o taxable income dividends you receive from the fund
------------------------------------------------------------------
o short-term capital gains distributions you receive from the fund
------------------------------------------------------------------
Generally taxed at capital gains rates
------------------------------------------------------------------
o long-term capital gains from selling fund shares
------------------------------------------------------------------
o long-term capital gains distributions you receive from the fund
------------------------------------------------------------------
Because the fund seeks to maintain a stable share price, you are unlikely to
have a capital gain or loss when you sell fund shares. For tax purposes, an
exchange is the same as a sale.
The fund will send you detailed tax information every January. These statements
tell you the amount and the tax category of any dividends or distributions you
received. They also have certain details on your purchases and sales of shares.
The tax status of dividends and distributions is the same whether you reinvest
them or not. Dividends or distributions declared in the last quarter of a given
year are taxed in that year, even though you may not receive the money until the
following January.
<PAGE>
Notes
<PAGE>
Notes
<PAGE>
Notes
<PAGE>
To Get More Information
Shareholder reports -- These include detailed performance figures, a list of
everything the fund owns, and the fund's financial statements. Shareholders get
these reports automatically. To reduce costs, we mail one copy per customer. For
more copies, call 1-800-537-3177.
Statement of Additional Information (SAI) -- This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
If you'd like to ask for copies of these documents, or if you're a shareholder
and have questions, please contact Scudder or the SEC (see below). Materials you
get from Scudder are free; those from the SEC involve a copying fee. If you
like, you can look over these materials in person at the SEC's Public Reference
Room in Washington, DC or request them electronically at [email protected]
Scudder Kemper Investments, Inc. SEC
222 S. Riverside Plaza, 33rd Floor 450 Fifth Street, N.W.
Attn: Institutional Funds Client Washington, DC
Services Chicago, IL 60606 20549-6009
1-800-537-3177 1-202-942-8090
http://institutionalfunds.scudder.com www.sec.gov
e-mail: [email protected]
SEC File Number 811-3495
<PAGE>
SCUDDER
INVESTMENTS (SM)
[LOGO]
--------------------------------------------------------------------------------
MONEY MARKET
--------------------------------------------------------------------------------
Scudder Money Market Series
Managed Shares
Fund #023
Prospectus
August 14, 2000
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
<PAGE>
Scudder Money Market Series
How the fund works
2 Investment Approach
3 Main Risks to Investors
4 The Fund's Track Record
5 How Much Investors Pay
6 Other Policies and Risks
7 Who Manages and Oversees the Fund
11 Financial Highlights
How to invest in the fund
13 How to Buy Shares
14 How to Exchange or Sell Shares
15 Policies You Should Know About
20 Understanding Distributions and Taxes
<PAGE>
How the fund works
On the next few pages, you'll find information about this fund's investment
goal, the main strategies it uses to pursue that goal, and the main risks that
could affect its performance.
Whether you are considering investing in the fund or are already a shareholder,
you'll probably want to look this information over carefully. You may want to
keep it on hand for reference as well.
Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. This fund's
share price isn't guaranteed, so be aware that you could lose money.
You can access all Scudder fund prospectuses
online at: www.scudder.com
<PAGE>
--------------------------------------------------------------------------------
ticker symbol | MCAXX fund number | 023
Scudder Money Market Series
--------------------------------------------------------------------------------
Investment Approach
The fund seeks as high a level of current income as is consistent with
liquidity, preservation of capital, and the fund's investment policies. It does
this by investing exclusively in high quality short-term securities as well as
certain repurchase agreements.
The fund may buy securities from many types of issuers, including the U.S.
government, banks (both U.S. banks and U.S. branches of foreign banks),
corporations, and municipalities. The fund may invest more than 25% of total
assets in bank obligations. However, everything the fund buys must meet the
rules for money market fund investments (see sidebar). In addition, the fund
currently intends to only buy securities that are in the top credit grade for
short-term debt securities.
Working in conjunction with a credit analyst, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as credit quality, economic
outlooks, and possible interest rate movements. The managers may adjust the
fund's exposure to interest rate risk, typically seeking to take advantage of
possible rises in interest rates and to preserve yield when interest rates
appear likely to fall.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
MONEY FUND RULES
To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:
o individual securities must have remaining maturities of no more than 397 days
o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days
o all securities must be in the top two credit grades for short-term debt
securities and denominated in U.S. dollars
--------------------------------------------------------------------------------
2
<PAGE>
--------------------------------------------------------------------------------
[ICON] This fund may make sense for investors who are in a moderate to high
tax bracket and who are looking for the income, liquidity and stability
that a money fund is designed to offer.
--------------------------------------------------------------------------------
Main Risks to Investors
There are several risk factors that could reduce the yield you get from the fund
or make it perform less well than other investments. Although the fund seeks to
preserve the value of your investment at $1.00 per share, you could lose money
by investing in the fund.
As with most money market funds, the most important factor is market interest
rates. The fund's yield tends to reflect current interest rates, which means
that when these rates fall, the fund's yield generally falls as well.
A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. To the
extent that the fund emphasizes certain sectors of the short-term securities
market, the fund increases its exposure to factors affecting these sectors. For
example, banks' repayment abilities could be compromised by broad economic
declines or sharp rises in interest rates. Securities from foreign banks may
have greater credit risk than comparable U.S. securities, for reasons ranging
from political and economic uncertainties to less stringent banking regulations.
Other factors that could affect performance include:
o the managers could be wrong in their analysis of interest rate trends or
credit quality
o the counterparty to a repurchase agreement or other transaction could default
on its obligations
o securities that rely on third-party insurers to raise their credit quality
could fall in price or go into default if the financial condition of the
insurer deteriorates
3
<PAGE>
--------------------------------------------------------------------------------
[ICON] While a fund's past performance isn't necessarily a sign of how it will
do in the future, it can be valuable for an investor to know. This page
looks at fund performance two different ways: year by year and over
time.
--------------------------------------------------------------------------------
The Fund's Track Record
The bar chart shows how the total returns for the fund's Managed Shares have
varied from year to year, which may give some idea of risk. The table shows how
the class's returns over different periods average out. All figures on this page
assume reinvestment of dividends and distributions.
--------------------------------------------------------------------------------
Annual Total Returns (%) as of 12/31 each year
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
--------------------------------------------------------------------------------
`90 `91 `92 `93 `94 `95 `96 `97 `98 `99
--------------------------------------------------------------------------------
2000 Total Return as of June 30:
Best Quarter: Worst Quarter:
--------------------------------------------------------------------------------
Average Annual Total Returns (%) as of 12/31/1999
--------------------------------------------------------------------------------
1 Year 5 Years 10 Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To find out the current seven-day yield for the fund's Managed Shares, call
1-800-SCUDDER.
Total returns for 1990 through 1999 would have been lower if operating expenses
hadn't been maintained.
4
<PAGE>
How Much Investors Pay
This fund has no sales charges or other shareholder fees. The fund does have
annual operating expenses, and as a shareholder you pay them indirectly.
This table shows fees for the fund's Managed Shares.
--------------------------------------------------------------------------------
Fee Table
--------------------------------------------------------------------------------
Shareholder Fees (paid directly from your investment) None
--------------------------------------------------------------------------------
Annual Operating Expenses (deducted from fund assets)
--------------------------------------------------------------------------------
Management Fee
--------------------------------------------------------------------------------
Distribution (12b-1) Fee
--------------------------------------------------------------------------------
Other Expenses
--------------------------------------------------------------------------------
Fund Administrative Fee %
--------------------------------------------------------------------------------
Other Fund Expenses*
-------
--------------------------------------------------------------------------------
Total Annual Operating Expenses
--------------------------------------------------------------------------------
Fee Waiver
-------
--------------------------------------------------------------------------------
Net Annual Operating Expenses**
--------------------------------------------------------------------------------
* Includes such expenses as taxes, brokerage, interest and fees and expenses of
Board members not affiliated with Scudder Kemper (including fees and expenses
of their independent counsel).
** By contract the adviser has reduced its management fee by 0.05% through
9/30/2001. From time to time, the adviser may voluntarily waive an additional
portion of its management fee.
5
<PAGE>
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
Based on the costs above [including one year of reduced expenses in each period
due to the contractual management fee waiver], this example is designed to help
you compare the expenses of the fund's Managed Shares to those of other funds.
The example assumes operating expenses remain the same and that you invested
$10,000, earned 5% annual returns, reinvested all dividends and distributions,
and sold your shares at the end of each period. This is only an example; your
actual expenses will be different.
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
6
<PAGE>
Other Policies and Risks
While the previous pages describe the main points of the fund's strategy and
risks, there are a few other issues to know about:
o Although major changes tend to be infrequent, the fund's Board could change
the fund's investment goal without seeking shareholder approval.
o The fund's investment adviser establishes a security's credit grade when it
buys securities, using independent ratings or, for unrated securities, its
own credit analysis. If a security's credit quality falls, the security will
be sold unless the adviser or the Board believes this would not be in the
shareholders' best interests.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
fund.
If you want more information on the fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to request
a copy of the SAI (the back cover has information on how to do this).
Keep in mind that there is no assurance that any mutual fund will achieve its
goal.
--------------------------------------------------------------------------------
7
<PAGE>
--------------------------------------------------------------------------------
[ICON] Scudder Kemper, the company with overall responsibility for managing
the fund, takes a team approach to asset management.
--------------------------------------------------------------------------------
Who Manages and Oversees the Fund
The investment adviser
The fund's investment adviser is Scudder Kemper Investments, Inc., located at
345 Park Avenue, New York, NY. Scudder Kemper has more than 80 years of
experience managing mutual funds, and currently has more than $290 billion in
assets under management.
The fund is managed by a team of investment professionals, who individually
represent different areas of expertise and who together develop investment
strategies and make buy and sell decisions. Supporting the fund managers are
Scudder Kemper's many economists, research analysts, traders, and other
investment specialists, located in offices across the United States and around
the world.
As payment for serving as investment adviser, Scudder Kemper receives a
management fee from the fund. For the most recent fiscal year end, the actual
amount the fund paid in management fees was --% of average daily net assets.
The portfolio managers
The following people handle the fund's day-to-day management.
Frank J. Rachwalski, Jr. Dean Meddaugh
Lead Portfolio Manager o Began investment career
o Began investment career in 1994
in 1973 o Joined the adviser in 1996
o Joined the adviser in 1973 o Joined the fund team
o Joined the fund team in 1998
in 1998
8
<PAGE>
Administrative fee
The fund has entered into an administrative services agreement with Scudder
Kemper Investments, Inc. Pursuant to this agreement, Scudder Kemper will provide
or pay others to provide substantially all of the administrative services
required by the fund in exchange for the payment by the class of a fixed fee
rate of --% of average daily net assets. Such an administrative fee will enable
investors to determine with greater certainty the expense level that the fund
will experience, and, for the term of the administrative services agreement,
will transfer substantially all of the risk of increased cost to Scudder Kemper.
The initial term of the administrative agreement is three years.
Scudder Kemper will not bear certain fund expenses under the administrative
services agreement, such as taxes, brokerage, interest, extraordinary expenses
and the fees and expenses of the independent trustees of the fund's Board
(including the fees and expenses of their independent counsel). In addition, the
fund will continue to pay the fees required by its investment management
agreement with Scudder Kemper.
9
<PAGE>
The Board
A mutual fund's Board is responsible for the general oversight of the fund's
business. A majority of the Board is not affiliated with Scudder Kemper. These
independent trustees have primary responsibility for assuring that the fund is
managed in the best interests of its shareholders. The following people comprise
the fund's Board:
Linda C. Coughlin Joan E. Spero
o Managing Director, Scudder o President, Doris Duke
Kemper Investments, Inc. Charitable Foundation
o President of the fund Jean G. Stromberg
Henry P. Becton, Jr. o Consultant
o President and General Jean C. Tempel
Manager, WGBH Educational o Venture Partner, Internet
Foundation Capital Group (Internet
Dawn-Marie Driscoll holding company)
o Executive Fellow, Center Steven Zaleznick
for Business Ethics, o President and Chief
Bentley College Executive Officer, AARP
o President, Driscoll Services, Inc.
Associates (consulting
firm)
Edgar Fiedler
o Senior Fellow and Economic
Counsellor, The Conference
Board, Inc.
Keith R. Fox
o Private Equity Investor
o President, Exeter Capital
Management Corporation
10
<PAGE>
Financial Highlights
This table is designed to help you understand the financial performance of the
fund's Managed Shares in recent years. The figures in the first part of the
table are for a single share. The total return figures represent the percentage
that an investor in Managed Shares of the fund would have earned (or lost),
assuming all dividends and distributions were reinvested. This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statements, is included in the annual report (see "Shareholder
reports" on the back cover).
Scudder Money Market Series -- Managed Shares (a)
(To be updated)
11
<PAGE>
How to invest in the fund
The following pages tell you how to invest in this fund and what to expect as a
shareholder. If you're investing directly with Scudder, all of this information
applies to you.
If you're investing through a "third party provider" -- for example, a brokerage
firm or bank -- your provider may have its own policies or instructions, and you
should follow those.
12
<PAGE>
How to Buy Shares
Use these instructions to invest directly with Scudder. Make out your check to
"The Scudder Funds."
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
First investment Additional investments
-------------------------------------------------------------------------------------------------
<S> <C> <C>
$100,000 or more for all accounts $1,000 or more for regular
accounts
$100 or more for IRAs
$50 or more with an Automatic
Investment Plan
-------------------------------------------------------------------------------------------------
By mail or o Fill out and sign an application o Send a check and a Scudder
express investment slip to us at the
(see below) o Send it to us at the appropriate appropriate address below
address, along with an
investment check o If you don't have an investment
slip, simply include a letter
with your name, account number, the
full name of the fund and class,
and your investment instructions
-------------------------------------------------------------------------------------------------
By wire o Call 1-800-SCUDDER for o Call 1-800-SCUDDER for
instructions instructions
-------------------------------------------------------------------------------------------------
By phone -- o Call 1-800-SCUDDER for
instructions
-------------------------------------------------------------------------------------------------
With an automatic -- o To set up regular investments
investment from a bank checking account,
plan call 1-800-SCUDDER
-------------------------------------------------------------------------------------------------
Using QuickBuy -- o Call 1-800-SCUDDER
-------------------------------------------------------------------------------------------------
On the Internet o Go to the "funds and prices" o Call 1-800-SCUDDER to ensure
section at www.scudder.com you have enabled electronic
services
o Access and print out an o Go to www.scudder.com and
on-line prospectus and a new register
account application
o Follow instructions for
o Complete and return the buying shares with money from
application with your check your bank account
-------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
[ICON] Regular mail:
The Scudder Funds, PO Box 2291, Boston, MA 02107-2291
Express, registered or certified mail:
The Scudder Funds, 66 Brooks Drive, Braintree, MA 02184-3839
Fax number: 1-800-821-6234 (for exchanging and selling only)
--------------------------------------------------------------------------------
13
<PAGE>
How to Exchange or Sell Shares
Use these instructions to exchange or sell shares in an account opened directly
with Scudder.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Exchanging into another fund Selling shares
-----------------------------------------------------------------------------------
<S> <C> <C>
To open a new account: same Some transactions, including
minimum as for a new investment most for over $100,000, can
only be ordered in writing; if
For exchanges between existing you're in doubt, see page 18
accounts: $1,000 or more
-----------------------------------------------------------------------------------
By phone or wire o Call 1-800-SCUDDER for o Call 1-800-SCUDDER for
instructions instructions
-----------------------------------------------------------------------------------
Using SAIL(TM) o Call 1-800-343-2890 and o Call 1-800-343-2890 and
follow the instructions follow the instructions
-----------------------------------------------------------------------------------
By mail, Write a letter that includes: Write a letter that includes:
express, or fax
(see previous o the fund, class, and account o the fund, class, and account
page) number you're exchanging out number from which you want to
of sell shares
o the dollar amount or number o the dollar amount or number
of shares you want to exchange of shares you want to sell
o the name and class of the o your name(s), signature(s),
fund you want to exchange into and address, as they appear on
your account
o your name(s), signature(s),
and address, as they appear o a daytime telephone number
on your account
o a daytime telephone number
-----------------------------------------------------------------------------------
With an automatic -- o To set up regular cash
withdrawal payments from a Scudder fund
plan account, call 1-800-SCUDDER
-----------------------------------------------------------------------------------
Using QuickSell -- o Call 1-800-SCUDDER
-----------------------------------------------------------------------------------
Using -- o Call 1-800-SCUDDER
Checkwriting
-----------------------------------------------------------------------------------
On the Internet o Go to www.scudder.com and --
register
o Follow instructions for making
on-line changes
-----------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
--------------------------------------------------------------------------------
[ICON] Questions? You can speak to a Scudder representative between 8 a.m. and
8 p.m. Eastern time on any fund business day by calling 1-800-SCUDDER.
--------------------------------------------------------------------------------
Policies You Should Know About
Along with the instructions on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on dividends
and taxes, applies to all investors, including those investing through
investment providers.
If you are investing through an investment provider, check the materials you got
from them. As a general rule, you should follow the information in those
materials wherever it contradicts the information given here. Please note that
an investment provider may charge its own fees.
Policies about transactions
The fund is open for business whenever the New York Stock Exchange is open. The
fund calculates its share price every business day at 5 p.m. Eastern time, but
sometimes earlier, as in the case of scheduled half-day trading or unscheduled
suspensions of trading. Orders received between 4 p.m. and 5 p.m. Eastern time
may be rejected based on certain guidelines described in the Statement of
Additional Information
You can place an order to buy or sell shares at any time. Once your order is
received by Scudder Service Corporation, and they have determined that it is a
"good order," it will be processed at the next share price calculated.
Because orders placed through investment providers must be forwarded to Scudder
Service Corporation before they can be processed, you'll need to allow extra
time. A representative of your investment provider should be able to tell you
when your order will be processed.
15
<PAGE>
Wire investments that arrive by 5 p.m. Eastern time will receive that day's
dividend. Investments you make by other methods will start to accrue dividends
the next business day after your purchase is processed. However, redemption by
wire is not available after 4 p.m. Eastern time, but redemptions by other
available means may be made until 5 p.m. Eastern time.
16
<PAGE>
--------------------------------------------------------------------------------
[ICON] The Scudder Web site can be a valuable resource for shareholders with
Internet access. Go to www.scudder.com to get up-to-date information,
review balances or even place orders for exchanges.
--------------------------------------------------------------------------------
SAIL(TM), the Scudder Automated Information Line, is available 24 hours a day by
calling 1-800-343-2890. You can use SAIL to get information on Scudder funds
generally and on accounts held directly at Scudder. You can also use it to make
exchanges and sell shares.
QuickBuy and QuickSell let you set up a link between a Scudder account and a
bank account. Once this link is in place, you can move money between the two
with a phone call. You'll need to make sure your bank has Automated Clearing
House (ACH) services. To set up QuickBuy or QuickSell on a new account, see the
account application; to add it to an existing account, call 1-800-SCUDDER.
Checkwriting lets you sell fund shares by writing a check. Your investment keeps
earning dividends until your check clears. Please note that with this fund, you
should not write checks for less than $1,000. Note as well that we can't honor
any check larger than your balance at the time the check is presented to us, or
any check for more than $5,000,000. It's not a good idea to close out an account
using a check because the account balance could change between the time you
write the check and the time it is processed.
When you call us to sell shares, we may record the call, ask you for certain
information, or take other steps designed to prevent fraudulent orders. It's
important to understand that as long as we take reasonable steps to ensure that
an order appears genuine, we are not responsible for any losses that may occur.
When you ask us to send or receive a wire, please note that while we don't
charge a fee to receive wires, we will deduct a $5 fee from all wires sent from
us to your bank. Your bank may charge its own fees for handling wires. The funds
can only accept wires of $100 or more.
17
<PAGE>
Exchanges among Scudder funds are an option for shareholders who bought their
shares directly from Scudder and for many other investors as well. Exchanges are
a shareholder privilege, not a right: we may reject or limit any exchange order,
particularly when there appears to be a pattern of "market timing" or other
frequent purchases and sales. We may also reject or limit purchase orders, for
these or other reasons.
When you want to sell more than $100,000 worth of shares, you'll usually need to
place your order in writing and include a signature guarantee. The only
exception is if you want money wired to a bank account that is already on file
with us; in that case, you don't need a signature guarantee. Also, you don't
need a signature guarantee for an exchange, although we may require one in
certain other circumstances.
A signature guarantee is simply a certification of your signature -- a valuable
safeguard against fraud. You can get a signature guarantee from most brokers and
most banks, savings institutions, and credit unions. Note that you can't get a
signature guarantee from a notary public.
Money from shares you sell is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are also two circumstances when it could be longer:
when you are selling shares you bought recently by check and that check hasn't
cleared yet (maximum delay: 15 days) or when unusual circumstances prompt the
SEC to allow further delays.
How the fund calculates share price
The share price for the fund's Managed Shares is the net asset value per share,
or NAV. To calculate NAV, the fund uses the following equation:
TOTAL ASSETS - TOTAL LIABILITIES
---------------------------------- = NAV
TOTAL NUMBER OF SHARES OUTSTANDING
18
<PAGE>
--------------------------------------------------------------------------------
[ICON] If you ever have difficulty placing an order by phone or fax, you can
always send us your order in writing.
--------------------------------------------------------------------------------
In valuing securities, we typically use the amortized cost method (the method
used by most money market funds). However, when a market price isn't available,
or when we have reason to believe it doesn't represent market realities, we may
use fair value methods approved by the fund's Board. In such a case, the fund's
value for a security is likely to be different from the quoted market price.
Other rights we reserve
You should be aware that we may do any of the following:
o withhold 31% of your distributions as federal income tax if we have been
notified by the IRS that you are subject to backup withholding, or if you
fail to provide us with a correct taxpayer ID number or certification that
you are exempt from backup withholding
o close your account and send you the proceeds if your balance falls below
$100,000 for at least 30 days; we will give you 60 days' notice so you can
either increase your balance or close your account (these policies don't
apply to retirement accounts)
o reject a new account application if you don't provide a correct Social
Security or other tax ID number; if the account has already been opened, we
may give you 30 days' notice to provide the correct number
o change, add, or withdraw various services, fees, and account policies (for
example, we may change or terminate the exchange privilege at any time)
o pay you for shares you sell by "redeeming in kind," that is, by giving you
marketable securities (which typically will involve brokerage costs for you
to liquidate) rather than cash; in most cases, a fund won't make a
redemption-in-kind unless your requests over a 90-day period total more than
$250,000 or 1% of the fund's assets, whichever is less
19
<PAGE>
--------------------------------------------------------------------------------
[ICON] Because each shareholder's tax situation is unique, it's always a good
idea to ask your tax professional about the tax consequences of your
investments, including any state and local tax consequences.
--------------------------------------------------------------------------------
Understanding Distributions and Taxes
By law, a mutual fund is required to pass through to its shareholders virtually
all of its net earnings. A fund can earn money in two ways: by receiving
interest, dividends or other income from securities it holds, and by selling
securities for more than it paid for them. (A fund's earnings are separate from
any gains or losses stemming from your own purchases and sales of shares.) A
fund may not always pay a distribution for a given period.
The fund intends to declare income dividends daily, and pay them monthly. The
fund may take into account capital gains and losses (other than net long-term
capital gains) in its daily dividend declarations. The fund may make additional
distributions for tax purposes, if necessary.
You can choose how to receive your dividends and distributions. You can have
them all automatically reinvested in fund shares or all sent to you by check.
Tell us your preference on your application. If you don't indicate a preference,
your dividends and distributions will all be reinvested. For retirement plans,
reinvestment is the only option.
20
<PAGE>
The tax status of the fund earnings you receive, and your own fund transactions,
generally depends on which type of transaction is involved. The following tables
show the usual tax status of transactions in fund shares as well as that of any
taxable distributions from the fund:
Generally taxed at ordinary income rates
--------------------------------------------------------------------------------
o short-term capital gains from selling fund shares
--------------------------------------------------------------------------------
o taxable income dividends you receive from the fund
--------------------------------------------------------------------------------
o short-term capital gains distributions you receive from the fund
--------------------------------------------------------------------------------
Generally taxed at capital gains rates
--------------------------------------------------------------------------------
o long-term capital gains from selling fund shares
--------------------------------------------------------------------------------
o long-term capital gains distributions you receive from the fund
--------------------------------------------------------------------------------
Because the fund seeks to maintain a stable share price, you are unlikely to
have a capital gain or loss when you sell fund shares. For tax purposes, an
exchange is the same as a sale.
The fund will send you detailed tax information every January. These statements
tell you the amount and the tax category of any dividends or distributions you
received. They also have certain details on your purchases and sales of shares.
The tax status of dividends and distributions is the same whether you reinvest
them or not. Dividends or distributions declared in the last quarter of a given
year are taxed in that year, even though you may not receive the money until the
following January.
21
<PAGE>
Notes
<PAGE>
Notes
<PAGE>
Notes
<PAGE>
To Get More Information
Shareholder reports -- These include commentary from the fund's management team
about recent market conditions and the effects of the fund's strategies on its
performance. They also have detailed performance figures, a list of everything
the fund owns, and the fund's financial statements. Shareholders get these
reports automatically. To reduce costs, we mail one copy per household. For more
copies, call 1-800-SCUDDER.
Statement of Additional Information (SAI) -- This tells you more about the
fund's features and policies, including additional risk information. The SAI is
incorporated by reference into this document (meaning that it's legally part of
this prospectus).
If you'd like to ask for copies of these documents, or if you're a shareholder
and have questions, please contact Scudder or the SEC (see below). Materials you
get from Scudder are free; those from the SEC involve a copying fee. If you
like, you can look over these materials in person at the SEC's Public Reference
Room in Washington, DC or request them electronically at [email protected].
Scudder Funds SEC
PO Box 2291 450 Fifth Street, N.W.
Boston, MA 02107-2291 Washington, DC 20549-6009
1-800-SCUDDER 1-202-942-8090
www.scudder.com www.sec.gov
SEC File Number 811-3495
<PAGE>
SCUDDER
INVESTMENTS (SM)
[LOGO]
--------------------------------------------------------------------------------
MONEY MARKET
--------------------------------------------------------------------------------
Money Market Funds
Scudder Tax Free Money Fund
Class S Fund #000
Class AARP Fund #000
Scudder U.S. Treasury Money Fund
Class S Fund #000
Class AARP Fund #000
Scudder Cash Investment Trust
Class S Fund #000
Class AARP Fund #000
Scudder Money Market Series
Premium Class S Fund #000
Premium Class AARP Fund #000
Prime Reserve Class S Fund #000
Prime Reserve Class AARP Fund #000
Prospectus August 14, 2000
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
<PAGE>
Scudder Money Funds
How the funds work
2 Tax Free Money Fund
6 U.S. Treasury Money Fund
10 Cash Investment Trust
14 Money Market Series
20 Other Policies and Risks
21 Who Manages and Oversees the Funds
28 Financial Highlights
How to invest in the funds
35 How to Buy and Sell Class S Shares
37 How to Buy and Sell Class AARP Shares
39 Policies You Should Know About
45 Understanding Distributions and Taxes
<PAGE>
How the funds work
These funds are money funds, meaning that they seek to maintain a stable $1.00
share price to preserve the value of your investment.
Taken as a group, they represent a spectrum of approaches to money fund
investing. One fund invests for income that is free from regular federal income
taxes. Each fund follows its own goal.
Remember that mutual funds are investments, not bank deposits. They're not
insured or guaranteed by the FDIC or any other government agency. Their share
prices aren't guaranteed, so be aware that you could lose money.
You can access all Scudder fund prospectuses
online at: www.scudder.com
<PAGE>
--------------------------------------------------------------------------------
ticker symbols Class S | XXXXX fund numbers | 000
Class AARP | XXXXX | 000
Scudder Tax Free Money Fund
--------------------------------------------------------------------------------
Investment Approach
The fund seeks to provide income exempt from regular federal income tax and
stability of principal through investments in municipal securities. The fund
invests at least 80% of net assets in high quality short-term municipal
securities, the income from which is free from regular federal income tax and
from alternative minimum tax (AMT).
The fund may buy many types of municipal securities, including industrial
development bonds, but all must meet the rules for money market fund investments
(see sidebar). In addition, the fund currently intends to only buy securities
that are in the top credit grade for short-term debt securities.
Working in conjunction with a credit analyst, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as credit quality, economic
outlooks, and possible interest rate movements. The managers may adjust the
fund's exposure to interest rate risk, typically seeking to take advantage of
possible rises in interest rates and to preserve yield when interest rates
appear likely to fall.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
MONEY FUND RULES
To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:
o individual securities must have remaining maturities of no more than 397 days
o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days
o all securities must be in the top two credit grades for short-term debt
securities and denominated in U.S. dollars
--------------------------------------------------------------------------------
2 | Scudder Tax Free Money Fund
<PAGE>
--------------------------------------------------------------------------------
[ICON] This fund may make sense for investors who are in a moderate to high
tax bracket and who are looking for the income, liquidity, and
stability that a money fund is designed to offer.
--------------------------------------------------------------------------------
Main Risks to Investors
There are several risk factors that could reduce the yield you get from the fund
or make it perform less well than other investments. Although the fund seeks to
preserve the value of your investment at $1.00 per share, you could lose money
by investing in the fund.
As with most money market funds, the most important factor is market interest
rates. The fund's yield tends to reflect current interest rates, which means
that when these rates fall, the fund's yield generally falls as well.
A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. To the
extent that the fund emphasizes certain geographic regions or sectors of the
municipal market, the fund increases its exposure to any factors affecting these
regions or sectors. For example, industrial development bonds are typically
backed by revenues from a given facility and by the credit of a private company,
but are not backed by the taxing power of a municipality.
Other factors that could affect performance include:
o the managers could be wrong in their analysis of interest rate trends or
credit quality
o securities that rely on third-party insurers to raise their credit quality
could fall in price or go into default if the financial condition of the
insurer deteriorates
o political or legal actions could change the way the fund's dividends are
taxed
3 | Scudder Tax Free Money Fund
<PAGE>
--------------------------------------------------------------------------------
[ICON] While a fund's past performance isn't necessarily a sign of how it will
do in the future, it can be valuable for an investor to know. This page
looks at fund performance two different ways: year by year and over
time.
--------------------------------------------------------------------------------
The Fund's Track Record
The bar chart shows how the returns of the fund's Class S have varied from year
to year, which may give some idea of risk. On ________, 2000, the outstanding
shares of Scudder Tax Free Money Fund were redesignated Class S. The performance
of the Class S in the bar chart and the performance table reflects the
performance of the Scudder Tax Free Money Fund prior to the redesignation.
Because Class AARP commenced operations less than one year ago, it did not have
at least a full calendar year of performance to report as of the date of this
prospectus. The table shows how the class's returns over different periods
average out. All figures on this page assume reinvestment of dividends and
distributions.
--------------------------------------------------------------------------------
Annual Total Returns (%) as of 12/31 each year Class S
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00
--------------------------------------------------------------------------------
`90 `91 `92 `93 `94 `95 `96 `97 `98 `99
--------------------------------------------------------------------------------
2000 Total Return as of June 30:
Best Quarter: Worst Quarter:
--------------------------------------------------------------------------------
Average Annual Total Returns (%) as of 12/31/1999
--------------------------------------------------------------------------------
1 Year 5 Years 10 Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To find out the fund's current seven-day yield, call 1-800-SCUDDER.
Total returns for 1996 through 1998 would have been lower if operating expenses
hadn't been maintained.
4 | Scudder Tax Free Money Fund
<PAGE>
How Much Investors Pay
This fund has no sales charges or other shareholder fees. The fund does have
annual operating expenses, and as a shareholder you pay them indirectly.
--------------------------------------------------------------------------------
Fee Table Class S Class AARP
--------------------------------------------------------------------------------
Shareholder Fees (paid directly from
your investment) None None
--------------------------------------------------------------------------------
Annual Operating Expenses (deducted from fund assets)
--------------------------------------------------------------------------------
Management Fee
--------------------------------------------------------------------------------
Distribution (12b-1) Fee
--------------------------------------------------------------------------------
Other Expenses
----------------------
--------------------------------------------------------------------------------
Fixed Administrative Fee
--------------------------------------------------------------------------------
Other Fund Operating Expenses*
--------------------------------------------------------------------------------
Total Annual Operating Expenses
--------------------------------------------------------------------------------
Expense Reimbursement
----------------------
--------------------------------------------------------------------------------
Net Annual Operating Expenses**
--------------------------------------------------------------------------------
* Includes such expenses as taxes, brokerage, interest and fees and expenses of
Board members not affiliated with Scudder Kemper (including fees and expenses
of their independent counsel).
** [By contract, total operating expenses are capped at 0.65% through
9/30/2000.]
--------------------------------------------------------------------------------
Expenses Example
--------------------------------------------------------------------------------
Based on the costs above (including one year of capped expenses in each period),
this example is designed to help you compare expenses of each Class to those of
other funds. The example assumes operating expenses remain the same and that you
invested $10,000, earned 5% annual returns, reinvested all dividends and
distributions, and sold your shares at the end of each period. This is only an
example; actual expenses will be different.
1 Year 1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
Class S
--------------------------------------------------------------------------------
Class AARP
--------------------------------------------------------------------------------
5 | Scudder Tax Free Money Fund
<PAGE>
--------------------------------------------------------------------------------
ticker symbols Class S | XXXXX fund numbers | 000
Class AARP | XXXXX | 000
Scudder U.S. Treasury Money Fund
--------------------------------------------------------------------------------
Investment Approach
The fund seeks current income consistent with safety, liquidity, and stability
of capital. It does this by investing at least 80% of total assets in short-term
U.S. Treasury securities or in repurchase agreements backed by these securities.
While the fund may place up to 20% of total assets in other types of
investments, it can only invest in high quality short-term securities that are
guaranteed by the full faith and credit of the U.S. government as to the timely
payment of interest and principal.
Income paid by Treasuries is usually free from state and local income taxes, and
for most fund shareholders the bulk of fund distributions will be free from
these taxes as well (although not from federal income tax).
Working in conjunction with a credit analyst, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as economic outlooks and
possible interest rate movements. The managers may adjust the fund's exposure to
interest rate risk, typically seeking to take advantage of possible rises in
interest rates and to preserve yield when interest rates appear likely to fall.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
MONEY FUND RULES
To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:
o individual securities must have remaining maturities of no more than 397 days
o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days
o all securities must be in the top two credit grades for short-term debt
securities and denominated in U.S. dollars
--------------------------------------------------------------------------------
6 | Scudder U.S. Treasury Money Fund
<PAGE>
--------------------------------------------------------------------------------
[ICON] Investors whose primary concerns are quality and liquidity may want to
consider this fund.
--------------------------------------------------------------------------------
Main Risks to Investors
There are several risk factors that could reduce the yield you get from the fund
or make it perform less well than other investments. Although the fund seeks to
preserve the value of your investment at $1.00 per share, you could lose money
by investing in the fund.
As with most money market funds, the most important factor is market interest
rates. The fund's yield tends to reflect current interest rates, which means
that when these rates fall, the fund's yield generally falls as well.
Because of the fund's high credit standards, its yield may be lower than the
yields of money funds that don't limit their investments to
government-guaranteed securities.
Other factors that could affect performance include:
o the managers could be wrong in their analysis of interest rate trends
o the counterparty to a repurchase agreement or other transaction could default
on its obligations
o political or legal actions could change the way the fund's dividends are
taxed, particularly in certain states or localities
7 | Scudder U.S. Treasury Money Fund
<PAGE>
--------------------------------------------------------------------------------
[ICON] While a fund's past performance isn't necessarily a sign of how it will
do in the future, it can be valuable for an investor to know. This page
looks at fund performance two different ways: year by year and over
time.
--------------------------------------------------------------------------------
The Fund's Track Record
The bar chart shows how the returns of the fund's Class S have varied from year
to year, which may give some idea of risk. On ________, 2000, the outstanding
shares of Scudder U.S. Treasury Money Fund were redesignated as Class S shares.
The performance of the Class S in the bar chart and the performance table
reflects the performance of the Scudder U.S. Treasury Money Fund prior to the
redesignation. Because Class AARP commenced operations less than one year ago,
it did not have at least a full calendar year of performance to report as of the
date of this prospectus. The table shows how the class's returns over different
periods average out. All figures on this page assume reinvestment of dividends
and distributions.
--------------------------------------------------------------------------------
Annual Total Returns (%) as of 12/31 each year Class S
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00
--------------------------------------------------------------------------------
`90 `91 `92 `93 `94 `95 `96 `97 `98 `99
--------------------------------------------------------------------------------
2000 Total Return as of June 30:
Best Quarter: Worst Quarter:
--------------------------------------------------------------------------------
Average Annual Total Returns (%) as of 12/31/1999
--------------------------------------------------------------------------------
1 Year 5 Years 10 Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To find out the fund's current seven-day yield, call 1-800-SCUDDER.
Total returns for 1991 through 1998 would have been lower if operating expenses
hadn't been maintained.
8 | Scudder U.S. Treasury Money Fund
<PAGE>
How Much Investors Pay
This fund has no sales charges or other shareholder fees. The fund does have
annual operating expenses, and as a shareholder you pay them indirectly.
--------------------------------------------------------------------------------
Fee Table Class S Class AARP
--------------------------------------------------------------------------------
Shareholder Fees (paid directly from
your investment) None None
--------------------------------------------------------------------------------
Annual Operating Expenses (deducted from fund assets)
--------------------------------------------------------------------------------
Management Fee
--------------------------------------------------------------------------------
Distribution (12b-1) Fee
--------------------------------------------------------------------------------
Other Expenses
----------------------
--------------------------------------------------------------------------------
Fixed Administrative Fee
--------------------------------------------------------------------------------
Other Fund Operating Expenses*
--------------------------------------------------------------------------------
Total Annual Operating Expenses
--------------------------------------------------------------------------------
Expense Reimbursement
----------------------
--------------------------------------------------------------------------------
Net Annual Operating Expenses**
--------------------------------------------------------------------------------
* Includes such expenses as taxes, brokerage, interest and fees and expenses of
Board members not affiliated with Scudder Kemper (including fees and expenses
of their independent counsel).
** [By contract, total operating expenses are capped at 0.65% through
9/30/2000.]
--------------------------------------------------------------------------------
Expenses Example
--------------------------------------------------------------------------------
Based on the costs above (including one year of capped expenses in each period),
this example is designed to help you compare expenses of each Class to those of
other funds. The example assumes operating expenses remain the same and that you
invested $10,000, earned 5% annual returns, reinvested all dividends and
distributions, and sold your shares at the end of each period. This is only an
example; actual expenses will be different.
1 Year 1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
Class S
--------------------------------------------------------------------------------
Class AARP
--------------------------------------------------------------------------------
9 | Scudder U.S. Treasury Money Fund
<PAGE>
--------------------------------------------------------------------------------
ticker symbols Class S | XXXXX fund numbers | 000
Class AARP | XXXXX | 000
Scudder Cash Investment Trust
--------------------------------------------------------------------------------
Investment Approach
The fund seeks to maintain stability of capital and, consistent with that, to
maintain liquidity of capital and to provide current income. It does this by
investing exclusively in high quality short-term securities.
The fund may buy securities from many types of issuers, including the U.S.
government, banks, corporations, and municipalities. However, everything the
fund buys must meet the rules for money market fund investments (see sidebar).
In addition, the fund currently intends to only buy securities that are in the
top credit grade for short-term debt securities.
Working in conjunction with a credit analyst, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as credit quality, economic
outlooks, and possible interest rate movements. The managers may adjust the
fund's exposure to interest rate risk, typically seeking to take advantage of
possible rises in interest rates and to preserve yield when interest rates
appear likely to fall.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
MONEY FUND RULES
To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:
o individual securities must have remaining maturities of no more than 397 days
o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days
o all securities must be in the top two credit grades for short-term debt
securities and denominated in U.S. dollars
--------------------------------------------------------------------------------
10 | Scudder Cash Investment Trust
<PAGE>
--------------------------------------------------------------------------------
[ICON] This fund, a broadly diversified money fund with an emphasis on credit
quality, could serve investors who want a money fund that's designed to
offer a high level of stability.
--------------------------------------------------------------------------------
Main Risk to Investors
There are several risk factors that could reduce the yield you get from the fund
or make it perform less well than other investments. Although the fund seeks to
preserve the value of your investment at $1.00 per share, you could lose money
by investing in the fund.
As with most money market funds, the most important factor is market interest
rates. The fund's yield tends to reflect current interest rates, which means
that when these rates fall, the fund's yield generally falls as well.
A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. To the
extent that the fund emphasizes certain sectors of the short-term securities
market, the fund increases its exposure to factors affecting these sectors.
Other factors that could affect performance include:
o the managers could be wrong in their analysis of interest rate trends or
credit quality
o securities that rely on third-party insurers to raise their credit quality
could fall in price or go into default if the financial condition of the
insurer deteriorates
11 | Scudder Cash Investment Trust
<PAGE>
--------------------------------------------------------------------------------
[ICON] While a fund's past performance isn't necessarily a sign of how it will
do in the future, it can be valuable for an investor to know. This page
looks at fund performance two different ways: year by year and over
time.
--------------------------------------------------------------------------------
The Fund's Track Record
The bar chart shows how the returns of the fund's Class S have varied from year
to year, which may give some idea of risk. On ________, 2000, the outstanding
shares of Scudder Cash Investment Trust were redesignated as Class S shares. The
performance of the Class S in the bar chart and the performance table reflects
the performance of Scudder Cash Investment Trust prior to the redesignation.
Because Class AARP commenced operations less than one year ago, it did not have
at least a full calendar year of performance to report as of the date of this
prospectus. The table shows how the class's returns over different periods
average out. All figures on this page assume reinvestment of dividends and
distributions.
--------------------------------------------------------------------------------
Annual Total Returns (%) as of 12/31 each year Class S
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00
--------------------------------------------------------------------------------
`90 `91 `92 `93 `94 `95 `96 `97 `98 `99
--------------------------------------------------------------------------------
2000 Total Return as of June 30:
Best Quarter: Worst Quarter:
--------------------------------------------------------------------------------
Average Annual Total Returns (%) as of 12/31/1999
--------------------------------------------------------------------------------
1 Year 5 Years 10 Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To find out the fund's current seven-day yield, call 1-800-SCUDDER.
12 | Scudder Cash Investment Trust
<PAGE>
How Much Investors Pay
This fund has no sales charges or other shareholder fees. The fund does have
annual operating expenses, and as a shareholder you pay them indirectly.
--------------------------------------------------------------------------------
Fee Table Class S Class AARP
--------------------------------------------------------------------------------
Shareholder Fees (paid directly from
your investment) None None
--------------------------------------------------------------------------------
Annual Operating Expenses (deducted from fund assets)
--------------------------------------------------------------------------------
Management Fee
--------------------------------------------------------------------------------
Distribution (12b-1) Fee
--------------------------------------------------------------------------------
Other Expenses
----------------------
--------------------------------------------------------------------------------
Fixed Administrative Fee
--------------------------------------------------------------------------------
Other Fund Operating Expenses*
--------------------------------------------------------------------------------
Total Annual Operating Expenses
--------------------------------------------------------------------------------
Expense Reimbursement
----------------------
--------------------------------------------------------------------------------
Net Annual Operating Expenses**
--------------------------------------------------------------------------------
* Includes such expenses as taxes, brokerage, interest and fees and expenses of
Board members not affiliated with Scudder Kemper (including fees and expenses
of their independent counsel).
** [By contract, total operating expenses are capped at 0.85% through
9/30/2000.]
--------------------------------------------------------------------------------
Expenses Example
--------------------------------------------------------------------------------
Based on the costs above (including one year of capped expenses in each period),
this example is designed to help you compare expenses of each Class to those of
other funds. The example assumes operating expenses remain the same and that you
invested $10,000, earned 5% annual returns, reinvested all dividends and
distributions, and sold your shares at the end of each period. This is only an
example; actual expenses will be different.
1 Year 1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
Class S
--------------------------------------------------------------------------------
Class AARP
--------------------------------------------------------------------------------
13 | Scudder Cash Investment Trust
<PAGE>
--------------------------------------------------------------------------------
ticker symbols Class S | XXXXX fund numbers | 000
Class AARP | XXXXX | 000
Scudder Money Market Series
--------------------------------------------------------------------------------
Investment Approach
The fund seeks as high a level of current income as is consistent with
liquidity, preservation of capital, and the fund's investment policies. It does
this by investing exclusively in high quality short-term securities, as well as
certain repurchase agreements.
The fund may buy securities from many types of issuers, including the U.S.
government, banks (both U.S. banks and U.S. branches of foreign banks),
corporations, and municipalities. The fund may invest more than 25% of total
assets in bank obligations. However, everything the fund buys must meet the
rules for money market fund investments (see sidebar). In addition, the fund
currently intends to only buy securities that are in the top credit grade for
short-term debt securities.
Working in conjunction with a credit analyst, the portfolio managers screen
potential securities and develop a list of those that the fund may buy. The
managers then decide which securities on this list to buy, looking for
attractive yield and weighing considerations such as credit quality, economic
outlooks, and possible interest rate movements. The managers may adjust the
fund's exposure to interest rate risk, typically seeking to take advantage of
possible rises in interest rates and to preserve yield when interest rates
appear likely to fall.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
MONEY FUND RULES
To be called a money market fund, a mutual fund must operate within strict
federal rules. Designed to help maintain a stable $1.00 share price, these rules
limit money funds to particular types of securities and strategies. Some of the
rules:
o individual securities must have remaining maturities of no more than 397 days
o the dollar-weighted average maturity of the fund's holdings cannot exceed 90
days
o all securities must be in the top two credit grades for short-term debt
securities and denominated in U.S. dollars
--------------------------------------------------------------------------------
14 | Scudder Money Market Series
<PAGE>
--------------------------------------------------------------------------------
[ICON] With its higher investment minimums and more restrictive transaction
policies, this fund may be appropriate for investors interested in a
longer term cash investment.
--------------------------------------------------------------------------------
Main Risks to Investors
There are several risk factors that could reduce the yield you get from the fund
or make it perform less well than other investments. Although the fund seeks to
preserve the value of your investment at $1.00 per share, you could lose money
by investing in the fund.
As with most money market funds, the most important factor is market interest
rates. The fund's yield tends to reflect current interest rates, which means
that when these rates fall, the fund's yield generally falls as well.
A second factor is credit quality. If a portfolio security declines in credit
quality or goes into default, it could hurt the fund's performance. To the
extent that the fund emphasizes certain sectors of the short-term securities
market, the fund increases its exposure to factors affecting these sectors. For
example, banks' repayment abilities could be compromised by broad economic
declines or sharp rises in interest rates. Securities from foreign banks may
have greater credit risk than comparable U.S. securities, for reasons ranging
from political and economic uncertainties to less stringent banking regulations.
Other factors that could affect performance include:
o the managers could be wrong in their analysis of interest rate trends or
credit quality
o the counterparty to a repurchase agreement or other transaction could default
on its obligations
o securities that rely on third-party insurers to raise their credit quality
could fall in price or go into default if the financial condition of the
insurer deteriorates
15 | Scudder Money Market Series
<PAGE>
--------------------------------------------------------------------------------
[ICON] While a fund's past performance isn't necessarily a sign of how it will
do in the future, it can be valuable for an investor to know. This page
looks at fund performance two different ways: year by year and over
time.
--------------------------------------------------------------------------------
The Fund's Track Record
The bar chart shows how the total returns for the fund's Premium Class S* have
varied from year to year, which may give some idea of risk. On ________, 2000,
Scudder Premium Money Market Shares and Scudder Prime Reserve Money Market
Shares were redesignated as Premium Class S shares and Prime Reserve Class S
shares, respectively. The performance of the Premium Class S shares in the bar
chart and the performance table reflects the performance of the fund's class
formerly known as Premium Money Market Shares. The performance of the Prime
Reserve Class S in the performance table reflects the performance of the fund's
class formerly known as Prime Reserve Money Market Shares. Because Premium Class
AARP and Prime Reserve Class AARP commenced operations less than one year ago,
they do not have at least a full calendar year of performance to report as of
the date of this prospectus. The table shows how the classes' returns over
different periods average out. All figures on this page assume reinvestment of
dividends and distributions.
--------------------------------------------------------------------------------
Annual Total Returns (%) as of 12/31 each year Premium
Class S
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART DATA:
00.00 00.00
--------------------------------------------------------------------------------
`98 `99
--------------------------------------------------------------------------------
2000 Total Return as of June 30:
Best Quarter: Worst Quarter:
16 | Scudder Money Market Series
<PAGE>
--------------------------------------------------------------------------------
Average Annual Total Returns (%) as of 12/31/1999
--------------------------------------------------------------------------------
1 Year Since Inception
--------------------------------------------------------------------------------
Premium Class S*
--------------------------------------------------------------------------------
Prime Reserve Class S**
--------------------------------------------------------------------------------
* Class inception: 7/7/97
** Class Inception 10/15/98
To find out current seven-day yield for either share class, call 1-800-SCUDDER.
The total return for 1998 would have been lower if operating expenses hadn't
been maintained.
17 | Scudder Money Market Series
<PAGE>
How Much Investors Pay
This fund has no sales charges or other shareholder fees. The fund does have
annual operating expenses, and as a shareholder you pay them indirectly.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Prime
Prime Reserve
Premium Premium Reserve Class
Fee Table Class S Class AARP Class S AARP
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shareholder Fees (paid directly from
your investment) None None None None
----------------------------------------------------------------------------------------------------------
Annual Operating Expenses (deducted from fund assets)
----------------------------------------------------------------------------------------------------------
Management Fee
----------------------------------------------------------------------------------------------------------
Distribution (12b-1) Fee
----------------------------------------------------------------------------------------------------------
Other Expenses
------------------------------------------------
----------------------------------------------------------------------------------------------------------
Fixed Administrative
Fee
----------------------------------------------------------------------------------------------------------
Other Fund Operating
Expenses*
----------------------------------------------------------------------------------------------------------
Total Annual Operating
Expenses
----------------------------------------------------------------------------------------------------------
Fee Waiver
------------------------------------------------
----------------------------------------------------------------------------------------------------------
Net Annual Operating
Expenses**
----------------------------------------------------------------------------------------------------------
</TABLE>
* Includes such expenses as taxes, brokerage, interest and fees and expenses of
Board members not affiliated with Scudder Kemper (including fees and expenses
of their independent counsel).
** By contract, the adviser has reduced its management fee for each class by
0.05% through 9/30/2001. From time to time, the adviser may voluntarily waive
an additional portion of its management fee.
18 | Scudder Money Market Series
<PAGE>
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
Based on the costs above (including one year of reduced expenses in each period
due to the contractual management fee waiver), this example is designed to help
you compare the expenses of each class to those of other funds. The example
assumes you invested $10,000, earned 5% annual returns, reinvested all dividends
and distributions, and sold your shares at the end of each period. This is only
an example; actual expenses will be different.
Share Class 1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
Premium
Class S
--------------------------------------------------------------------------------
Premium
Class AARP
--------------------------------------------------------------------------------
Prime Reserve
Class S
--------------------------------------------------------------------------------
Prime Reserve
Class AARP
--------------------------------------------------------------------------------
19 | Scudder Money Market Series
<PAGE>
Other Policies and Risks
While the fund-by-fund sections on the previous pages describe the main points
of each fund's strategy and risks, there are a few other issues to know about:
o Although major changes tend to be infrequent, each fund's Board could change
that fund's investment goal without seeking shareholder approval. However,
the policy for investing 80% of assets for the Tax Free Money Fund cannot be
changed without shareholder approval.
o As a temporary defensive measure, Scudder Tax Free Money Fund could shift up
to 100% of assets into investments such as taxable money market securities.
This would mean that the fund was not pursuing its goal.
o The investment adviser establishes a security's credit quality when it buys
the security, using independent ratings or, for unrated securities, its own
credit ratings. If a security's credit quality falls, the security will be
sold unless the adviser or the Board believes this would not be in the
shareholders' best interests.
THE FOLLOWING SIDEBAR TEXT APPEARS NEXT TO THE PRECEDING PARAGRAPHS.
--------------------------------------------------------------------------------
FOR MORE INFORMATION
This prospectus doesn't tell you about every policy or risk of investing in the
funds.
If you want more information on a fund's allowable securities and investment
practices and the characteristics and risks of each one, you may want to request
a copy of the SAI (the back cover has information on how to do this).
Keep in mind that there is no assurance that any mutual fund will achieve its
goal.
--------------------------------------------------------------------------------
20 | Other Policies and Risks
<PAGE>
--------------------------------------------------------------------------------
[ICON] Scudder Kemper, the company with overall responsibility for managing
the funds, takes a team approach to asset management.
--------------------------------------------------------------------------------
Who Manages and Oversees the Funds
The investment adviser
The investment adviser for these funds is Scudder Kemper Investments, Inc.,
located at 345 Park Avenue, New York, NY. Scudder Kemper has more than 80 years
of experience managing mutual funds, and currently has more than $290 billion in
assets under management.
Each fund is managed by a team of investment professionals, who individually
represent different areas of expertise and who together develop investment
strategies and make buy and sell decisions. Supporting the fund managers are
Scudder Kemper's many economists, research analysts, traders, and other
investment specialists, located in offices across the United States and around
the world.
As payment for serving as investment adviser, Scudder Kemper receives a
management fee from each fund. Below are the actual rates paid by each fund for
the 12 months through the most recent fiscal year end, as a percentage of its
average daily net assets.
Scudder Cash Investment Trust pays the adviser 0.50% of the first $250 million
of average daily net assets, 0.45% of the next $250 million of average daily net
assets, 0.40% of the next $500 million of average daily net assets, 0.35% of the
next $500 million of average daily net assets, 0.335% of the next $500 million
of average daily net assets, and 0.320% on average daily net assets in excess of
$2 billion.
Scudder U.S. Treasury Money Fund pays the adviser 0.40% of the first $500
million of average daily net assets, 0.385% of the next $500 million and 0.37%
on average daily net assets in excess of $1 billion.
Fund Name Fee Paid
--------------------------------------------------------------------------------
Scudder Tax Free Money Fund
--------------------------------------------------------------------------------
Scudder U.S. Treasury Money Fund
--------------------------------------------------------------------------------
21 | Who Manages and Oversees the Funds
<PAGE>
Fund Name Fee Paid
--------------------------------------------------------------------------------
Scudder Cash Investment Trust
--------------------------------------------------------------------------------
Scudder Money Market Series, Premium Class S
--------------------------------------------------------------------------------
Scudder Money Market Series, Prime Reserve Class S
--------------------------------------------------------------------------------
For Scudder Money Market Series Prime Reserve Class AARP shares and Premium
Class AARP shares, classes that haven't been in operation for a full fiscal
year, the rates are __% and __% of the fund's average daily net assets,
respectively.
22 | Who Manages and Oversees the Funds
<PAGE>
Administrative fee
Each fund has entered into an administrative services agreement with Scudder
Kemper Investments, Inc. Pursuant to each agreement, Scudder Kemper will provide
or pay others to provide substantially all of the administrative services
required by the fund in exchange for the payment by the fund of a fixed fee rate
as follows:
--------------------------------------------------------------------------------
Administrative Fee
(as % of average daily
net assets)
--------------------------------------------------------------------------------
Scudder Tax Free Money Fund
--------------------------------------------------------------------------------
Scudder U.S. Treasury Money Fund
--------------------------------------------------------------------------------
Scudder Cash Investment Trust
--------------------------------------------------------------------------------
Scudder Money Market Series Premium
Class S
--------------------------------------------------------------------------------
Scudder Money Market Series Premium
Class AARP
--------------------------------------------------------------------------------
Scudder Money Market Series Prime
Reserve Class S
--------------------------------------------------------------------------------
Scudder Money Market Series Prime
Reserve Class AARP
--------------------------------------------------------------------------------
Such an administrative fee will enable investors to determine with greater
certainty the expense level that a fund will experience, and, for the term of
the administrative services agreement, will transfer substantially all of the
risk of increased costs to Scudder Kemper. The initial term of each
administrative agreement is three years.
Scudder Kemper will not bear certain fund expenses under the administrative
services agreements, such as taxes, brokerage, interest, extraordinary expenses
and the fees and expenses of the independent trustees of the funds' Boards
(including the fees and expenses of their independent counsel). In addition, the
funds will continue to pay the
23 | Who Manages and Oversees the Funds
<PAGE>
fees required by their investment management agreements with Scudder Kemper.
24 | Who Manages and Oversees the Funds
<PAGE>
The portfolio managers
The following people handle the day-to-day management of each fund in this
prospectus.
Scudder Tax Free Money Fund Scudder Cash Investment Trust
Scudder Money Market Series
Frank J. Rachwalski, Jr.
Lead Portfolio Manager Frank J. Rachwalski, Jr.
o Began investment career in 1973 Lead Portfolio Manager
o Joined the adviser in 1973 o Began investment career in 1973
o Joined the fund team in 1998 o Joined the adviser in 1973
o Joined the fund team in 1998
Jerri I. Cohen
o Began investment career in 1981 Dean Meddaugh
o Joined the adviser in 1981 o Began investment career in 1994
o Joined the fund team in 1998 o Joined the adviser in 1996
o Joined the fund team in 1998
Scudder U.S. Treasury Money Fund
Frank J. Rachwalski, Jr.
Lead Portfolio Manager
o Began investment career in 1973
o Joined the adviser in 1973
o Joined the fund team in 1998
Christopher Proctor
o Began investment career in 1990
o Joined the adviser in 1999
o Joined the fund team in 1999
25 | Who Manages and Oversees the Funds
<PAGE>
The AARP Class
Since its beginning in 1985, the AARP Investment Program from Scudder has been
specially designed to address the needs of people age 50 and over. In keeping
with the organization's mission, AARP's goal is to encourage more of its members
to plan for retirement and beyond. To continue to meet the increasingly diverse
needs and goals of its members, the AARP Investment Program from Scudder has
recently been expanded to offer a wider range of investment options to AARP
members. The AARP Class generally has lower minimum investments, retains its own
identity with separate statements and continues the AARP Investment Program's
commitment to shareholder education.
While AARP takes no part in the investment decisions made by Scudder Kemper,
AARP, through its subsidiary, oversees the Program's service quality and
communications, and AARP provides insight and direction as to what best
represents the interests and concerns of its membership. In addition, AARP is
represented on each fund's Board.
26 | Who Manages and Oversees the Funds
<PAGE>
The Board
A mutual fund's Board is responsible for the general oversight of the fund's
business. The majority of each Board is not affiliated with Scudder Kemper.
These independent members have primary responsibility for assuring that each
fund is managed in the best interests of its shareholders. The following people
comprise each fund's Board:
<TABLE>
<S> <C>
Linda C. Coughlin Joan E. Spero
o Managing Director, Scudder Kemper o President, Doris Duke Charitable
Investments, Inc. Foundation
o President of each fund
Jean G. Stromberg
Henry P. Becton, Jr. o Consultant
o President and General Manager, WGBH
Educational Foundation Jean C. Tempel
o Venture Partner, Internet Capital
Dawn-Marie Driscoll Group (Internet holding company)
o Executive Fellow, Center for Business
Ethics, Bentley College Steven Zaleznick
o President, Driscoll Associates o President and Chief Executive
(consulting firm) Officer, AARP Services, Inc.
Edgar Fiedler
o Senior Fellow and Economic Counsellor,
The Conference Board, Inc.
Keith R. Fox
o Private Equity Investor
o President, Exeter Capital Management
Corporation
</TABLE>
27 | Who Manages and Oversees the Funds
<PAGE>
Financial Highlights
These tables are designed to help you understand each fund's financial
performance in recent years. The figures in the first part of each table are for
a single share. The total return figures represent the percentage that an
investor in a particular fund would have earned (or lost), assuming all
dividends and distributions were reinvested. This information has been audited
by PricewaterhouseCoopers LLP, whose report, along with each fund's financial
statements, is included in that fund's annual report (see "Shareholder reports"
on the back cover).
Scudder Tax Free Money Fund
[to be updated}
28 | Financial Highlights
<PAGE>
Scudder U.S. Treasury Money Fund
[to be updated}
29 | Financial Highlights
<PAGE>
Scudder Cash Investment Trust
[to be updated}
30 | Financial Highlights
<PAGE>
Scudder Money Market Series -- Premium Class S
[to be updated}
31 | Financial Highlights
<PAGE>
Scudder Money Market Series -- Prime Reserve Class S
[to be updated}
32 | Financial Highlights
<PAGE>
How to invest in the funds
The following pages tell you how to invest in these funds and what to expect as
a shareholder. If you're investing directly with Scudder, all of this
information applies to you.
If you're investing through a "third party provider" -- for example, a workplace
retirement plan, financial supermarket, or financial adviser -- your provider
may have its own policies or instructions, and you should follow those.
As noted earlier, there are two classes of shares in this prospectus. The
instructions for buying and selling each class are slightly different.
Instructions for buying and selling Class S Shares are found on the next two
pages.
<PAGE>
These are followed by instructions for buying and selling Class AARP
Shares. Be sure to use the appropriate table when placing any orders to buy,
exchange or sell shares in your account.
34 | Financial Highlights
<PAGE>
How to Buy and Sell Class S Shares
Buying Shares Use these instructions to invest directly with Scudder. Make out
your check to "The Scudder Funds."
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
First investment Additional investments
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Money Market Series: Money Market Series:
$100,000 or more for Prime $1,000 or more for either
Reserve Class S; $25,000 or share class
more for Premium Class S
All other funds:
All other funds: $100 or more; $50 or more for
$2,500 or more; $1,000 or IRAs or when using an Automatic
more for IRAs* Investment Plan
-------------------------------------------------------------------------------------------------
By mail or o Fill out and sign an application o Send a check and a Scudder
express investment slip to us at the
(see below) o Send it to us at the appropriate appropriate address below
address, along with an
investment check o If you don't have an investment
slip, simply include a letter
with your name, account number, the
full name of the fund and class,
and your investment instructions
-------------------------------------------------------------------------------------------------
By wire o Call 1-800-SCUDDER for o Call 1-800-SCUDDER for
instructions instructions
-------------------------------------------------------------------------------------------------
By phone -- o Call 1-800-SCUDDER for
instructions
-------------------------------------------------------------------------------------------------
With an automatic -- o To set up regular investments
investment from a bank checking account,
plan call 1-800-SCUDDER
-------------------------------------------------------------------------------------------------
Using QuickBuy -- o Call 1-800-SCUDDER
-------------------------------------------------------------------------------------------------
On the Internet o Go to the "funds and prices" o Call 1-800-SCUDDER to ensure
section at www.scudder.com you have enabled electronic
services
o Access and print out an o Go to www.scudder.com and
on-line prospectus and a new register
account application
o Follow instructions for
o Complete and return the buying shares with money from
application with your check your bank account
-------------------------------------------------------------------------------------------------
</TABLE>
* Scudder Tax Free Money Fund is not appropriate for IRAs.
--------------------------------------------------------------------------------
[ICON] Regular mail:
The Scudder Funds, PO Box 2291, Boston, MA 02107-2291
Express, registered or certified mail:
The Scudder Funds, 66 Brooks Drive, Braintree, MA 02184-3839
Fax number: 1-800-821-6234 (for exchanging and selling only)
--------------------------------------------------------------------------------
35
<PAGE>
<TABLE>
Exchanging or Selling Shares Use these instructions to exchange or sell shares
in an account opened directly with Scudder.
---------------------------------------------------------------------------------------
Exchanging into another fund Selling shares
---------------------------------------------------------------------------------------
<S> <C> <C>
To open a new account: Some transactions, including
same minimum as for a new most for over $100,000, can
investment only be ordered in writing; if
you're in doubt, see page 48
For exchanges between
existing accounts:
Money Market Series:
$1,000 or more for either
share class
All other funds:
$100 or more
---------------------------------------------------------------------------------------
By phone or wire o Call 1-800-SCUDDER for o Call 1-800-SCUDDER for
instructions instructions
---------------------------------------------------------------------------------------
Using SAIL(TM) o Call 1-800-343-2890 and o Call 1-800-343-2890 and
follow the instructions follow the instructions
---------------------------------------------------------------------------------------
By mail, Write a letter that includes: Write a letter that includes:
express, or fax
(see previous o the fund, class, and account o the fund, class, and account
page) number you're exchanging number from which you want to
out of sell shares
o the dollar amount or number o the dollar amount or number
of shares you want to exchange of shares you want to sell
o the name and class of the o your name(s), signature(s),
fund you want to exchange into and address, as they appear
on your account
o your name(s), signature(s),
and address, as they appear o a daytime telephone number
on your account
o a daytime telephone number
---------------------------------------------------------------------------------------
With an -- o To set up regular cash payments
automatic from a Scudder fund account,
withdrawal call 1-800-SCUDDER
plan
---------------------------------------------------------------------------------------
Using QuickSell -- o Call 1-800-SCUDDER
---------------------------------------------------------------------------------------
Using -- o Call 1-800-SCUDDER
Checkwriting
---------------------------------------------------------------------------------------
On the Internet o Go to www.scudder.com and --
register
o Follow instructions for
making on-line exchanges
---------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
How to Buy and Sell Class AARP Shares
Buying Shares Using these instructions to invest directly with Scudder. Make out
your check to "AARP Investment Program."
---------------------------------------------------------------------------------------
First investment Additional investments
---------------------------------------------------------------------------------------
<S> <C> <C>
$10,000 for Prime Reserve Class $___ or more for regular accounts
AARP
$__ or more for IRAs
$25,000 for Premium Class AARP
$50 or more with an Automatic
Investment Plan
---------------------------------------------------------------------------------------
By mail o Send completed enrollment o Send a personalized investment
form and check (payable to slip or short note that includes:
AARP Investment "AARP Investment Program").
Program from o fund name
Scudder o For enrollment forms, call
800-253-2277. o AARP class
P.O. Box 2540
Boston, MA o account number
02208-2540
o check payable to "AARP
Investment Program".
---------------------------------------------------------------------------------------
By wire o Call 800-253-2277 for o Call 800-253-2277 for
instructions instructions
---------------------------------------------------------------------------------------
By phone -- o Call 800-253-2277 for
instructions
---------------------------------------------------------------------------------------
With an o Fill in the information o To set up regular investment
automatic required on your enrollment from a bank checking account,
investment plan form and include a voided call 800-253-2277.
check.
---------------------------------------------------------------------------------------
Web site -- o Once you have registered on
the Web Site
(aarp.scudder.com), you may
purchase shares online by
transfers from your bank
account.
---------------------------------------------------------------------------------------
QuickBuy -- o Call 800-253-2277
---------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
<TABLE>
Exchanging or Selling Shares Use these instructions to exchange or sell shares
in an account opened directly with Scudder.
---------------------------------------------------------------------------------------
Exchanging into another fund Selling shares
---------------------------------------------------------------------------------------
<S> <C> <C>
$10,000 for Prime Reserve Class Some transaction, including most
AARP for over $100,000, can only be
ordered in writing; see the
$25,000 for Premium Class AARP prospectus for more information
---------------------------------------------------------------------------------------
By phone o Call 800-253-2277 for o Call 800-253-2277 for
instructions instructions
---------------------------------------------------------------------------------------
Using Easy Access o Call 800-631-4636 and follow o Call 800-631-4636 and follow
the instructions the instructions
---------------------------------------------------------------------------------------
By mail or fax Your instructions should Your instructions should
(see previous include: include:
page)
o your account number o your account number
o names of the fund and class o names of the fund and class
and number of shares or and number of shares or
dollar amount you want to dollar amount you want to
exchange redeem
o
---------------------------------------------------------------------------------------
With an -- o To set up regular cash
automatic payments from an account,
withdrawal plan call 800-253-2277
---------------------------------------------------------------------------------------
Using QuickSell -- o Call 800-253-2277
---------------------------------------------------------------------------------------
Web Site o Once you have registered on --
the Web Site
(aarp.scudder.com), you may
exchange shares between
Investment Program funds
online.
---------------------------------------------------------------------------------------
</TABLE>
SERVICES FOR AARP CLASS INVESTORS
To reach us:
o Web site www.aarp.scudder.com
o Program representatives 800-253-2277, M-F, 8 a.m. - 4 p.m. Eastern time
o Confidential fax line 800-821-6234, always open
o TDD line 800-634-9454, M-F, 9 a.m. - 5 p.m. Eastern time
Services for participants:
o AARP Lump Sum Service For planning and setting up a lump sum distribution.
o AARP Legacy Service For organizing financial documents and planning the
orderly transfer of assets to heirs
o AARP Goal Setting and Asset Allocation Service For allocating assets and
measuring investment progress
o For more information, please call 800-253-2277.
38
<PAGE>
--------------------------------------------------------------------------------
[ICON] Questions? You can speak to a Scudder representative between 8 a.m. and
8 p.m. Eastern time on any fund business day by calling 1-800-SCUDDER
for Class S and 1-800-253-2277 for Class AARP.
--------------------------------------------------------------------------------
Policies You Should Know About
Along with the instructions on the previous pages, the policies below may affect
you as a shareholder. Some of this information, such as the section on dividends
and taxes, applies to all investors, including those investing through
investment providers.
If you are investing through an investment provider, check the materials you got
from them. As a general rule, you should follow the information in those
materials wherever it contradicts the information given here. Please note that
an investment provider may charge its own fees.
Policies about transactions
The funds are open for business whenever the New York Stock Exchange is open.
Each fund calculates its share price every business day, as of the close of
regular trading on the Exchange for all funds except Scudder Money Market Series
(typically 4 p.m. Eastern time, but sometimes earlier, as in the case of
scheduled half-day trading or unscheduled suspensions of trading) and at 5 p.m.
Eastern time for Scudder Money Market Series. Except for Scudder Money Market
Series, each fund also calculates its share price as of 12:00 noon on business
days. Orders for Scudder Money Market Series received between 4 p.m. and 5 p.m.
Eastern time may be rejected based on certain guidelines described in the
Statement of Additional Information.
You can place an order to buy or sell shares at any time. Once your order is
received by Scudder Service Corporation, and they have determined that it is a
"good order," it will be processed at the next share price calculated.
Because orders placed through investment providers must be forwarded to Scudder
Service Corporation before they can be processed, you'll need to allow extra
time. A representative of your investment provider should be able to tell you
when your order will be processed.
39
<PAGE>
Wire investments for Scudder Money Market Series that arrive by 5 p.m. Eastern
time will receive that day's dividend. With all funds except for Scudder Money
Market Series, wire transactions that arrive by 12:00 noon Eastern time will
receive that day's dividend. All other investments will start to accrue
dividends the next business day after your purchase is processed.
When selling shares, you'll generally receive the dividend for the day on which
your shares were sold. If you ask us to, we can sell shares in any fund except
Scudder Money Market Series and wire you the proceeds on the same day, as long
as we receive your request before 12:00 noon. However, you won't receive that
day's dividend. For Scudder Money Market Series, redemption by wire is not
available after 4 p.m. Eastern time, but redemptions by other available means
may be made until 5 p.m. Eastern time.
40
<PAGE>
--------------------------------------------------------------------------------
[ICON] The Scudder Web site can be a valuable resource for shareholders with
Internet access. To get up-to-date information,review balances or even
place orders for exchanges, go to
www.scudder.com. (Class S) or
aarp.scudder.com (Class AARP)
--------------------------------------------------------------------------------
SAIL(TM), the Scudder Automated Information Line, is available 24 hours a day by
calling 1-800-343-2890. You can use SAIL to get information on Scudder funds
generally and on accounts held directly at Scudder. You can also use it to make
exchanges and sell shares.
For S Class Shares call SAIL(TM), the Scudder Automated Information Line, at
1-800-343-8290
For AARP Class Shares call Easy-Access Line, the AARP Program Automated
Information Line, at 1-800-631-4636.
The Easy-Access Line is available 24 hours a day by calling 1-800-631-4636. This
automated number provides current information on the funds and your account. If
you have signed up for telephone services, you can also use this number to
exchange and redeem Class AARP shares.
QuickBuy and QuickSell let you set up a link between a Scudder account and a
bank account. Once this link is in place, you can move money between the two
with a phone call. You'll need to make sure your bank has Automated Clearing
House (ACH) services. To set up QuickBuy or QuickSell on a new account, see the
account application; to add it to an existing account, call 1-800-SCUDDER for
Class S and 1-800-253-2277 for Class AARP.
Checkwriting lets you sell fund shares by writing a check. Your investment keeps
earning dividends until your check clears. Please note that you should not write
checks for less than $1,000 with Scudder Money Market Series or less than $100
with all other funds. Note as well that we can't honor any check larger than
your balance at the time the check is presented to us, or any check for more
than $5,000,000. It's not a good idea to close out an account using a check
because the account balance could change between the time you write the check
and the time it is processed.
41
<PAGE>
When you call us to sell shares, we may record the call, ask you for certain
information, or take other steps designed to prevent fraudulent orders. It's
important to understand that as long as we take reasonable steps to ensure that
an order appears genuine, we are not responsible for any losses that may occur.
When you ask us to send or receive a wire, please note that while we don't
charge a fee to receive wires, we will deduct a $5 fee from all wires sent from
us to your bank. Your bank may charge its own fees for handling wires. The funds
can only accept wires of $100 or more.
Exchanges among Scudder funds are an option for shareholders who bought their
shares directly from Scudder and for many other investors as well. Exchanges are
a shareholder privilege, not a right: we may reject or limit any exchange order,
particularly when there appears to be a pattern of "market timing" or other
frequent purchases and sales. We may also reject or limit purchase orders, for
these or other reasons.
When you want to sell more than $100,000 worth of shares, you'll usually need to
place your order in writing and include a signature guarantee. The only
exception is if you want money wired to a bank account that is already on file
with us; in that case, you don't need a signature guarantee. Also, you don't
need a signature guarantee for an exchange, although we may require one in
certain other circumstances.
A signature guarantee is simply a certification of your signature -- a valuable
safeguard against fraud. You can get a signature guarantee from most brokers and
most banks, savings institutions, and credit unions. Note that you can't get a
signature guarantee from a notary public.
42
<PAGE>
--------------------------------------------------------------------------------
[ICON] If you ever have difficulty placing an order by phone or fax, you can
always send us your order in writing.
--------------------------------------------------------------------------------
Money from shares you sell is normally sent out within one business day of when
your order is processed (not when it is received), although it could be delayed
for up to seven days. There are also two circumstances when it could be longer:
when you are selling shares you bought recently by check and that check hasn't
cleared yet (maximum delay: 15 days) or when unusual circumstances prompt the
SEC to allow further delays.
How the funds calculate share price
For each fund and share class in this prospectus, the share price is the net
asset value per share, or NAV. To calculate NAV for each fund and share class,
the funds use the following equation:
TOTAL ASSETS - TOTAL LIABILITIES
---------------------------------- = NAV
TOTAL NUMBER OF SHARES OUTSTANDING
In valuing securities, we typically use the amortized cost method (the method
used by most money market funds). However, when a market price isn't available,
or when we have reason to believe it doesn't represent market realities, we may
use fair value methods approved by each fund's Board. In such a case, the fund's
value for a security is likely to be different from quoted market prices.
43
<PAGE>
Other rights we reserve
You should be aware that we may do any of the following:
o withhold 31% of your distributions as federal income tax if we have been
notified by the IRS that you are subject to backup withholding, or if you
fail to provide us with a correct taxpayer ID number or certification that
you are exempt from backup withholding
o with Scudder Money Market Series, close your account and send you the
proceeds if your balance falls below the minimum for your share class, which
is [$7,500 for Prime Reserve Class S and Prime Reserve Class AARP and $20,000
for Premium Class S and Premium Class AARP]; in either case, we will give you
60 days' notice so you can either increase your balance or close your account
(these policies don't apply to retirement accounts or to investors with
$100,000 or more in Scudder fund shares)
o for Class S shareholders of all other funds, charge you $10 a year if your
account balance falls below $2,500; for Class S and Class AARP shareholders,
close your account and send you the proceeds if your balance falls below
$1,000; the notification and exemption policies are the same as in the bullet
above
o reject a new account application if you don't provide a correct Social
Security or other tax ID number; if the account has already been opened, we
may give you 30 days' notice to provide the correct number
o pay you for shares you sell by "redeeming in kind," that is, by giving you
marketable securities (which typically will involve brokerage costs for you
to liquidate) rather than cash; in most cases, a fund won't make a
redemption-in-kind unless your requests over a 90-day period total more than
$250,000 or 1% of the fund's assets, whichever is less
o change, add, or withdraw various services, fees, and account policies (for
example, we may change or terminate the exchange privilege at any time)
44
<PAGE>
--------------------------------------------------------------------------------
[ICON] Because each shareholder's tax situation is unique, it's always a good
idea to ask your tax professional about the tax consequences of your
investments, including any state and local tax consequences.
--------------------------------------------------------------------------------
Understanding Distributions and Taxes
By law, a mutual fund is required to pass through to its shareholders virtually
all of its net earnings. A fund can earn money in two ways: by receiving
interest, dividends or other income from securities it holds, and by selling
securities for more than it paid for them. (A fund's earnings are separate from
any gains or losses stemming from your own purchases and sales of shares.) A
fund may not always pay a distribution for a given period.
The funds intend to declare income dividends daily, and pay them monthly.
Scudder Tax Free Money Fund may make short- or long-term capital gain
distributions in November or December. The taxable money funds may take into
account capital gains and losses (other than net long-term capital gains) in
their daily dividend declarations. The funds may make additional distributions
for tax purposes if necessary.
You can choose how to receive your dividends and distributions. You can have
them all automatically reinvested in fund shares or all sent to you by check.
Tell us your preference on your application. If you don't indicate a preference,
your dividends and distributions will all be reinvested. For retirement plans,
reinvestment is the only option.
45
<PAGE>
The tax status of the fund earnings you receive, and your own fund transactions,
generally depends on which fund you are in and which type of transaction is
involved. The following tables show the usual tax status of transactions in fund
shares as well as that of any taxable distributions from the funds:
Generally taxed at ordinary income rates
---------------------------------------------------------------
o short-term capital gains from selling fund shares
---------------------------------------------------------------
o taxable income dividends you receive from a fund
---------------------------------------------------------------
o short-term capital gains distributions you receive from a fund
---------------------------------------------------------------
Generally taxed at capital gains rates
---------------------------------------------------------------
o long-term capital gains from selling fund shares
---------------------------------------------------------------
o long-term capital gains distributions you receive from a fund
---------------------------------------------------------------
Because each fund seeks to maintain a stable share price, you are unlikely to
have a capital gain or loss when you sell fund shares. For tax purposes, an
exchange is the same as a sale.
46
<PAGE>
For most shareholders, dividends from Scudder Tax Free Money Fund are generally
free from federal income tax, and a portion of the dividends from Scudder U.S.
Treasury Money Fund are generally free from state and local income tax. However,
there are a few exceptions:
o a portion of a fund's dividends may be taxable as ordinary income if it came
from investments in taxable securities, tax-exempt market discount bonds, or
as the result of short- or long-term capital gains
o with Scudder Tax Free Money Fund, because the fund can invest up to 20% of
assets in securities whose income is subject to the federal alternative
minimum tax (AMT), you may owe taxes on a portion of your dividends if you
are among those investors who must pay AMT
Each fund will send you detailed tax information every January. These statements
tell you the amount and the tax category of any dividends or distributions you
received. They also have certain details on your purchases and sales of shares.
The tax status of dividends and distributions is the same whether you reinvest
them or not. Dividends or distributions declared in the last quarter of a given
year are taxed in that year, even though you may not receive the money until the
following January.
47
<PAGE>
Additional Information for Class AARP Shareholders
Web Site
aarp.scudder.com
You can review your portfolio and make online transactions, including purchases
and exchanges between Investment Program Mutual Funds, once you have registered
on the site. You can also customize the site according to your preference. The
Learning Center includes online versions of educational publications and past
issues of Financial Focus and Investment Insight, the Program's newsletters. You
may also contact us through the site's e-mail capability.
AARP Investment Program Representatives
Call 800-253-2277 8AM-8PM M-F, Eastern time
Call this number to speak with a trained representative who can answer your
investing questions and assist you with transaction-related services. You may
also use this number to request a variety of investment education guides and
prospectuses.
Confidential Fax Line
800-821-6234 24 hours a day, year-round
Signed exchange and redemption requests received after 4 p.m. Eastern time on a
business day or over a weekend or holiday will be executed the following
business day.
TDD Line
1-800-634-9454 9 AM-5PM, M-F, Eastern time
Dial this number with a TDD machine to communicate with registered AARP Mutual
Fund representatives specially trained to handle services for hearing-impaired
investors.
48
<PAGE>
Services
AARP Lump Sum Service Retirement specialists can help you make decisions about
your lump sum distribution from an employer's 401(k) or pension plan. An
information kit is provided. Call 1-800-253-2277.
AARP Legacy Service This service helps you organize important financial
documents, making it easier to share your investment information and goals with
your spouse or heirs and to plan for the orderly transfer of assets in the event
of a death. We also offer transfer ownership assistance to heirs for your AARP
accounts. Information kits are provided. Call 1-800-253-2277.
AARP Goal Setting and Asset Allocation Service A guidebook and self-scoring
worksheet are available to help you reach your goals by appropriately allocating
your assets across types of investments. Call 1-800-253-2277 to speak to a
specially trained representative.
Account Statements and Reports You will receive prompt confirmation statements
for all of your transactions. Your consolidated [monthly] statement details your
current account status and records all transactions. (AARP IRA and Keogh Plan
investors receive consolidated statements quarterly.)
You will also receive a semiannual report, an annual report, and a current
prospectus each year.
49
<PAGE>
To Get More Information
Shareholder reports -- These include commentary from each fund's management team
about recent market conditions and the effects of a fund's strategies on its
performance. For each fund, they also have detailed performance figures, a list
of everything the fund owns, and the fund's financial statements. Shareholders
get these reports automatically. To reduce costs, we mail one copy per
household.
For more copies, call 1-800-SCUDDER.
Statement of Additional Information (SAI) -- Each fund's SAI tells you more
about its features and policies, including additional risk information. The
funds' SAIs are incorporated by reference into this document (meaning that it's
legally part of this prospectus).
If you'd like to ask for copies of these documents, or if you're a shareholder
and have questions, please contact Scudder or the SEC (see below). Materials you
get from Scudder are free; those from the SEC involve a copying fee. If you
like, you can look over these materials in person at the SEC's Public Reference
Room in Washington, DC or request them electronically at [email protected].
Scudder Funds AARP SEC
PO Box 2291 P.O. Box 2540 450 Fifth Street, N.W.
Boston, MA Boston, MA Washington, DC
02107-2291 02208-2540 20549-6009
1-800-SCUDDER 1-800-253-2277 1-202-942-8090
www.scudder.com aarp.scudder.com www.sec.gov
Fund Name SEC File #
---------------------------------------------------------------
Scudder Tax Free Money Fund 811-2959
---------------------------------------------------------------
Scudder U.S. Treasury Money Fund 811-3043
---------------------------------------------------------------
Scudder Cash Investment Trust 811-2613
---------------------------------------------------------------
Scudder Money Market Series 811-3495
---------------------------------------------------------------
<PAGE>
SCUDDER MONEY MARKET TRUST
Two International Place
Boston, MA 02110-4103
1-800-553-6360
1-800-537-3177 (Institutional Shares)
Scudder Money Market Trust is a professionally managed,
open-end management investment company.
SCUDDER MONEY MARKET SERIES
Prime Reserve Class S
Prime Reserve Class AARP
Premium Class S
Premium Class AARP
Institutional Shares
Managed Shares
August 14, 2000
A mutual fund seeking as high a level of current income as is
consistent with liquidity, preservation of capital and the fund's
investment policies through exclusive investment in high quality
short-term securities and certain repurchase agreements.
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
This combined Statement of Additional Information is not a prospectus and should
be read in conjunction with the applicable prospectus of Scudder Money Market
Trust datedAugust 14, 2000, as may be amended from time to time, a copy of which
may be obtained without charge by writing to Scudder Investor Services, Inc.,
Two International Place, Boston, Massachusetts 02110-4103. The Annual Report to
Shareholders of Scudder Money Market Series dated May 31, 2000 is incorporated
by reference into and is hereby deemed to be part of this Statement of
Additional Information. The Annual Report may be obtained without charge by
calling 1-800-225-5163.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
THE FUND'S INVESTMENT OBJECTIVE AND POLICIES..........................................................................1
General Investment Objectives and Policies............................................................................1
Master/feeder structure......................................................................................3
Investment Restrictions......................................................................................3
ADDITIONAL PERMITTED INVESTMENT ACTIVITIES............................................................................4
PURCHASING SHARES -- PRIME RESERVE SHARES, PREMIUM SHARES,
MANAGED SHARES...............................................................................................8
Wire Transfer of Federal Funds...............................................................................9
Additional Information About Making Subsequent Investments by QuickBuy.......................................9
Share Certificates..........................................................................................10
EXCHANGES AND REDEMPTIONS --PRIME RESERVE SHARES, PREMIUM
SHARES AND MANAGED SHARES...................................................................................10
Exchanges...................................................................................................10
Redemption by Telephone.....................................................................................12
Redemption by QuickSell.....................................................................................12
Redemption by Mail or Fax...................................................................................13
Redemption by Checkwriting..................................................................................13
PURCHASING SHARES -- INSTITUTIONAL SHARES............................................................................14
Wire Transfer of Federal Funds..............................................................................14
Share Certificates..........................................................................................15
REDEMPTIONS -- INSTITUTIONAL SHARES..................................................................................15
Redemption by Wire..........................................................................................15
Redemption by Telephone.....................................................................................16
Redemption by Mail or Fax...................................................................................16
Minimum balances for Institutional Shares of Scudder
Money Market Series.........................................................................................17
FEATURES AND SERVICES OFFERED BY THE FUND............................................................................17
The No-Load Concept.........................................................................................17
Internet access.............................................................................................17
Dividends and Capital Gains Distribution Options --
Premium Shares, Prime Reserve Shares and Managed
Shares......................................................................................................18
Reports to Shareholders.....................................................................................18
Transaction Summaries.......................................................................................18
THE SCUDDER FAMILY OF FUNDS..........................................................................................19
SPECIAL PLAN ACCOUNTS................................................................................................22
Scudder Retirement Plans: Profit-Sharing and Money
Purchase Pension Plans for Corporations and
Self-Employed Individuals...................................................................................22
Scudder 401(k): Cash or Deferred Profit-Sharing Plan
for Corporations and Self-Employed Individuals..............................................................22
Scudder IRA: Individual Retirement Account.................................................................22
Scudder Roth IRA: Individual Retirement Account............................................................23
Scudder 403(b) Plan.........................................................................................23
Automatic Withdrawal Plan...................................................................................23
Group or Salary Deduction Plan..............................................................................24
Uniform Transfers/Gifts to Minors Act.......................................................................24
DIVIDENDS............................................................................................................24
PERFORMANCE INFORMATION..............................................................................................25
Yield.......................................................................................................25
Effective Yield.............................................................................................25
Average Annual Total Return.................................................................................26
Cumulative Total Return.....................................................................................26
Total Return................................................................................................27
Comparison of Fund Performance..............................................................................27
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TABLE OF CONTENTS (continued)
Page
THE PROGRAM..........................................................................................................28
ORGANIZATION OF THE FUND.............................................................................................29
INVESTMENT ADVISER...................................................................................................30
AMA InvestmentLink(SM)Program...............................................................................32
Personal Investments by Employees of the Adviser............................................................33
DISTRIBUTOR..........................................................................................................34
TRUSTEESAND OFFICERS.................................................................................................35
REMUNERATION.........................................................................................................37
Responsibilities of the Board -- Board and Committee Meetings...............................................37
Compensation of Officers and Trustees.......................................................................37
TAXES ............................................................................................................38
PORTFOLIO TRANSACTIONS...............................................................................................39
Brokerage Commissions.......................................................................................39
NET ASSET VALUE......................................................................................................40
ADDITIONAL INFORMATION...............................................................................................41
Experts.....................................................................................................41
Other Information...........................................................................................41
FINANCIAL STATEMENTS.................................................................................................42
</TABLE>
APPENDIX
Corporate and Municipal Bonds
Corporate and Municipal Commercial Paper
Municipal Notes
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THE FUND'S INVESTMENT OBJECTIVE AND POLICIES
General Investment Objectives and Policies
Scudder Money Market Series (the "Fund") is a diversified investment
portfolio of Scudder Money Market Trust (the "Trust"), a professionally managed
open-end, management investment company. The Fund seeks to provide investors
with as high a level of current income as is consistent with its investment
policies and with preservation of capital and liquidity. There can be no
assurance that the Fund will achieve its investment objectives.
The Fund offers six classes of shares as follows: Premium Class S
Shares, Prime Reserve Class S Shares, Managed Shares and Institutional Shares
and, as of August 14, 2000, Prime Reserve Class AARP and Premium Class AARP to
provide investors with different purchase options. Each class has its own
important features and policies. Shares of each Class AARP will be specially
designed for members of the American Association of Retired Persons ("AARP").
Securities in which the Fund invests may not yield as high a level of
current income as securities of lower quality and longer maturities which
generally have less liquidity and greater market risk. The Fund will maintain a
dollar-weighted average maturity of 90 days or less in an effort to maintain a
constant net asset value of $1.00 per share, but there is no assurance that it
will be able to do so.
Except as otherwise indicated, the Fund's investment objectives and
policies are not fundamental and may be changed without a vote of shareholders.
The Fund's investment adviser is Scudder Kemper Investments, Inc. (the
"Adviser"), a leading provider of U.S. and international investment management
services for clients throughout the world. See "Investment Adviser."
Descriptions in the Statement of Additional Information of a particular
investment practice or technique in which the Fund may engage, or a financial
instrument which the Fund may purchase, are meant to describe the spectrum of
investments that the Adviser, in its discretion, might, but is not required to,
use in managing the Fund's portfolio assets. The Adviser may, in its discretion,
at any time employ such practice, technique or instrument for one or more funds
but not for all funds advised by it. Furthermore, it is possible that certain
types of financial instruments or investment techniques described herein may not
be available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques, or instruments may not
be principal activities of the Fund, but, to the extent employed, could from
time to time have a material impact on the Fund's performance.
The Fund seeks as high a level of current income as is consistent with
liquidity, preservation of capital and the fund's investment policies and with
and liquidity. The Fund invests exclusively in a broad range of high quality
short-term securities that have remaining maturities of not more than 397
calendar days and certain repurchase agreements. These securities consist of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, taxable and tax-exempt municipal obligations, corporate and
bank obligations, certificates of deposit ("CD's"), bankers' acceptances and
variable amount master demand notes.
The bank obligations in which the Fund may invest include negotiable
certificates of deposit, bankers' acceptances, fixed time deposits or other
short-term bank obligations. The Fund limits its investments in U.S. bank
obligations to banks (including foreign branches, the obligations of which are
guaranteed by the U.S. parent) that have at least $1 billion in total assets at
the time of investment. "U.S. banks" include commercial banks that are members
of the Federal Reserve System or are examined by the Comptroller of the Currency
or whose deposits are insured by the Federal Deposit Insurance Corporation. In
addition, the Fund may invest in obligations of savings banks and savings and
loan associations insured by the Federal Deposit Insurance Corporation that have
total assets in excess of $1 billion at the time of the investment. The Fund may
invest in U.S. dollar-denominated obligations of foreign banks subject to the
following conditions: the foreign banks (based upon their most recent annual
financial statements) at the time of investment (i) have more than U.S. $10
billion, or the equivalent in other currencies, in total assets; (ii) are among
the 100 largest banks in the world as determined on the basis of assets; and
(iii) have branches or agencies in the U.S.; and the obligations must be, in the
opinion of the Adviser, of an investment quality comparable to obligations of
U.S. banks in which the Fund may invest.
Fixed time deposits may be withdrawn on demand by the investor, but may
be subject to early withdrawal penalties that vary with market conditions and
the remaining maturity of the obligations. The Fund may not invest more
<PAGE>
than 10% of the value of its total assets in illiquid securities including fixed
time deposits subject to withdrawal penalties maturing in more than seven
calendar days.
The Fund may invest in U.S. dollar-denominated certificates of deposit
and promissory notes issued by Canadian affiliates of U.S. banks under
circumstances where the instruments are guaranteed as to principal and interest
by the U.S. bank. While foreign obligations generally involve greater risks than
those of domestic obligations, such as risks relating to liquidity,
marketability, foreign taxation, nationalization and exchange controls,
generally the Adviser believes that these risks are substantially less in the
case of instruments issued by Canadian affiliates that are guaranteed by U.S.
banks than in the case of other foreign money market instruments.
There is no limitation on the amount of the Fund's assets that may be
invested in obligations of foreign banks that meet the conditions set forth
above. Such investments may involve greater risks than those affecting U.S.
banks or Canadian affiliates of U.S. banks. In addition, foreign banks are not
subject to examination by any U.S. Governmental agency or instrumentality.
Except for obligations of foreign banks and foreign branches of U.S.
banks, the Fund will not invest in the securities of foreign issuers. Generally,
the Fund may not invest less than 25% of the current value of its total assets
in bank obligations (including bank obligations subject to repurchase
agreements).
Generally, the commercial paper purchased by the Fund is limited to
direct obligations of domestic corporate issuers, including bank holding
companies, which obligations, at the time of investment, are (i) rated "P-1" by
Moody's Investors Service, Inc. ("Moody's"), "A-1" or better by Standard &
Poor's Corporation ("S&P") or "F-1" by Fitch Investors Service, Inc. ("Fitch"),
(ii) issued or guaranteed as to principal and interest by issuers having an
existing debt security rating of "Aa" or better by Moody's or "AA" or better by
S&P or Fitch, or (iii) securities that, if not rated, are of comparable
investment quality as determined by the Adviser in accordance with procedures
adopted by theTrust's Board of Trustees.
The Fund may invest in non-convertible corporate debt securities such
as notes, bonds and debentures that have remaining maturities of not more than
397 calendar days and that are rated "Aa" or better by Moody's or "AA" or better
by S&P or Fitch, and variable amount master demand notes. A variable amount
master demand note differs from ordinary commercial paper in that it is issued
pursuant to a written agreement between the issuer and the holder. Its amount
may from time to time be increased by the holder (subject to an agreed maximum)
or decreased by the holder or the issuer and is payable on demand. The rate of
interest varies pursuant to an agreed-upon formula. Generally, master demand
notes are not rated by a rating agency. However, the Fund may invest in a master
demand note that, if not rated, is in the opinion of the Adviser of an
investment quality comparable to rated securities in which the Fund may invest.
The Adviser monitors the issuers of such master demand notes on a daily basis.
Transfer of such notes is usually restricted by the issuer, and there is no
secondary trading market for such notes. The Fund may not invest in a master
demand note if, as a result, more than 10% of the value of its total net assets
would be invested in such notes.
Municipal obligations, which are debt obligations issued by or on
behalf of states, cities, municipalities and other public authorities, and may
be general obligation, revenue, or industrial development bonds, include
municipal bonds, municipal notes and municipal commercial paper.
The Fund's investments in municipal bonds are limited to bonds that are
rated at the date of purchase "Aa" or better by Moody's or "AA" or better by S&P
or Fitch.
The Fund's investments in municipal notes will be limited to notes that
are rated at the date of purchase "MIG 1" or "MIG 2" (or "VMIG 1" or "VMIG 2" in
the case of an issue having a variable rate demand feature) by Moody's, "SP-1"
or "SP-1+" by S&P or "F-1" or "F-1+" by Fitch.
Municipal commercial paper is a debt obligation with a stated maturity
of 270 days or less that is issued to finance seasonal working capital needs or
as short-term financing in anticipation of longer-term debt. The Fund may invest
in municipal commercial paper that is rated at the date of purchase "P-1" or
"P-2" by Moody's, "A-1" or "A-2" or "A-1+" by S&P or "F-1" by Fitch. If a
municipal obligation is not rated, the Fund may purchase the obligation if, in
the opinion of the Adviser, it is of investment quality comparable to other
rated investments that are permitted by the Fund.
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For purposes of determining the percentage of the Fund's total assets
invested in securities of issuers having their principal business activities in
a particular industry, asset backed securities will be classified separately,
based on the nature of the underlying assets, according to the following
categories: captive auto, diversified, retail and consumer loans, captive
equipment and business, business trade receivables, nuclear fuel and capital and
mortgage lending.
All of the securities in which the Fund will invest must meet credit,
quality and diversification standards applied by the Adviser pursuant to
procedures established by the Board of Trustees. Should an issue of securities
cease to be rated or if its rating is reduced below the minimum required for
purchase by the Fund, the Adviser will dispose of any such security, as soon as
practicable, unless the Trustees of the Trust determine that such disposal would
not be in the best interests of the Fund.
In addition, the Fund may invest in variable or floating rate
obligations, obligations backed by bank letters of credit, when-issued
securities and securities with put features.
Master/feeder structure
The Board of Trustees has the discretion to retain the current
distribution arrangement for the Fund while investing in a master fund in a
master/feeder fund structure as described below.
A master/feeder fund structure is one in which a fund (a "feeder
fund"), instead of investing directly in a portfolio of securities, invests most
or all of its investment assets in a separate registered investment company (the
"master fund") with substantially the same investment objective and policies as
the feeder fund. Such a structure permits the pooling of assets of two or more
feeder funds, preserving separate identities or distribution channels at the
feeder fund level. Based on the premise that certain of the expenses of
operating an investment portfolio are relatively fixed, a larger investment
portfolio may eventually achieve a lower ratio of operating expenses to average
net assets. An existing investment company is able to convert to a feeder fund
by selling all of its investments, which involves brokerage and other
transaction costs and realization of a taxable gain or loss, or by contributing
its assets to the master fund and avoiding transaction costs and, if proper
procedures are followed, the realization of taxable gain or loss.
Investment Restrictions
Unless specified to the contrary, the following restrictions are
fundamental and may not be changed without the approval of a majority of the
outstanding voting securities of the Fund involved which, under the Investment
Company Act of 1940 (the "1940 Act") and the rules thereunder and as used in
this Statement of Additional Information, means the lesser of (1) 67% or more of
the voting securities present at such meeting, if the holders of more than 50%
of the outstanding voting securities of the Fund are present or represented by
proxy, or (2) more than 50% of the outstanding voting securities of the Fund.
Any investment restrictions herein which involve a maximum percentage
of securities or assets shall not be considered to be violated unless an excess
over the percentage occurs immediately after and is caused by an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund.
The Fund has elected to be classified as a diversified series of an
open-end investment company.
In addition, as a matter of fundamental policy, the Fund may not:
(1) borrow money, except as permitted under the 1940 Act, as
amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;
(2) issue senior securities, except as permitted under the 1940
Act, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;
(3) engage in the business of underwriting securities issued by
others, except to the extent that the Fund may be deemed to be
an underwriter in connection with the disposition of portfolio
securities;
(4) purchase or sell real estate, which term does not include
securities of companies which deal in real estate or mortgages
or investments secured by real estate or interests therein,
except that the Fund
3
<PAGE>
reserves freedom of action to hold and to sell real estate
acquired as a result of the Fund's ownership of securities;
(5) purchase physical commodities or contracts relating to
physical commodities;
(6) make loans except as permitted under the Investment Company
Act of 1940, as amended, and as interpreted or modified by
regulatory authority having jurisdiction, from time to time;
or
(7) concentrate its investments in a particular industry, as that
term is used in the 1940 Act, as amended, and as interpreted
or modified by regulatory authority having jurisdiction, from
time to time. (The Fund's concentration in the banking
industry is described below.)
As a matter of nonfundamental policy, the Fund currently does not intend to:
(1) borrow money in an amount greater than 5% of its total assets,
except for temporary or emergency purposes; or
(2) lend portfolio securities in an amount greater than 5% of its
total assets.
ADDITIONAL PERMITTED INVESTMENT ACTIVITIES
Municipal Notes. The Fund may invest in municipal notes. Municipal notes
include, but are not limited to, tax anticipation notes ("TANs"), bond
anticipation notes ("BANs"), revenue anticipation notes ("RANs"), construction
loan notes and project notes. Municipal notes generally have maturities at the
time of issuance of three years or less. Notes sold as interim financing in
anticipation of collection of taxes, a bond sale or receipt of other revenues
are usually general obligations of the issuer. Project notes are issued by local
housing authorities to finance urban renewal and public housing projects and are
secured by the full faith and credit of the U.S. Government.
TANs An uncertainty in a municipal issuer's capacity to raise taxes as
a result of such things as a decline in its tax base or a rise in
delinquencies could adversely affect the issuer's ability to meet its
obligations on outstanding TANs. Furthermore, some municipal issuers
mix various tax proceeds into a general fund that is used to meet
obligations other than those of the outstanding TANs. Use of such a
general fund to meet various obligations could affect the likelihood of
making the issuer's payments on TANs.
BANs The ability of a municipal issuer to meet its obligations on its
BANs is primarily dependent on the issuer's adequate access to the
longer term municipal bond market and the likelihood that the proceeds
of such bond sales will be used by the issuers to pay the principal of,
and interest on, BANs.
RANs A decline in the receipt of certain revenues, such as anticipated
revenues from another level of government, could adversely affect an
issuer's ability to meet its obligations on outstanding RANs. In
addition, the possibility that the revenues would, when received, be
used to meet other obligations could affect the ability of the issuer
to pay the principal of, and interest on, RANs.
Interfund Borrowing and Lending Program. The Fund has received exemptive relief
from the Securities and Exchange Commission (the "SEC") which permits the Fund
to participate in an interfund lending program among certain investment
companies advised by the Adviser. The interfund lending program allows the
participating funds to borrow money from and loan money to each other for
temporary or emergency purposes. The program is subject to a number of
conditions designed to ensure fair and equitable treatment of all participating
funds, including the following: (1) no fund may borrow money through the program
unless it receives a more favorable interest rate than a rate approximating the
lowest interest rate at which bank loans would be available to any of the
participating funds under a loan agreement; and (2) no fund may lend money
through the program unless it receives a more favorable return than that
available from an investment in repurchase agreements and, to the extent
applicable, money market cash sweep arrangements. In addition, a fund may
participate in the program only if and to the extent that such participation is
consistent with the fund's investment objectives and policies (for instance,
money market funds would normally participate only as lenders and tax exempt
funds only as borrowers). Interfund loans and borrowings may extend overnight,
but could have a maximum duration of seven days. Loans may be called on one
day's notice. A fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a lending
fund could result in a lost
4
<PAGE>
investment opportunity or additional costs. The program is subject to the
oversight and periodic review of the Boards of the participating funds. To the
extent the Fund is actually engaged in borrowing through the interfund lending
program, the Fund, as a matter of non-fundamental policy, may not borrow for
other than temporary or emergency purposes (and not for leveraging).
Loans of Portfolio Securities. The Fund may lend securities from its portfolio
to brokers, dealers and financial institutions if cash or cash equivalent
collateral, including letters of credit, marked-to-market daily and equal to at
least 100% of the current market value of the securities loaned (including
accrued interest and dividends thereon) plus the interest payable to the Fund
with respect to the loan is maintained by the borrower with the Fund in a
segregated account. In determining whether to lend a security to a particular
broker, dealer or financial institution, the Adviser will consider all relevant
facts and circumstances, including the creditworthiness of the broker, dealer or
financial institution. The Fund will not enter into any security lending
arrangement having a duration of longer than one year. Securities that the Fund
may receive as collateral will not become part of the Fund at the time of the
loan. In the event of a default by the borrower, the Fund will, if permitted by
law, dispose of the collateral except for such part thereof that is a security
in which the Fund is permitted to invest. During the time securities are on
loan, the borrower will pay the Fund any accrued income on those securities, and
the Fund may invest the cash collateral and earn additional income or receive an
agreed upon fee from a borrower that has delivered cash equivalent collateral.
The Fund will not lend securities having a value that exceeds 5% of the current
value of its total assets. Loans of securities by the Fund will be subject to
termination at the Fund's or the borrower's option. The Fund may pay reasonable
administrative and custodial fees in connection with a securities loan and may
pay a negotiated portion of the interest or fee earned with respect to the
collateral to the borrower or the placing broker. Borrowers and placing brokers
may not be affiliated, directly or indirectly, with the Trust or the Adviser.
Investments in the Banking Industry. To the extent the Fund invests in the
banking industry, the Fund will have correspondingly greater exposure to the
risk factors which are characteristic of such investments. Sustained increases
in interest rates can adversely affect the availability or liquidity and cost of
capital funds for a bank's lending activities, and a deterioration in general
economic conditions could increase the exposure to credit losses. In addition,
the value of the investment return on the Fund's shares could be affected by
economic or regulatory developments in or related to the banking industry, and
the effects of competition within the banking industry as well as with other
types of financial institutions.
Obligations of U.S. Government agencies and instrumentalities. Obligations of
U.S. Government agencies and instrumentalities are debt securities issued or
guaranteed by U.S. Government-sponsored enterprises and federal agencies. Some
of such obligations are supported by (a) the full faith and credit of the U.S.
Treasury (such as Government National Mortgage Association participation
certificates), (b) the limited authority of the issuer to borrow form the U.S.
Treasury (such as securities of the Federal Home Loan Bank), (c) the authority
of the U.S. Government to purchase certain obligations of the issuer (such as
securities of the Fannie Mae), or (d) only the credit of the issuer. In the case
of obligations not backed by the full faith and credit of the U.S. Government,
the investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment, which agency may be privately owned. The Fund
will invest in obligations of U.S. Government agencies and instrumentalities
only when the Adviser is satisfied that the credit risk with respect to the
issuer is minimal.
Floating and Variable Rate Instruments. Certain of the obligations that the Fund
may purchase have a floating or variable rate of interest. Such obligations bear
interest at rates that are not fixed, but which vary with changes in specified
market rates or indices, such as the Prime Rate, and at specified intervals.
Repurchase Agreements. The Fund may enter into repurchase agreements with any
member bank of the Federal Reserve System or any broker/dealer which is
recognized as a reporting government securities dealer if the creditworthiness
of the bank or broker/dealer has been determined by the Adviser to be at least
as high as that of other obligations the Fund may purchase or to be at least
equal to that of issuers of commercial paper rated within the two highest
ratings categories assigned by Moody's, S&P or Fitch.
A repurchase agreement provides a means for the Fund to earn income on
funds for periods as short as overnight. It is an arrangement under which the
purchaser (i.e., the Fund) acquires a security ("Obligation") and the seller
agrees, at the time of sale, to repurchase the Obligation at a specified time
and price. Securities subject to a repurchase agreement are held in a segregated
account and, as described in more detail below, the value of such securities is
kept at least equal to the repurchase price on a daily basis. The repurchase
price may be higher than the purchase
5
<PAGE>
price, the difference being income to the Fund, or the purchase and repurchase
prices may be the same, with interest at a stated rate due to the Fund together
with the repurchase price upon repurchase. In either case, the income to the
Fund is unrelated to the interest rate on the Obligation itself. Obligations
will be held by the custodian or in the Federal Reserve Book Entry System.
For purposes of the 1940 Act, a repurchase agreement is deemed to be a
loan from the Fund to the seller of the Obligation subject to the repurchase
agreement and is therefore subject to the Fund's investment restriction
applicable to loans. It is not clear whether a court would consider the
Obligation purchased by the Fund subject to a repurchase agreement as being
owned by the Fund or as being collateral for a loan by the Fund to the seller.
In the event of the commencement of bankruptcy or insolvency proceedings with
respect to the seller of the Obligation before repurchase of the Obligation
under a repurchase agreement, the Fund may encounter delay and incur costs
before being able to sell the security. Delays may involve loss of interest or
decline in price of the Obligation. If the court characterizes the transaction
as a loan and the Fund has not perfected a security interest in the Obligation,
the Fund may be required to return the Obligation to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, the
Fund would be at risk of losing some or all of the principal and income involved
in the transaction. As with any unsecured debt Obligation purchased for the
Fund, the Adviser seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller of the Obligation. Apart from the risk of bankruptcy or insolvency
proceedings, there is also the risk that the seller may fail to repurchase the
Obligation, in which case the Fund may incur a loss if the proceeds to the Fund
of the sale to a third party are less than the repurchase price. However, if the
market value (including interest) of the Obligation subject to the repurchase
agreement becomes less than the repurchase price (including interest), the Fund
will direct the seller of the Obligation to deliver additional securities so
that the market value (including interest) of all securities subject to the
repurchase agreement will equal or exceed the repurchase price.
Corporate Obligations. Investment in corporate debt obligations involves credit
and interest rate risk. The value of fixed-income investments will fluctuate
with changes in interest rates and bond market conditions, tending to rise as
interest rates decline and to decline as interest rates rise. Corporate debt
obligations generally offer less current yield than securities of lower quality,
but lower-quality securities generally have less liquidity, greater credit and
market risk, and as a result, more price volatility. Longer term bonds are,
however, generally more volatile than bonds with shorter maturities.
Commercial Paper. Commercial paper represents short-term unsecured promissory
notes issued in bearer form by bank holding companies, corporations and finance
companies. The Fund may invest in commercial paper that is rated "Prime-1" by
Moody's or "A-1" by S&P or, if not rated by Moody's or S&P, is issued by
companies having an outstanding debt issue rated Aaa or Aa by Moody's or AAA or
AA by S&P.
Letters of Credit. Municipal obligations, including certificates of
participation, commercial paper and other short-term obligations, may be backed
by an irrevocable letter of credit of a bank which assumes the obligation for
payment of principal and interest in the event of default by the issuer. Only
banks which, in the opinion of the Adviser, are of investment quality comparable
to other permitted investments of the Fund may be used for letter of credit
backed investments.
Securities with Put Rights. The Fund may enter into put transactions with
respect to obligations held in its portfolio with broker/dealers pursuant to a
rule under the 1940 Act, and with commercial banks.
The right of the Fund to exercise a put is unconditional and
unqualified. A put is not transferable by the Fund, although the Fund may sell
the underlying securities to a third party at any time. If necessary and
advisable, any Fund may pay for certain puts either separately in cash or by
paying a higher price for portfolio securities that are acquired subject to such
a put (thus reducing the yield to maturity otherwise available for the same
securities). The Fund expects, however, that puts generally will be available
without the payment of any direct or indirect consideration.
The Fund may enter into puts only with banks or broker/dealers that, in
the opinion of the Adviser, present minimal credit risks. The ability of the
Fund to exercise a put will depend on the ability of the bank or broker/dealer
to pay for the underlying securities at the time the put is exercised. In the
event that a bank or broker/dealer should default on its obligation to
repurchase an underlying security, the Fund might be unable to recover all or a
portion of any loss sustained from having to sell the security elsewhere.
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<PAGE>
The Fund intends to enter into puts solely to maintain liquidity and
does not intend to exercise its rights thereunder for trading purposes. The puts
will only be for periods substantially less than the life of the underlying
security. The acquisition of a put will not affect the valuation by the Fund of
the underlying security. The actual put will be valued at zero in determining
net asset value of the Fund. Where the Fund pays directly or indirectly for a
put, its cost will be reflected as an unrealized loss for the period during
which the put is held by the Fund and will be reflected in realized capital gain
or loss when the put is exercised or expires. If the value of the underlying
security increases, the potential for unrealized gain or realized gain is
reduced by the cost of the put. The maturity of a municipal obligation purchased
by the Fund will not be considered shortened by any put to which such obligation
is subject.
When-Issued Securities. The Fund may purchase securities on a "when-issued" or
"forward delivery" basis for payment and delivery at a later date. The price of
such securities, which is generally expressed in yield terms, is generally fixed
at the time the commitment to purchase is made, but delivery and payment for the
when-issued or forward delivery securities takes place at a later date. During
the period between purchase and settlement, no payment is made by the purchasing
Fund to the issuer and no interest on the when-issued or forward delivery
securities accrues to the Fund. To the extent that assets of the Fund are held
in cash pending the settlement of a purchase of securities, that Fund will earn
no income; however, it is the Fund's intention to be fully invested to the
extent practicable and subject to the policies stated above. While when-issued
or forward delivery securities may be sold prior to the settlement date, the
Fund intends to purchase such securities with the purpose of actually acquiring
them unless a sale appears desirable for investment reasons. At the time the
Fund makes the commitment to purchase a security on a when-issued or forward
delivery basis, it will record the transaction and reflect the value of the
security in determining its net asset value. At the time of settlement, the
market value of the when-issued or forward delivery securities may be more or
less than the purchase price. The Fund does not believe that its net asset value
or income will be adversely affected by its purchase of securities on a
when-issued or forward delivery basis.
Illiquid Securities. The Fund may occasionally purchase securities other than in
the open market. While such purchases may often offer attractive opportunities
for investment not otherwise available on the open market, the securities so
purchased are often "restricted securities" or "not readily marketable," i.e.,
securities which cannot be sold to the public without registration under the
Securities Act of 1933 or the availability of an exemption from registration
(such as Rules 144 or 144A) or because they are subject to other legal or
contractual delays in or restrictions on resale. This investment practice,
therefore, could have the effect of increasing the level of illiquidity of the
Fund. It is the Fund's policy that illiquid securities (including repurchase
agreements of more than seven days duration, certain restricted securities, and
other securities which are not readily marketable) may not constitute, at the
time of purchase, more than 10% of the value of the Fund's net assets. The
Trust's Board of Trustees has approved guidelines for use by the Adviser in
determining whether a security is illiquid.
Generally speaking, restricted securities may be sold (i) only to
qualified institutional buyers; (ii) in a privately negotiated transaction to a
limited number of purchasers; (iii) in limited quantities after they have been
held for a specified period of time and other conditions are met pursuant to an
exemption from registration. Issuers of restricted securities may not be subject
to the disclosure and other investor protection requirements that would be
applicable if their securities were publicly traded. If adverse market
conditions were to develop during the period between the Fund's decision to sell
a restricted or illiquid security and the point at which the Fund is permitted
or able to sell such security, the Fund might obtain a price less favorable than
the price that prevailed when it decided to sell. Where a registration statement
is required for the resale of restricted securities, the Fund may be required to
bear all or part of the registration expenses. The Fund may be deemed to be an
"underwriter" for purposes of the 1933 Act when selling restricted securities to
the public and, in such event, the Fund may be liable to purchasers of such
securities if the registration statement prepared by the issuer is materially
inaccurate or misleading.
The Adviser will monitor the liquidity of such restricted securities
subject to the supervision of the Board of Trustees. In reaching liquidity
decisions, the Adviser will consider the following factors: (1) the frequency of
trades and quotes for the security, (2) the number of dealers wishing to
purchase or sell the security and the number of their potential purchasers, (3)
dealer undertakings to make a market in the security, and (4) the nature of the
security and the nature of the marketplace trades (i.e. the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer).
Real Estate. The Fund has reserved the freedom of action to purchase or sell
real estate. In the event that the Fund makes such investments, changes in the
financial condition or market assessment of the financial condition of these
entities could have a significant adverse impact on the Fund. Consequently, if
the Fund did make such investments, an
7
<PAGE>
investment in the Fund may be riskier than an investment in a money market fund
that does not reserve the freedom of action to purchase or sell real estate.
Maintenance of $1.00 Net Asset Value and Credit Quality. Pursuant to a Rule of
the SEC, the Fund effects sales, redemptions and repurchases at the net asset
value per share, normally $1.00. In fulfillment of their responsibilities under
that Rule, the Trustees of the Fund have approved policies established by the
Fund's Adviser reasonably calculated to prevent the Fund's net asset value per
share from deviating from $1.00 except under unusual or extraordinary
circumstances and the Trustees of the Fund will periodically review the
Adviser's operations under such policies at regularly scheduled Trustees'
meetings. Those policies include a weekly monitoring by the Adviser of
unrealized gains and losses in the Fund's portfolio, and when necessary, in an
effort to avoid deviation, taking corrective action, such as adjusting the
maturity of the portfolio, or, if possible, realizing gains or losses to offset
in part unrealized losses or gains. The result of those policies may be that the
yield on shares of the Fund will be lower than would be the case if the policies
were not in effect. Such policies also provide for certain action to be taken
with respect to portfolio securities which experience a downgrade in rating or
suffer a default.
Securities eligible for investment by the Fund are those securities
which are generally rated (or issued by an issuer with comparable securities
rated) in the highest short-term rating category by at least two rating services
(or by one rating service, if no other rating agency has issued a rating with
respect to that security). These securities are known as "first tier
securities." Securities generally rated (or issued by an issuer with comparable
securities rated) in the top two categories by at least two rating agencies (or
one, if only one rating agency has rated the security) which do not qualify as
first tier securities are known as "second tier securities." To ensure diversity
of the Fund's investments, as a matter of non-fundamental policy, the Fund will
not invest more than 5% of its total assets in the securities of a single
issuer, other than the U.S. Government. The Fund may, however, invest more than
5% of its total assets in the first tier securities of a single issuer for a
period of up to three business days after purchase, although the Fund may not
make more than one such investment at any time during such period. The Fund may
not invest more than 5% of its total assets in securities which were second tier
securities when acquired by the Fund. Further, the Fund may not invest more than
the greater of (1) 1% of its total assets, or (2) one million dollars, in the
securities of a single issuer which were second tier securities when acquired by
the Fund.
PURCHASING SHARES -- PRIME RESERVE CLASS S AND CLASS AARPSHARES, PREMIUM
CLASS S AND CLASS AARP SHARES, MANAGED SHARES
The Fund has specific minimum initial investment requirements for each
class of shares as follows:
<TABLE>
------------------------------------------ ------------------------------------- --------------------------------------
Class of Shares Minimum Initial Investment Subsequent Minimum Investment
------------------------------------------ ------------------------------------- --------------------------------------
<S> <C> <C>
Prime Reserve Class S $10,000 $1,000
------------------------------------------ ------------------------------------- --------------------------------------
Prime Reserve Class AARP $10,000 [ ]
------------------------------------------ ------------------------------------- --------------------------------------
Premium Class S $25,000 $1,000
------------------------------------------ ------------------------------------- --------------------------------------
Premium Class AARP $25,000 [ ]
------------------------------------------ ------------------------------------- --------------------------------------
Managed Shares $100,000 $1,000 (regular accounts)
$100 (IRAs)
$50 or more (Automatic Investment
Plan)
------------------------------------------ ------------------------------------- --------------------------------------
</TABLE>
The minimum investment requirements may be waived or lowered for
investments effected through banks and other institutions that have entered into
special arrangements with the Fund and for investments effected on a group basis
by certain other entities and their employees, such as pursuant to a payroll
deduction plan and for investments made in an Individual Retirement Account
offered by the Fund. Investment minimums may also be waived for Trustees and
officers of the Trust. The Fund, Scudder Investor Services, Inc. and Cash
Products Group each reserves the right to reject any purchase order. The Fund
will be invested in full and fractional shares.
8
<PAGE>
Wire Transfer of Federal Funds
Orders for shares of the Fund will become effective when an investor's
bank wire order or check is converted into federal funds (monies credited to the
account of State Street Bank and Trust Company (the "Custodian") with its
registered Federal Reserve Bank). If payment is transmitted by the Federal
Reserve Wire System, the order will become effective upon receipt. Orders will
be executed at 4:00 p.m. on the same day if a bank wire or check is converted to
federal funds or a federal funds' wire is received by 4:00 p.m. In addition, if
investors known to the Fund notify the Fund by 4:00 p.m. that they intend to
wire federal funds to purchase shares of the Fund on any business day and if
monies are received in time to be invested, orders will be executed at the net
asset value per share determined at 4:00 p.m. the same day. Wire transmissions
may, however, be subject to delays of several hours, in which event the
effectiveness of the order will be delayed. Payments by a bank wire other than
the Federal Reserve Wire System may take longer to be converted into federal
funds. When payment for shares is by check drawn on any member of the Federal
Reserve System, federal funds normally become available to the Fund on the
business day after the check is deposited.
Shares of the Fund may be purchased by writing or calling State Street
Bank and Trust Company (the "Transfer Agent"). Orders for shares of a particular
class of the Fund will be executed at the net asset value per share of such
class next determined after an order has become effective.
Checks drawn on a non-member bank or a foreign bank may take
substantially longer to be converted into federal funds and, accordingly, may
delay the execution of an order. Checks must be payable in U.S. dollars and will
be accepted subject to collection at full face value.
By investing in the Fund, a shareholder appoints the Transfer Agent to
establish an open account to which all shares purchased will be credited,
together with any dividends and capital gains distributions that are paid in
additional shares.
Additional Information About Making Subsequent Investments by
QuickBuy
Shareholders, whose predesignated bank account of record is a member of
the Automated Clearing House Network (ACH) and who have elected to participate
in the QuickBuy program may purchase shares of the Fund by telephone. Through
this service shareholders may purchase up to $250,000. To purchase shares by
QuickBuy, shareholders should call before the close of regular trading on the
New York Stock Exchange, Inc. (the "Exchange"), normally 4 p.m. eastern time.
Proceeds in the amount of your purchase will be transferred from your bank
checking account two or three business days following your call. For requests
received by the close of regular trading on the Exchange, shares will be
purchased at the net asset value per share calculated at the close of trading on
the day of your call. QuickBuy requests received after the close of regular
trading on the Exchange will begin their processing and be purchased at the net
asset value calculated the following business day. If you purchase shares by
QuickBuy and redeem them within seven days of the purchase, the Fund may hold
the redemption proceeds for a period of up to seven business days. If you
purchase shares and there are insufficient funds in your bank account the
purchase will be canceled and you will be subject to any losses or fees incurred
in the transaction. QuickBuy transactions are not available for most retirement
plan accounts. However, QuickBuy transactions are available for Scudder IRA
accounts.
In order to request purchases by QuickBuy, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account from which the purchase payment will be debited.
New investors wishing to establish QuickBuy may so indicate on the application.
Existing shareholders who wish to add QuickBuy to their account may do so by
completing a QuickBuy Enrollment Form. After sending in an enrollment form,
shareholders should allow 15 days for this service to be available.
The Fund employs procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that the Fund does not follow such procedures, it may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Fund will not be
liable for acting upon instructions communicated by telephone that it reasonably
believes to be genuine.
9
<PAGE>
Share Certificates
Due to the desire of the Fund's management to afford ease of
redemption, certificates will not be issued to indicate ownership in the Fund.
Share certificates now in a shareholder's possession may be sent to the Fund's
Transfer Agent for cancellation and credit to such shareholder's account.
Shareholders who prefer may hold the certificates in their possession until they
wish to exchange or redeem such shares.
All issued and outstanding shares of what were formerly AARP Funds that
were subsequently reorganized into existing Scudder Funds were simultaneously
cancelled on the books of the AARP Funds. Share certificates representing
interests in shares of the relevant AARP Fund will represent a number of shares
of the Class AARP of the relevant Scudder Fund into which the AARP Fund was
reorganized. The Class AARP shares of each fund will not issue certificates
representing shares received in connection with the reorganization.
Other Information
The Fund has authorized certain members of the NASD other than the
Distributor to accept purchase and redemption orders for its shares. Those
brokers may also designate other parties to accept purchase and redemption
orders on the Fund's behalf. Orders for purchase or redemption will be deemed to
have been received by the Fund when such brokers or their authorized designees
accept the orders. Subject to the terms of the contract between the Fund and the
broker, ordinarily orders will be priced at a class's net asset value next
computed after acceptance by such brokers or their authorized designees.
Further, if purchases or redemptions of the Fund's shares are arranged and
settlement is made at an investor's election through any other authorized NASD
member, that member may, at its discretion, charge a fee for that service. The
Board of Trustees and the Distributor, each has the right to limit the amount of
purchases by, and to refuse to sell to, any person. The Trustees and the
Distributor may suspend or terminate the offering of shares of the Fund at any
time for any reason.
The "Tax Identification Number" section of the Application must be
completed when opening an account. Applications and purchase orders without a
certified tax identification number and certain other certified information
(e.g., from exempt organizations a certification of exempt status), will be
returned to the investor. The Fund reserves the right, following 30 days'
notice, to redeem all shares in accounts without a correct certified Social
Security or tax identification number. A shareholder may avoid involuntary
redemption by providing the Fund with a tax identification number during the
30-day notice period.
The Trust may issue shares at net asset value in connection with any
merger or consolidation with, or acquisition of the assets of, any investment
company or personal holding company, subject to the requirements of the 1940
Act.
EXCHANGES AND REDEMPTIONS -- PRIME RESERVE CLASS S, PRIME RESERVE CLASS AARP,
PREMIUM CLASS S, PREMIUM CLASS AARP AND MANAGED SHARES
Payment of redemption proceeds may be made in securities. The Trust may
suspend the right of redemption with respect to the Fund during any period when
(i) trading on the Exchange is restricted or the Exchange is closed, other than
customary weekend and holiday closings, (ii) the SEC has by order permitted such
suspension or (iii) an emergency, as defined by rules of the SEC, exists making
disposal of portfolio securities or determination of the value of the net assets
of the Fund not reasonably practicable.
A shareholder's Fund account remains open for up to one year following
complete redemption and all costs during the period will be borne by the Trust.
This permits an investor to resume investments.
Exchanges
Exchanges are comprised of a redemption from one Scudder fund and a
purchase into another Scudder fund. The purchase side of the exchange either may
be an additional investment into an existing account or may involve opening a
new account in the other fund. When an exchange involves a new account, the new
account will be established with the same registration, tax identification
number, address, telephone redemption option, "Scudder Automated Information
Line" (SAIL(TM)) transaction authorization and dividend option as the existing
account. Other features will not carry over automatically to the new account.
10
<PAGE>
--------------------------------------------- ----------------------------------
Class of shares Minimum Exchange Amount
--------------------------------------------- ----------------------------------
Prime Reserve Class S $10,000
--------------------------------------------- ----------------------------------
Prime Reserve Class AARP $10,000
--------------------------------------------- ----------------------------------
Premium Class S $25,000
--------------------------------------------- ----------------------------------
Premium Class AARP $25,000
--------------------------------------------- ----------------------------------
Managed [ ]
--------------------------------------------- ----------------------------------
Exchanges into other Scudder Funds may have lower minimum exchange
requirements. When an exchange represents an additional investment into an
existing account, the account receiving the exchange proceeds must have
identical registration, tax identification number, address, and account
options/features as the account of origin. Exchanges into an existing account
must be for $1,000 or more. If the account receiving the exchange proceeds is to
be different in any respect, the exchange request must be in writing and must
contain an original signature guarantee.
Exchange orders received before the close of regular trading on the
Exchange on any business day ordinarily will be executed at the respective net
asset values determined on that day. Exchange orders received after the close of
regular trading on the Exchange will be executed on the following business day.
Investors may also request, at no extra charge, to have exchanges
automatically executed on a predetermined schedule from one Scudder fund to an
existing account in another Scudder fund, at current net asset value, through
Scudder's Automatic Exchange Program. Exchanges must be for a minimum of $50.
Shareholders may add this free feature over the telephone or in writing.
Automatic exchanges will continue until the shareholder requests by telephone or
in writing to have the feature removed, or until the originating account is
depleted. The Trust and the Transfer Agent each reserves the right to suspend or
terminate the privilege of the Automatic Exchange Program at any time.
There is no charge to the shareholder for any exchange described above.
An exchange into another Scudder fund is a redemption of shares, and therefore
may result in tax consequences (gain or loss) to the shareholder and the
proceeds of such exchange may be subject to backup withholding. (See "TAXES.")
Investors currently receive the exchange privilege, including exchange
by telephone, automatically without having to elect it. The Fund employs
procedures, including recording telephone calls, testing a caller's identity,
and sending written confirmation of telephone transactions, designed to give
reasonable assurance that instructions communicated by telephone are genuine,
and to discourage fraud. To the extent that the Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. The Fund will not be liable for acting upon instructions
communicated by telephone that it reasonably believes to be genuine. The Fund
and the Transfer Agent each reserves the right to suspend or terminate the
privilege of exchanging by telephone or fax at any time.
The Scudder funds into which investors may make an exchange are listed
under "THE SCUDDER FAMILY OF FUNDS" herein. Before making an exchange,
shareholders should obtain from Scudder Investor Services, Inc. a prospectus of
the Scudder fund into which the exchange is being contemplated. The exchange
privilege may not be available for certain Scudder funds or classes of Scudder
Funds. For more information, please call 1-800-225-5163. Investors interested in
exchanging Prime Reserve Class AARP or Premium Class AARP shares of the Fund
should call 1-800-253-2277 for more information.
Scudder retirement plans may have different exchange requirements.
Please refer to appropriate plan literature.
Redemption by Telephone
In order to request redemptions by telephone, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account to which the redemption proceeds are to be sent.
11
<PAGE>
Shareholders currently receive the right to redeem up to $100,000 to their
address of record automatically, without having to elect it. Shareholders may
also request to have the proceeds mailed or wired to their pre-designated bank
account. NEW INVESTORS wishing to establish the telephone redemption privilege
must complete the appropriate section on the application.
(b) EXISTING SHAREHOLDERS (except those who are Scudder IRA,
Scudder pension and profit-sharing, Scudder 401(k) and Scudder
403(b) Planholders) who wish to establish telephone redemption
to a pre-designated bank account or who want to change the
bank account previously designated to receive redemption
proceeds should either return a Telephone Redemption Option
Form (available upon request) or send a letter identifying the
account and specifying the exact information to be changed.
The letter must be signed exactly as the shareholder's name(s)
appears on the account. An original signature and an original
signature guarantee are required for each person in whose name
the account is registered.
Telephone redemption is not available with respect to shares
represented by share certificates or shares held in certain retirement accounts.
If a request for redemption to a shareholder's bank account is made by
telephone or fax, payment will be by Federal Reserve bank wire to the bank
account designated on the application, unless a request is made that the
redemption check be mailed to the designated bank account. The Prime Reserve
Class S, Prime Reserve Class AARP, Premium Class AARP and the Premium Class S
Shares have a $5 charge for wire redemptions. The Managed Shares have a $5
charge for wire redemptions unless it is for an amount of $1,000 or greater or
it is a sweep account.
Note: Investors designating a savings bank to receive their
telephone redemption proceeds are advised that if the savings
bank is not a participant in the Federal Reserve System,
redemption proceeds must be wired through a commercial bank
which is a correspondent of the savings bank. As this may
delay receipt by the shareholder's account, it is suggested
that investors wishing to use a savings bank discuss wire
procedures with their bank and submit any special wire
transfer information with the telephone redemption
authorization. If appropriate wire information is not
supplied, redemption proceeds will be mailed to the designated
bank.
The Fund employs procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that the Fund does not follow such procedures, it may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Fund will not be
liable for acting upon instructions communicated by telephone that it reasonably
believes to be genuine.
Redemption requests by telephone (technically a repurchase by agreement
between the Fund and the shareholder) of shares purchased by check will not be
accepted until the purchase check has cleared which may take up to seven
business days.
Redemption by QuickSell
Shareholders whose predesignated bank account of record is a member of
the Automated Clearing House Network (ACH) and who have elected to participate
in the QuickSell program may sell shares of the Fund by telephone. Redemptions
must be for at least $250. Proceeds in the amount of your redemption will be
transferred to your bank checking account two or three business days following
your call. For requests received by the close of regular trading on the
Exchange, normally 4:00 p.m. eastern time, shares will be redeemed at the net
asset value per share calculated at the close of trading on the day of your
call. QuickSell requests received after the close of regular trading on the
Exchange will begin their processing and be redeemed at the net asset value
calculated the following business day. QuickSell transactions are not available
for Scudder IRA accounts and most other retirement plan accounts.
In order to request redemptions by QuickSell, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account to which redemption proceeds will be credited. New
investors wishing to establish QuickSell may so indicate on the application.
Existing shareholders who wish to add QuickSell to their account may do so by
completing a QuickSell Enrollment Form. After sending in an enrollment form,
shareholders should allow 15 days for this service to be available.
12
<PAGE>
The Fund employs procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that the Fund does not follow such procedures, it may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Fund will not be
liable for acting upon instructions communicated by telephone that it reasonably
believes to be genuine.
Redemption by Mail or Fax
Any existing share certificates representing shares being redeemed must
accompany a request for redemption and be duly endorsed or accompanied by a
proper stock assignment form with signatures guaranteed.
In order to ensure proper authorization before redeeming shares, the
Transfer Agent may request additional documents such as, but not restricted to,
stock powers, trust instruments, certificates of death, appointments as
executor, certificates of corporate authority and waivers of tax (required in
some states when settling estates).
It is suggested that shareholders holding share certificates or shares
registered in other than individual names contact the Transfer Agent prior to
any redemptions to ensure that all necessary documents accompany the request.
When shares are held in the name of a corporation, trust, fiduciary agent,
attorney or partnership, the Transfer Agent requires, in addition to the stock
power, certified evidence of authority to sign. These procedures are for the
protection of shareholders and should be followed to ensure prompt payment.
Redemption requests must not be conditional as to date or price of the
redemption. Proceeds of a redemption will be sent within five days after receipt
by the Transfer Agent of a request for redemption that complies with the above
requirements. Delays of more than seven business days of payment for shares
tendered for repurchase or redemption may result, but only until the purchase
check has cleared.
The requirements for IRA redemptions are different from those for
regular accounts. For more information call 1-800-225-5163.
Redemption by Checkwriting
All new investors and existing shareholders who apply to State Street
Bank and Trust Company for checks may use them to pay any person, provided that
each check is for at least $1,000 and not more than $5 million. By using the
checks, the shareholder will receive daily dividend credit on his or her shares
until the check has cleared the banking system. Investors who purchased shares
by check may write checks against those shares only after they have been on the
Fund's book for seven business days. Shareholders who use this service may also
use other redemption procedures. No shareholder may write checks against
certificated shares. The Fund pays the bank charges for this service. However,
the Fund will review the cost of operation periodically and reserve the right to
determine if direct charges to the persons who avail themselves of this service
would be appropriate. The Fund, Scudder Service Corporation and State Street
Bank and Trust Company reserve the right at any time to suspend or terminate the
Checkwriting procedure.
Redemption-in-Kind
Although the Trust has no present intention of doing so, the Trust
reserves the right, if conditions exist which make cash payments undesirable, to
honor any request for redemption or repurchase order by making payment in whole
or in part in readily marketable securities chosen by the Fund and valued as
they are for purposes of computing the Fund's net asset value (a
redemption-in-kind). If payment is made in securities, a shareholder may incur
transaction expenses in converting these securities into cash. The Trust has
elected, however, to be governed by Rule 18f-1 under the 1940 Act as a result of
which the Fund is obligated to redeem shares, with respect to any one
shareholder during any 90 day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of that Fund at the beginning of the
period.
Minimum balances for Managed Shares
The initial minimum investment requirement in the Managed Shares of the
Fund is $100,000. Shareholders should maintain a share balance worth at least
$100,000 (which minimum amount may be changed by the Board of Trustees).
13
<PAGE>
Shareholders whose account balance falls below $100,000 for at least 30
days will be given 60 days' notice to bring the account back up to $100,000 or
more. Where a reduction in value has occurred due to a redemption or exchange
out of the account and the account balance is not increased in 60 days, the
Adviser reserves the right to redeem all shares and close the account and send
the proceeds to the shareholder's address of record. Reductions in value that
result solely from market activity will not trigger an involuntary redemption.
Minimum balances for Prime Reserve Shares, Class S and Class AARP
Initial minimum investment in these shares is $10,000. Shareholders
should maintain a share balance worth at least $7,500. Account balances will be
reviewed periodically and the Adviser reserves the right, following 60 days
written notice to shareholders, to redeem all shares in accounts that have a
value below $7,500 where such a reduction in value has occurred due to a
redemption, exchange, or transfer out of the account.
Minimum balances for Premium Shares, Class S and Class AARP
Initial minimum investment in these shares is $25,000. Shareholders
should maintain a share balance worth at least $20,000. Account balances will be
reviewed periodically and the Adviser reserves the right, following 60 days
written notice to shareholders, to redeem all shares in accounts that have a
value below $20,000 where such a reduction in value has occurred due to a
redemption, exchange, or transfer out of the account.
PURCHASING SHARES -- INSTITUTIONAL SHARES
The Fund has specific minimum initial investment requirements for each
class of shares. Institutional Shares require a $1,000,000 minimum investment
and have no minimum subsequent investment. The minimum investment requirements
may be waived or lowered for investments effected through banks and other
institutions that have entered into special arrangements with the Fund and for
investments effected on a group basis by certain other entities and their
employees, such as pursuant to a payroll deduction plan and for investments made
in an Individual Retirement Account offered by the Fund. Investment minimums may
also be waived for Trustees and officers of theTrust. The Fund, Scudder Investor
Services, Inc. and Scudder Financial Intermediary Services Group each reserves
the right to reject any purchase order. The Fund will be invested in full and
fractional shares.
Wire Transfer of Federal Funds
Orders for shares of the Fund will become effective when an investor's
bank wire order or check is converted into federal funds (monies credited to the
account of State Street Bank and Trust Company (the "Custodian") with its
registered Federal Reserve Bank). If payment is transmitted by the Federal
Reserve Wire System, the order will become effective upon receipt. Orders will
be executed at 4:00 p.m. on the same day if a bank wire or check is converted to
federal funds or a federal funds' wire is received by 4:00 p.m. In addition, if
investors known to the Fund notify the Fund by 4:00 p.m. that they intend to
wire federal funds to purchase shares of the Fund on any business day and if
monies are received in time to be invested, orders will be executed at the net
asset value per share determined at 4:00 p.m the same day. Wire transmissions
may, however, be subject to delays of several hours, in which event the
effectiveness of the order will be delayed. Payments by a bank wire other than
the Federal Reserve Wire System may take longer to be converted into federal
funds. When payment for shares is by check drawn on any member of the Federal
Reserve System, federal funds normally become available to the Fund on the
business day after the check is deposited.
Shares of the Fund may be purchased by writing or calling State Street
Bank and Trust Company (the "Transfer Agent"). Orders for shares of a particular
class of the Fund will be executed at the net asset value per share of such
class next determined after an order has become effective.
Checks drawn on a non-member bank or a foreign bank may take
substantially longer to be converted into federal funds and, accordingly, may
delay the execution of an order. Checks must be payable in U.S. dollars and will
be accepted subject to collection at full face value.
By investing in the Fund, a shareholder appoints the Transfer Agent to
establish an open account to which all shares purchased will be credited,
together with any dividends and capital gains distributions that are paid in
additional shares.
14
<PAGE>
Share Certificates
Due to the desire of the Fund's management to afford ease of
redemption, certificates will not be issued to indicate ownership in the Fund.
Share certificates now in a shareholder's possession may be sent to the Transfer
Agent for cancellation and credit to such shareholder's account. Shareholders
who prefer may hold the certificates in their possession until they wish to
exchange or redeem such shares.
The Fund has authorized certain members of the NASD other than the
Distributor to accept purchase and redemption orders for the Fund's shares.
Those brokers may also designate other parties to accept purchase and redemption
orders on the Fund's behalf. Orders for purchase or redemption will be deemed to
have been received by the Fund when such brokers or their authorized designees
accept the orders. Subject to the terms of the contract between the Fund and the
broker, ordinarily orders will be priced at the Fund's net asset value next
computed after acceptance by such brokers or their authorized designees.
Further, if purchases or redemptions of the Fund's shares are arranged and
settlement is made at an investor's election through any other authorized NASD
member, that member may, at its discretion, charge a fee for that service. The
Board of Trustees and the Distributor, also the Fund's principal underwriter,
each has the right to limit the amount of purchases by, and to refuse to sell
to, any person. The Trustees and the Distributor may suspend or terminate the
offering of shares of the Fund at any time for any reason.
REDEMPTIONS -- INSTITUTIONAL SHARES
Payment of redemption proceeds may be made in securities. The Trust may
suspend the right of redemption with respect to the Fund during any period when
(i) trading on the Exchange is restricted or the Exchange is closed, other than
customary weekend and holiday closings, (ii) the SEC has by order permitted such
suspension or (iii) an emergency, as defined by rules of the SEC, exists making
disposal of portfolio securities or determination of the value of the net assets
of the Fund not reasonably practicable.
A shareholder's Fund account remains open for up to one year following
complete redemption and all costs during the period will be borne by the Trust.
This permits an investor to resume investments.
Redemption by Wire
Shareholders may request to have redemption proceeds wired to
their pre-designated bank account. If a request for redemption to a
shareholder's bank account is made by telephone or fax, payment will be by
Federal Reserve bank wire to the bank account designated on the application,
unless a request is made that the redemption check be mailed to the designated
bank account. The Institutional Shares do not charge a wire fee.
Note: Investors designating a savings bank to receive their
telephone redemption proceeds are advised that if the savings
bank is not a participant in the Federal Reserve System,
redemption proceeds must be wired through a commercial bank
which is a correspondent of the savings bank. As this may
delay receipt by the shareholder's account, it is suggested
that investors wishing to use a savings bank discuss wire
procedures with their bank and submit any special wire
transfer information with the telephone redemption
authorization. If appropriate wire information is not
supplied, redemption proceeds will be mailed to the designated
bank.
Redemption by Telephone
In order to request redemptions by telephone, shareholders must have
completed and returned to the Transfer Agent the application, including the
designation of a bank account to which the redemption proceeds are to be sent.
Shareholders currently receive the right to redeem up to $100,000 to their
address of record automatically, without having to elect it.
(a) NEW INVESTORS wishing to establish telephone redemption to a
pre-designated bank account must complete the appropriate
section on the application.
(b) EXISTING SHAREHOLDERS who wish to establish telephone
redemption to a pre-designated bank account or who want to
change the bank account previously designated to receive
redemption payments should send a letter identifying the
account and specifying the exact information to be changed.
The
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letter must be signed exactly as the shareholder's name(s)
appears on the account. A signature and a signature guarantee
are required for each person in whose name the account is
registered.
Telephone redemption is not available with respect to shares
represented by share certificates or shares held in certain retirement accounts.
The Fund employs procedures, including recording telephone calls,
testing a caller's identity, and sending written confirmation of telephone
transactions, designed to give reasonable assurance that instructions
communicated by telephone are genuine, and to discourage fraud. To the extent
that the Fund does not follow such procedures, they may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Fund will not be
liable for acting upon instructions communicated by telephone that they
reasonably believe to be genuine.
Redemption requests by telephone (technically a repurchase by agreement
between the Fund and the shareholder) of shares purchased by check will not be
accepted until the purchase check has cleared which may take up to seven
business days.
Redemption by Mail or Fax
Any existing share certificates representing shares being redeemed must
accompany a request for redemption and be duly endorsed or accompanied by a
proper stock assignment form with signatures guaranteed.
In order to ensure proper authorization before redeeming shares, the
Transfer Agent may request additional documents such as, but not restricted to,
stock powers, trust instruments, certificates of death, appointments as
executor, certificates of corporate authority and waivers of tax (required in
some states when settling estates).
It is suggested that shareholders holding share certificates or shares
registered in other than individual names contact the Transfer Agent prior to
any redemptions to ensure that all necessary documents accompany the request.
When shares are held in the name of a corporation, trust, fiduciary, agent,
attorney or partnership, the Transfer Agent requires, in addition to the stock
power, certified evidence of authority to sign. These procedures are for the
protection of shareholders and should be followed to ensure prompt payment.
Redemption requests must not be conditional as to date or price of the
redemption. Proceeds of a redemption will be sent within five days after receipt
by the Transfer Agent of a request for redemption that complies with the above
requirements. Delays of more than seven business days of payment for shares
tendered for repurchase or redemption may result, but only until the purchase
check has cleared.
Redemption-in-Kind
Although the Trust has no present intention of doing so, the Trust
reserves the right, if conditions exist which make cash payments undesirable, to
honor any request for redemption or repurchase order by making payment in whole
or in part in readily marketable securities chosen by the Fund and valued as
they are for purposes of computing the Fund's net asset value (a
redemption-in-kind). If payment is made in securities, a shareholder may incur
transaction expenses in converting these securities into cash. The Trust has
elected, however, to be governed by Rule 18f-1 under the 1940 Act as a result of
which the Fund is obligated to redeem shares, with respect to any one
shareholder during any 90 day period, solely in cash up to the lesser of
$250,000 or 1% of the net asset value of that Fund at the beginning of the
period.
Minimum balances for Institutional Shares of Scudder Money
Market Series
The initial minimum investment requirement in the Institutional Shares
of the Fund is $1,000,000. Shareholders should maintain a share balance worth at
least $1,000,000 (which minimum amount may be changed by the Board of Trustees).
Shareholders whose account balance falls below $1,000,000 for at least
30 days may be given 60 days' notice to bring the account back up to $1,000,000
or more. Where a reduction in value has occurred due to a redemption out of the
account and the account balance is not increased in 60 days, the Adviser
reserves the right to redeem all shares and close the account and send the
proceeds to the shareholder's address of record. Reductions in value that result
solely from market activity will not trigger an involuntary redemption.
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FEATURES AND SERVICES OFFERED BY THE FUND
The No-Load Concept
Investors are encouraged to be aware of the full ramifications of
mutual fund fee structures, and of how Scudder distinguishes its Scudder Family
of Funds from the vast majority of mutual funds available today. The primary
distinction is between load and no-load funds.
Load funds generally are defined as mutual funds that charge a fee for
the sale and distribution of fund shares. There are three types of loads:
front-end loads, back-end loads, and asset-based 12b-1 fees. 12b-1 fees are
distribution-related fees charged against fund assets and are distinct from
service fees, which are charged for personal services and/or maintenance of
shareholder accounts. Asset-based sales charges and service fees are typically
paid pursuant to distribution plans adopted under 12b-1 under the 1940 Act.
A front-end load is a sales charge, which can be as high as 8.50% of
the amount invested. A back-end load is a contingent deferred sales charge,
which can be as high as 8.50% of either the amount invested or redeemed. The
maximum front-end or back-end load varies, and depends upon whether or not a
fund also charges a 12b-1 fee and/or a service fee or offers investors various
sales-related services such as dividend reinvestment. The maximum charge for a
12b-1 fee is 0.75% of a fund's average annual net assets, and the maximum charge
for a service fee is 0.25% of a fund's average annual net assets.
A no-load fund does not charge a front-end or back-end load, but can
charge a small 12b-1 fee and/or service fee against fund assets. Under the
National Association of Securities Dealers Conduct Rules, a mutual fund can call
itself a "no-load" fund only if the 12b-1 fee and/or service fee does not exceed
0.25% of a fund's average annual net assets.
Scudder pioneered the no-load concept when it created the nation's
first no-load fund in 1928, and later developed the nation's first family of
no-load mutual funds.
Internet access
World Wide Web Site -- The address of the Scudder Funds' site is
http://www.scudder.com (for Premium Shares, Prime Reserve Shares and Managed
Shares). The address of the Scudder Institutional Funds' site is
http://institutionalfunds.scudder.com. The address for the Class AARP of shares
is aarp.scudder.com.
These sites offer guidance on global investing and developing strategies to help
meet financial goals and provides access to the Scudder investor relations
department via e-mail. The sites also enable users to access or view Fund
prospectuses and profiles with links between summary information in Fund
Summaries and details in the Prospectus. Users can fill out new account forms
on-line, order free software, and request literature on funds.
Account Access (for Premium Class S, Premium Class AARP, Prime Reserve Class S
Shares, Prime Reserve Class AARP and Managed Shares) -- The Adviser is among the
first mutual fund families to allow shareholders to manage their fund accounts
through the World Wide Web. Scudder Fund shareholders can view a snapshot of
current holdings, review account activity and move assets between Scudder Fund
accounts.
The Adviser's personal portfolio capabilities -- known as SEAS (Scudder
Electronic Account Services) -- are accessible only by current Scudder Fund
shareholders who have set up a Personal Page on Scudder's Web site. Using a
secure Web browser, shareholders sign on to their account with their Social
Security number and their SAIL password. As an additional security measure,
users can change their current password or disable access to their portfolio
through the World Wide Web.
An Account Activity option reveals a financial history of transactions
for an account, with trade dates, type and amount of transaction, share price
and number of shares traded. For users who wish to trade shares between Scudder
Funds, the Fund Exchange option provides a step-by-step procedure to exchange
shares among existing fund accounts or to new Scudder Fund accounts.
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<PAGE>
Dividends and Capital Gains Distribution Options -- Premium Class S, Premium
Class AARP, Prime Reserve Class S , Prime Reserve Class AARP and Managed Shares
Investors have freedom to choose whether to receive cash or to reinvest
any dividends from net investment income or distributions from realized capital
gains in additional shares of the Fund. A change of instructions for the method
of payment must be received by the Transfer Agent at least five days prior to a
dividend record date. Shareholders also may change their dividend option either
by calling 1-800-225-5163 for Premium Class S shares, Prime Reserve Class S
shares and Managed shares and 1-800-253-2277 for Premium Class AARP and Prime
Class AARP or by sending written instructions to the Transfer Agent. Please
include your account number with your written request.
Reinvestment is usually made at the closing net asset value determined
on the business day following the record date. Investors may leave standing
instructions with the Transfer Agent designating their option for either
reinvestment or cash distribution of any income dividends or capital gains
distributions. If no election is made, dividends and distributions will be
invested in additional class shares of the Fund.
Investors may also have dividends and distributions automatically
deposited to their predesignated bank account through Scudder's Direct
Distributions Program. Shareholders who elect to participate in the Direct
Distributions Program, and whose predesignated checking account of record is
with a member bank of the Automated Clearing House Network (ACH) can have income
and capital gain distributions automatically deposited to their personal bank
account usually within three business days after the Fund pays its distribution.
A Direct Distributions request form can be obtained by calling 1-800-225-5163
for Premium Class S shares, Prime Reserve Class S shares and Managed shares and
1-800-253-2277 for Premium Class AARP and Prime Reserve Class AARP. Confirmation
statements will be mailed to shareholders as notification that distributions
have been deposited.
Investors choosing to participate in Scudder's Automatic Withdrawal
Plan must reinvest any dividends or capital gains. For most retirement plan
accounts, the reinvestment of dividends and capital gains is also required.
Reports to Shareholders
The Trust issues shareholders unaudited semiannual financial statements
and annual financial statements audited by independent accountants, including a
list of investments held and statements of assets and liabilities, operations,
changes in net assets and financial highlights. The Trust presently intends to
distribute to shareholders informal quarterly reports during the intervening
quarters, containing a statement of the investments of the Fund.
Transaction Summaries
Annual summaries of all transactions in each Fund account are available
to shareholders. The summaries may be obtained by calling 1-800-225-5163 for
Premium Shares, Prime Reserve Shares and Managed Shares or 1-800-537-3177 for
Institutional Shares.
THE SCUDDER FAMILY OF FUNDS
The Scudder Family of Funds is America's first family of mutual funds
and the nation's oldest family of no-load mutual funds; a list of Scudder's
funds follows.
MONEY MARKET
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series +
-------------
+ The institutional class of shares is not part of the Scudder Family of
Funds.
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TAX FREE MONEY MARKET
Scudder 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 Series: Conservative Portfolio
Scudder Pathway Series: Balanced Portfolio
Scudder Pathway Series: Growth Portfolio
Scudder Pathway Series: International Portfolio
-------------
* These funds are not available for sale in all states. For information,
contact Scudder Investor Services, Inc.
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<PAGE>
U.S. GROWTH AND INCOME
Scudder Balanced Fund
Scudder Dividend & Growth Fund
Scudder Growth and Income Fund
Scudder Select 500 Fund
Scudder 500 Index 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 Growth and Income Fund
Scudder International Fund***
Scudder Global Discovery Fund**
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
-------------
** Only the Scudder Shares are part of the Scudder Family of Funds.
*** Only the International Shares are part of the Scudder Family of Funds.
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Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
INDUSTRY SECTOR FUNDS
Choice Series
Scudder Health Care Fund
Scudder Technology Fund
SCUDDER PREFERRED SERIES
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small Company Fund
The net asset values of most Scudder funds can be found daily in the
"Mutual Funds" section of The Wall Street Journal under "Scudder Funds," and in
other leading newspapers throughout the country. Investors will notice the net
asset value and offering price are the same, reflecting the fact that no sales
commission or "load" is charged on the sale of shares of the Scudder funds. The
latest seven-day yields for the money-market funds can be found every Monday and
Thursday in the "Money-Market Funds" section of The Wall Street Journal. This
information also may be obtained by calling the Scudder Automated Information
Line (SAIL) at 1-800-343-2890 (for Premium Shares, Prime Reserve Shares and
Managed Shares only) or 1-800-537-1988 (for Institutional Shares).
Certain Scudder funds or classes thereof may not be available for
purchase or exchange. For more information, please call 1-800-225-5163 (for
Premium Shares, Prime Reserve Shares and Managed Shares) or 1-800-537-3177 (for
Institutional Shares).
SPECIAL PLAN ACCOUNTS
The information regarding Special Plan Accounts does not apply to
Institutional Shares of Scudder Money Market Series.
Detailed information on any Scudder investment plan, including the
applicable charges, minimum investment requirements and disclosures made
pursuant to Internal Revenue Service (the "IRS") requirements, may be obtained
by contacting Scudder Investor Services, Inc., Two International Place, Boston,
Massachusetts 02110-4103 or by calling toll free, 1-800-225-5163. The
discussions of the plans below describe only certain aspects of the federal
income tax treatment of the plan. The state tax treatment may be different and
may vary from state to state. It is advisable for an investor considering the
funding of the investment plans described below to consult with an attorney or
other investment or tax adviser with respect to the suitability requirements and
tax aspects thereof.
Shares of the Fund may also be a permitted investment under profit
sharing and pension plans and IRAs other than those offered by the Fund's
distributor depending on the provisions of the relevant plan or IRA.
None of the plans assures a profit or guarantees protection against
depreciation, especially in declining markets.
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Scudder Retirement Plans: Profit-Sharing and Money Purchase Pension Plans for
Corporations and Self-Employed Individuals
Shares of the Fund may be purchased as the investment medium under a
plan in the form of a Scudder Profit-Sharing Plan (including a version of the
Plan which includes a cash-or-deferred feature) or a Scudder Money Purchase
Pension Plan (jointly referred to as the Scudder Retirement Plans) adopted by a
corporation, a self-employed individual or a group of self-employed individuals
(including sole proprietorships and partnerships), or other qualifying
organization. Each of these forms was approved by the IRS as a prototype. The
IRS's approval of an employer's plan under Section 401(a) of the Internal
Revenue Code will be greatly facilitated if it is in such approved form. Under
certain circumstances, the IRS will assume that a plan, adopted in this form,
after special notice to any employees, meets the requirements of Section 401(a)
of the Internal Revenue Code as to form.
Scudder 401(k): Cash or Deferred Profit-Sharing Plan for Corporations and
Self-Employed Individuals
Shares of the Fund may be purchased as the investment medium under a
plan in the form of a Scudder 401(k) Plan adopted by a corporation, a
self-employed individual or a group of self-employed individuals (including sole
proprietors and partnerships), or other qualifying organization. This plan has
been approved as a prototype by the IRS.
Scudder IRA: Individual Retirement Account
Shares of the Fund may be purchased as the underlying investment for an
Individual Retirement Account ("IRA") which meets the requirements of Section
408(a) of the Internal Revenue Code.
A single individual who is not an active participant in an
employer-maintained retirement plan, a simplified employee pension plan, or a
tax-deferred annuity program (a "qualified plan"), and a married individual who
is not an active participant in a qualified plan and whose spouse is also not an
active participant in a qualified plan, are eligible to make tax deductible
contributions of up to $2,000 to an IRA prior to the year such individual
attains age 70 1/2. In addition, certain individuals who are active participants
in qualified plans (or who have spouses who are active participants) are also
eligible to make tax-deductible contributions to an IRA; the annual amount, if
any, of the contribution which such an individual will be eligible to deduct
will be determined by the amount of his, her, or their adjusted gross income for
the year. Whenever the adjusted gross income limitation prohibits an individual
from contributing what would otherwise be the maximum tax-deductible
contribution he or she could make, the individual will be eligible to contribute
the difference to an IRA in the form of nondeductible contributions.
An eligible individual may contribute as much as $2,000 of qualified
income (earned income or, under certain circumstances, alimony) to an IRA each
year (up to $2,000 per individual for married couples, even if only one spouse
has earned income). All income and capital gains derived from IRA investments
are reinvested and compound tax-deferred until distributed. Such tax-deferred
compounding can lead to substantial retirement savings.
Scudder Roth IRA: Individual Retirement Account
Shares of the Fund may be purchased as the underlying investment for a
Roth Individual Retirement Account ("Roth IRA") which meets the requirements of
Section 408A of the Internal Revenue Code.
A single individual earning below $95,000 can contribute up to $2,000
per year to a Roth IRA. The maximum contribution amount diminishes and gradually
falls to zero for single filers with adjusted gross incomes ranging from $95,000
to $110,000. Married couples earning less than $150,000 combined, and filing
jointly, can contribute a full $4,000 per year ($2,000 per IRA). The maximum
contribution amount for married couples filing jointly phases out from $150,000
to $160,000.
An eligible individual can contribute money to a traditional IRA and a
Roth IRA as long as the total contribution to all IRAs does not exceed $2,000.
No tax deduction is allowed under Section 219 of the Internal Revenue Code for
contributions to a Roth IRA. Contributions to a Roth IRA may be made even after
the individual for whom the account is maintained has attained age 70 1/2.
All income and capital gains derived from Roth IRA investments are
reinvested and compounded tax-free. Such tax-free compounding can lead to
substantial retirement savings. No distributions are required to be taken prior
to the
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death of the original account holder. If a Roth IRA has been established for a
minimum of five years, distributions can be taken tax-free after reaching age 59
1/2, for a first-time home purchase ($10,000 maximum, one-time use) or upon
death or disability. All other distributions of earnings from a Roth IRA are
taxable and subject to a 10% tax penalty unless an exception applies. Exceptions
to the 10% penalty include: disability, certain medical expenses, the purchase
of health insurance for an unemployed individual and qualified higher education
expenses.
An individual with an income of $100,000 or less (who is not married
filing separately) can roll his or her existing IRA into a Roth IRA. However,
the individual must pay taxes on the taxable amount in his or her traditional
IRA. Individuals who complete the rollover in 1998 will be allowed to spread the
tax payments over a four-year period. After 1998, all taxes on such a rollover
will have to be paid in the tax year in which the rollover is made.
Scudder 403(b) Plan
Shares of the Fund may also be purchased as the underlying investment
for tax sheltered annuity plans under the provisions of Section 403(b)(7) of the
Internal Revenue Code. In general, employees of tax-exempt organizations
described in Section 501(c)(3) of the Internal Revenue Code (such as hospitals,
churches, religious, scientific, or literary organizations and educational
institutions) or a public school system are eligible to participate in a 403(b)
plan.
Automatic Withdrawal Plan
Non-retirement plan shareholders may establish an Automatic Withdrawal
Plan to receive monthly, quarterly or periodic redemptions from his or her
account for any designated amount of $50 or more. Shareholders may designate
which day they want the automatic withdrawal to be processed. The check amounts
may be based on the redemption of a fixed dollar amount, fixed share amount,
percent of account value or declining balance. The Plan provides for income
dividends and capital gains distributions, if any, to be reinvested in
additional shares. Shares are then liquidated as necessary to provide for
withdrawal payments. Since the withdrawals are in amounts selected by the
investor and have no relationship to yield or income, payments received cannot
be considered as yield or income on the investment and the resulting
liquidations may deplete or possibly extinguish the initial investment and any
reinvested dividends and capital gains distributions. Requests for increases in
withdrawal amounts or to change the payee must be submitted in writing, signed
exactly as the account is registered, and contain signature guarantee(s). Any
such requests must be received by the Fund's Transfer Agent ten days prior to
the date of the first automatic withdrawal. An Automatic Withdrawal Plan may be
terminated at any time by the shareholder, the Trust or its agent on written
notice, and will be terminated when all shares of the Fund under the Plan have
been liquidated or upon receipt by the Trust of notice of death of the
shareholder.
An Automatic Withdrawal Plan request form can be obtained by calling
1-800-225-5163 for Premium Class S shares, Prime Reserve Class S shares and
Managed shares and 1-800-253-2277 for Premium Class AARP and Prime Reserve Class
AARP shares.
Group or Salary Deduction Plan
An investor may join a Group or Salary Deduction Plan where
satisfactory arrangements have been made with Scudder Investor Services, Inc.
for forwarding regular investments through a single source. The minimum annual
investment is $240 per investor which may be made in monthly, quarterly,
semiannual or annual payments. The minimum monthly deposit per investor is $20.
Except for trustees or custodian fees for certain retirement plans, at present
there is no separate charge for maintaining group or salary deduction plans;
however, the Trust and its agents reserve the right to establish a maintenance
charge in the future depending on the services required by the investor.
The Trust reserves the right, after notice has been given to the
shareholder, to redeem and close a shareholder's account in the event that the
shareholder ceases participating in the group plan prior to investment of $1,000
per individual or in the event of a redemption which occurs prior to the
accumulation of that amount or which reduces the account value to less than
$1,000 and the account value is not increased to $1,000 within a reasonable time
after notification. An investor in a plan who has not purchased shares for six
months shall be presumed to have stopped making payments under the plan.
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<PAGE>
Automatic Investment Plan
Shareholders may arrange to make periodic investments through automatic
deductions from checking accounts by completing the appropriate form and
providing the necessary documentation to establish this service. The minimum
investment is $50.
The Automatic Investment Plan involves an investment strategy called
dollar cost averaging. Dollar cost averaging is a method of investing whereby a
specific dollar amount is invested at regular intervals. By investing the same
dollar amount each period, when shares are priced low the investor will purchase
more shares than when the share price is higher. Over a period of time this
investment approach may allow the investor to reduce the average price of the
shares purchased. However, this investment approach does not assure a profit or
protect against loss. This type of regular investment program may be suitable
for various investment goals such as, but not limited to, college planning or
saving for a home.
Uniform Transfers/Gifts to Minors Act
Grandparents, parents or other donors may set up custodian accounts for
minors. The minimum initial investment is $1,000 unless the donor agrees to
continue to make regular share purchases for the account through Scudder's
Automatic Investment Plan (AIP). In this case, the minimum initial investment is
$500.
The Trust reserves the right, after notice has been given to the
shareholder and custodian, to redeem and close a shareholder's account in the
event that regular investments to the account cease before the $1,000 minimum is
reached.
DIVIDENDS
The Trust declares dividends on the outstanding shares of the Fund from
the Fund's net investment income at the close of each business day to
shareholders of record at 4:00 p.m. on the day of declaration. Realized capital
gains and losses (other than long-term capital gains) may be taken into account
in determining the daily distribution. Shares purchased will begin earning
dividends on the day the purchase order is executed and shares redeemed will
earn dividends through the previous day. Net investment income for a Saturday,
Sunday or holiday will be declared as a dividend on the previous business day to
shareholders of record 4:00 p.m.
on that day.
Investment income for the Fund includes, among other things, interest
income and accretion of market and original issue discount and amortization of
premium.
Dividends declared in and attributable to the preceding month will be
paid on the first business day of each month. Net realized capital gains, after
utilization of capital loss carryforwards, if any, will be distributed annually,
although an additional distribution may be necessary to prevent the application
of a federal excise tax. Dividends and distributions will be invested in
additional shares of the same class of the Fund at net asset value and credited
to the shareholder's account on the payment date or, at the shareholder's
election, paid in cash. Dividend checks and Statements of Account will be mailed
approximately two business days after the payment date. The Fund forwards to the
Custodian the monies for dividends to be paid in cash on the payment date.
Shareholders who redeem all their shares prior to a dividend payment
will receive, in addition to the redemption proceeds, dividends declared but
unpaid. Shareholders who redeem only a portion of their shares will be entitled
to all dividends declared but unpaid on such shares on the next dividend payment
date.
PERFORMANCE INFORMATION
From time to time, quotations of the Fund's performance may be included
in advertisements, sales literature or reports to shareholders or prospective
investors. Performance information will be calculated separately for each class
of the Fund's shares. Because each class of shares is subject to different
expenses, the net yield of each class of a particular Fund for the same period
may differ. Performance information enumerated below is based on the five month
period ended May 31, 1999for each class of the Fund. These performance figures
may be calculated in the following manner:
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Yield
The Trust makes available various yield quotations with respect to
shares of the Fund. The annualized yield for the Fund for the seven-day period
ended May 31, 1999 for the Institutional Shares and Managed Shares was 4.83% and
4.76%, respectively. The annualized yield for the Premium Shares and Prime
Reserve Shares for the seven-day period ended May 31, 1999 was 4.78% and 4.75%,
respectively.
The Fund's yield may fluctuate daily and does not provide a basis for
determining future yields. The foregoing yields were computed separately for
each class of the Fund by determining the net change in value, exclusive of
capital changes, of a hypothetical account having a balance of one share at the
beginning of the period, dividing the net change in value by the value of the
account at the beginning of the base period to obtain the base period return,
and multiplying the base period return by 365/7, with the resulting yield figure
carried to the nearest hundredth of one percent. The net change in value of an
account consists of the value of additional shares purchased with dividends from
the original share plus dividends declared on both the original share and any
such additional shares (not including realized gains or losses and unrealized
appreciation or depreciation) less applicable expenses, including the management
fee payable to the Adviser.
Current yield for the Fund will fluctuate from time to time, unlike
bank deposits or other investments that pay a fixed yield for a stated period of
time, and do not provide a basis for determining future yields. Yield is a
function of portfolio quality, composition, maturity and market conditions as
well as expenses allocated to the Fund. Yield information may be useful in
reviewing the performance of the Fund and for providing a basis for comparison
with investment alternatives. The yield of the Fund, however, may not be
comparable to investment alternatives because of differences in the foregoing
variables and differences in the methods used to value portfolio securities and
compute expenses.
Effective Yield
The effective yield for the Fund is calculated in a similar fashion to
yield, except that the seven-day period return is compounded by adding 1,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the
result, according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)365/7] - 1
The effective yields (i.e., on a compound basis, assuming the daily
reinvestment of dividends) for the Fund, for the seven-day period ended May 31,
2000 for the Institutional Shares and Managed Shares was % and %, respectively.
The effective yield for the Premium Shares and Prime Reserve Shares of the Cash
Fund for the seven-day period ended May 31, 2000 was % and %, respectively.
Average Annual Total Return
Average annual total return is the average annual compound rate of
return for periods of one year, five years, and ten years and the life of the
Fund, where applicable, all ended on the last day of a recent calendar quarter
and is calculated separately for each class of the Fund. Average annual total
return quotations reflect changes in the price of the Fund's shares, if any, and
assume that all dividends and capital gains distributions during the respective
periods were reinvested in the same class of Fund shares. Average annual total
return is calculated by finding the average annual compound rates of return of a
hypothetical investment over such periods, according to the following formula
(average annual total return is then expressed as a percentage):
T = (ERV/P)^1/n - 1
Where:
T = Average Annual Total Return
P = a hypothetical initial investment of $1,000
N = number of years
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
25
<PAGE>
Average Annual Total Return for periods ended May 31, 2000^(1)
<TABLE>
Since
Inception* One Year Five Years Ten Years
<S> <C> <C> <C> <C>
Institutional Shares N/A N/A
Managed Shares -
Premium Money Market Shares N/A N/A
Prime Reserve Money Market Shares N/A N/A N/A
</TABLE>
* The Institutional shares of Scudder Money Market Series commenced
operations on August 4, 1997.
The Premium shares of Scudder Money Market Series commenced operations on
July 7, 1997.
The Prime Reserve shares of Scudder Money Market Series commenced
operations on October 15, 1998.
[confirm for 2000 (1) The Adviser maintained Fund expenses for the fiscal year
ending May 31, 1999. The Average Annual Total Return for the fiscal year
ended May 31, 1999 would have been lower if the Adviser had not maintained
expenses.]
Cumulative Total Return
Cumulative total return is the cumulative rate of return on a
hypothetical initial investment of $1,000 for a specified period. Cumulative
total return quotations reflect changes in the price of the Fund's shares and
assume that all dividends and capital gains distributions during the period were
reinvested in Fund shares. Cumulative total return is calculated separately for
each class of shares of the Fund by finding the cumulative rates of return of a
hypothetical investment over such periods, according to the following formula
(cumulative total return is then expressed as a percentage):
C = (ERV/P) - 1
Where:
C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.
Cumulative Total Return for periods ended May 31, 2000(1)
<TABLE>
<CAPTION>
Since One Year Five Years Ten Years
Inception*
<S> <C> <C> <C> <C>
Institutional Shares N/A N/A
Managed Shares -
Premium Money Market Shares N/A N/A
Prime Reserve Money Market Shares N/A N/A N/A
</TABLE>
* The Institutional shares of Scudder Money Market Series commenced
operations on August 4, 1997.
The Premium shares of Scudder Money Market Series commenced operations on
July 7, 1997.
The Prime Reserve shares of Scudder Money Market Series commenced
operations on October 15, 1998.
[confirm for 2000 (1) The Adviser maintained Fund expenses
for the fiscal year ending May 31, 1999. The Average
Annual Total Return for the fiscal year ended May 31, 1999
would have been lower if the Adviser had not maintained
expenses. ]
26
<PAGE>
Total Return
Total return is the rate of return on an investment for a specified
period of time calculated in the same manner as cumulative total return.
Comparison of Fund Performance
In connection with communicating its performance to current or
prospective shareholders, the Fund also may compare these figures to the
performance of unmanaged indices which may assume reinvestment of dividends or
interest but generally do not reflect deductions for administrative and
management costs.
From time to time, in advertising and marketing literature, the Fund's
performance may be compared to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations.
From time to time, in marketing and other Fund literature, Trustees and
officers of the Fund, the Fund's portfolio manager, or members of the portfolio
management team may be depicted and quoted to give prospective and current
shareholders a better sense of the outlook and approach of those who manage the
Fund. In addition, the amount of assets that the Adviser has under management in
various geographical areas may be quoted in advertising and marketing materials.
The Fund may be advertised as an investment choice in Scudder's college
planning program.
Marketing and other Fund literature may include a description of the
potential risks and rewards associated with an investment in the Fund. The
description may include a "risk/return spectrum" which compares the Fund to
other Scudder funds or broad categories of funds, such as money market, bond or
equity funds, in terms of potential risks and returns. Money market funds are
designed to maintain a constant $1.00 share price and have a fluctuating yield.
Share price, yield and total return of a bond fund will fluctuate. The share
price and return of an equity fund also will fluctuate. The description may also
compare the Fund to bank products, such as certificates of deposit. Unlike
mutual funds, certificates of deposit are insured up to $100,000 by the U.S.
government and offer a fixed rate of return.
Because bank products guarantee the principal value of an investment
and money market funds seek stability of principal, these investments are
considered to be less risky than investments in either bond or equity funds,
which may involve the loss of principal. However, all long-term investments,
including investments in bank products, may be subject to inflation risk, which
is the risk of erosion of the value of an investment as prices increase over a
long time period. The risks/returns associated with an investment in bond or
equity funds depend upon many factors. For bond funds these factors include, but
are not limited to, a fund's overall investment objective, the average portfolio
maturity, credit quality of the securities held, and interest rate movements.
For equity funds, factors include a fund's overall investment objective, the
types of equity securities held and the financial position of the issuers of the
securities. The risks/returns associated with an investment in international
bond or equity funds also will depend upon currency exchange rate fluctuation.
A risk/return spectrum generally will position the various investment
categories in the following order: bank products, money market funds, bond funds
and equity funds. Shorter-term bond funds generally are considered less risky
and offer the potential for less return than longer-term bond funds. The same is
true of domestic bond funds relative to international bond funds, and bond funds
that purchase higher quality securities relative to bond funds that purchase
lower quality securities. Growth and income equity funds are generally
considered to be less risky and offer the potential for less return than growth
funds. In addition, international equity funds usually are considered more risky
than domestic equity funds but generally offer the potential for greater return.
Evaluation of Fund performance or other relevant statistical
information made by independent sources may also be used in advertisements
concerning the Fund, including reprints of, or selections from, editorials or
articles about the Fund.
THE PROGRAM
Scudder Treasurers Trust(TM) (the "Program") is a corporate and
institutional cash investment program with respect to the Fund. The Program is
designed especially for treasurers and financial officers of small- and
middle-sized
27
<PAGE>
corporations and financial institutions. The Fund reduces substantially the
costs and inconvenience of direct investment in individual securities. They help
reduce risk by diversifying investments across a broad range of securities. They
also provide flexibility since shares can be redeemed from or exchanged between
any of the participating money market funds at no extra cost with the exception
of the Institutional Shares which are not exchangeable.
The Fund seeks to provide busy executives with assistance in the
professional management of their cash reserves. These executives frequently
engage experts (meaning experienced professionals) for services requiring
specialized knowledge and expertise. The investment of liquid assets is one such
service. The Fund has a different objective and offers full-time professional
reserve asset management, which is frequently not available from traditional
cash management providers. The Program can help institutional cash managers take
advantage of today's investment opportunities and techniques to improve the
performance of their liquid assets.
The Fund allows small and middle-sized businesses and other
institutions to take advantage of the investment management services of the
Adviser. The Adviser's investment counsel clients include corporations,
foundations, institutions, insurance companies, endowments, trusts, retirement
plans and individuals.
The Fund also anticipates lower expense ratios than those of money
market mutual funds designed for individual investors because the Fund's average
account balances are normally higher than those of the average money market
fund. The Program also offers special services designed for the convenience of
corporate and institutional treasurers.
The Fund seeks to provide the combination of price stability, liquidity
and current income that treasurers often require for liquid assets such as
operating reserves.
ORGANIZATION OF THE FUND
Scudder Fund, Inc. (the "Corporation") was formed on June 18, 1982
under the laws of the State of Maryland. The Corporation was reorganized as a
Massachusetts business trust (the "Trust") established pursuant to a Declaration
of Trust dated April 17, 2000. The authorized capital stock of the Trust
consists of shares having a par value of $.001 per share. The Trust's
Declaration of Trust authorizes the Board of Trustees to classify or reclassify
any unissued shares ofbeneficial interest. The Board of Trustees has designated
one series, Scudder Money Market Series, (the "Fund"). The Fund has six classes
ofshares, to be referred to for all purposes as "Managed shares," "Institutional
shares"; "Premium Class S shares", "Premium Class AARP", "Prime Reserve Class
AARP" and "Prime Reserve Class S shares."
Each share of each class of the Fund shall be entitled to one vote (or
fraction thereof in respect of a fractional share) on matters that such shares
shall be entitled to vote. Shareholders of the Fund shall vote together on any
matter, except to the extent otherwise required by the 1940 Act, or when the
Board of Trustees of the Trust has determined that the matter affects only the
interest of shareholders of one or more classes of the Fund, in which case only
the shareholders of such class or classes of that Fund shall be entitled to vote
thereon. Any matter shall be deemed to have been effectively acted upon with
respect to the Fund if acted upon as provided in Rule 18f-2 under the 1940 Act,
or any successor rule, and in the Trust's Declaration of Trust. As used in this
Statement of Additional Information, the term "majority," when referring to the
approvals to be obtained from shareholders in connection with general matters
affecting the Fund and all additional portfolios (e.g., election of trustees),
means the vote of the lesser of (i) 67% of the Trust's shares represented at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy, or (ii) more than 50% of the Trust's outstanding shares. The
term "majority," when referring to the approvals to be obtained from
shareholders in connection with matters affecting a single Fund, class or any
other single portfolio (e.g., annual approval of investment management
contracts), means the vote of the lesser of (i) 67% of the shares of the
portfolio represented at a meeting if the holders of more than 50% of the
outstanding shares of the class or portfolio are present in person or by proxy,
or (ii) more than 50% of the outstanding shares of the portfolio. Shareholders
are entitled to one vote for each full share held and fractional votes for
fractional shares held.
Each share of a Fund of the Trust represents an equal proportionate
interest in that Fund with each other share of the same Fund and is entitled to
such dividends and distributions out of the income earned on the assets
belonging to that Fund as are declared in the discretion of the Trust's Board
ofTrustees. In the event of the liquidation or dissolution of theTrust, shares
of the Fund are entitled to receive the assets attributable to that Fund that
are available for distribution, and a proportionate distribution, based upon the
relative net assets of the Funds, of any general assets not attributable to the
Fund that are available for distribution.
28
<PAGE>
Shareholders are not entitled to any preemptive rights. All shares,
when issued, will be fully paid and non-assessable by the Trust.
INVESTMENT ADVISER
Scudder Kemper Investments, Inc. (the "Adviser"), an investment counsel
firm, acts as investment adviser to the Fund. This organization, the predecessor
of which is Scudder, Stevens & Clark, Inc., is one of the most experienced
investment counsel firms in the U. S. It was established as a partnership in
1919 and pioneered the practice of providing investment counsel to individual
clients on a fee basis. In 1928 it introduced the first no-load mutual fund to
the public. In 1953 the Adviser introduced Scudder International Fund, Inc., the
first mutual fund available in the U.S. investing internationally in securities
of issuers in several foreign countries. The predecessor firm reorganized from a
partnership to a corporation on June 28, 1985. On December 31, 1997, Zurich
Insurance Company ("Zurich") acquired a majority interest in the Adviser, and
Zurich Kemper Investments, Inc., a Zurich subsidiary, became part of the
Adviser. The Adviser's name changed to Scudder Kemper Investments, Inc. On
September 7, 1998, the businesses of Zurich (including Zurich's 70% interest in
Scudder Kemper) and the financial services businesses of B.A.T Industries p.l.c.
("B.A.T") were combined to form a new global insurance and financial services
company known as Zurich Financial Services Group. By way of a dual holding
company structure, former Zurich shareholders initially owned approximately 57%
of Zurich Financial Services Group, with the balance initially owned by former
B.A.T shareholders.
Founded in 1872, Zurich is a multinational, public corporation
organized under the laws of Switzerland. Its home office is located at
Mythenquai 2, 8002 Zurich, Switzerland. Historically, Zurich's earnings have
resulted from its operations as an insurer as well as from its ownership of its
subsidiaries and affiliated companies (the "Zurich Insurance Group"). Zurich and
the Zurich Insurance Group provide an extensive range of insurance products and
services and have branch offices and subsidiaries in more than 40 countries
throughout the world.
The principal source of the Adviser's income is professional fees
received from providing continuous investment advice. Today, it provides
investment counsel for many individuals and institutions, including insurance
companies, colleges, industrial corporations, and financial and banking
organizations as well as providing investment advice to over 280 open and
closed-end mutual funds.
The Adviser maintains a large research department, which conducts
continuous studies of the factors that affect the position of various
industries, companies and individual securities. The Adviser receives published
reports and statistical compilations from issuers and other sources, as well as
analyses from brokers and dealers who may execute portfolio transactions for the
Adviser's clients. However, the Adviser regards this information and material as
an adjunct to its own research activities. The Adviser's international
investment management team travels the world, researching hundreds of companies.
In selecting the securities in which the Fund may invest, the conclusions and
investment decisions of the Adviser with respect to the Funds are based
primarily on the analyses of its own research department.
Certain investments may be appropriate for the fund and also for other
clients advised by the Adviser. Investment decisions for a fund and other
clients are made with a view to achieving their respective investment objectives
and after consideration of such factors as their current holdings, availability
of cash for investment and the size of their investments generally. Frequently,
a particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by the Adviser to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by a fund. Purchase and sale orders for a fund may be combined with
those of other clients of the Adviser in the interest of achieving the most
favorable net results to that fund.
In certain cases, the investments for the fund are managed by the same
individuals who manage one or more other mutual funds advised by the Adviser,
that have similar names, objectives and investment styles. You should be aware
that the Fund is likely to differ from these other mutual funds in size, cash
flow pattern and tax matters. Accordingly, the holdings and performance of the
Fund can be expected to vary from those of these other mutual funds.
The present investment management agreement (the "Agreement") was
approved by the Trustees on and became effective. The Agreement will continue
in effect until September 30, 2001 and from year to year thereafter only if its
continuance is approved annually by the vote of a majority of those Trustees who
are not parties to such
29
<PAGE>
Agreement or interested persons of the Adviser or the Trust, cast in person at a
meeting called for the purpose of voting on such approval, and either by a vote
of the Trust's Trustees or of a majority of the outstanding voting securities of
the Fund. The Agreement may be terminated at any time without payment of penalty
by either party on sixty days' written notice and automatically terminate in the
event of its assignment.
Subject to policies established by the Trust's Board of Trustees, which
has overall responsibility for the business and affairs of the Fund, the Adviser
manages the operations of the Fund. In addition to providing advisory services,
the Adviser furnishes office space and certain facilities and personnel required
for conducting the business of the Fund and the Adviser pays the compensation of
the Trust's officers, trustees and employees affiliated with the Adviser or its
affiliates. Although the Adviser currently pays the compensation, as well as
certain expenses, of all officers and employees of the Trust who are affiliated
with the Adviser or its affiliates, the terms of the investment management
agreements state that the Adviser is not obligated to pay the compensation and
expenses of the Trust's clerical employees other than those providing advisory
services. The Adviser, however, has represented to the Trust's Board of Trustees
that its current intention is to continue to pay such compensation and expenses.
Under the Investment Management Agreement between the Fund and the
Adviser (the "Agreement"), the Fund agrees to pay the Adviser a fee equal to a
rate of 1/12 of 0.25% of the Fund's average daily net assets, computed and
accrued daily and payable monthly. As manager of the assets of the Fund, the
Adviser directs the investments of the Fund in accordance with its investment
objectives, policies and restrictions. The Adviser determines the securities,
instruments and other contracts relating to investments to be purchased, sold or
entered into by the Fund. In addition to portfolio management services, the
Adviser provides certain administrative services in accordance with the
Agreement.
Under the Agreement, the Adviser regularly provides investment
management of the assets of the Fund in accordance with the investment
objectives, policies and restrictions set forth, and determines what securities
shall be purchased by the Fund, what securities shall be held or sold by the
Fund, and what portion of the Fund's assets shall be held uninvested, subject
always to the provisions of the Fund's Declaration of Trust and By-Laws, and of
the 1940 Act and to the Fund's investment objectives, policies and restrictions,
and subject further to such policies and instructions as the Trustees of the
Fund may from time to time establish. The Adviser also advises and assists the
officers of the Fund in taking such steps as are necessary or appropriate to
carry out the decisions of its Trustees and the appropriate committees of the
Trustees regarding the conduct of the business of the Fund.
The Adviser furnishes the Trust's Boards of Trustees periodic reports
on the investment performance of the Fund and on the performance of its
obligations regarding this agreement as well as additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
The Adviser furnishes for the use of the Fund office space and
facilities in the United States as the Fund may require for its reasonable
needs, and also renders significant administrative services (not otherwise
provided by third parties) necessary for the Fund's operations as an open-end
investment company including, but not limited to, preparing reports and notices
to the Trustees and shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring various third-party
service providers to the Fund (such as the Fund's Transfer Agent, pricing
agents, custodian, accountants and others); preparing and making filings with
the SEC and other regulatory agencies; assisting in the preparation and filing
of the Fund's federal, state and local tax returns; preparing and filing the
Fund's federal excise tax returns; assisting with investor and public relations
matters; monitoring the valuation of securities and the calculation of net asset
value; monitoring the registration of shares of the Fund under applicable
federal and state securities laws; maintaining or causing to be maintained for
the Fund all books, record and reports to the extent not otherwise maintained by
a third party; assisting in establishing accounting policies of the Fund;
assisting in the resolution of accounting and legal issues; establishing and
monitoring the Fund's operating budget; processing the payment of the Fund's
bills; assisting the Fund in, and otherwise arranging for, the payment of
distributions and dividends, and otherwise assisting the Fund in the conduct of
its business, subject to the direction and control of the Trustees.
The Agreement also provides that the Fund is granted a nonexclusive
right and sublicense to use the "Scudder" name and mark as part of the
Corporation's name, and the Scudder Marks in connection with the Corporation's
investment product and services.
The Adviser pays the compensation and expenses of all affiliated
Trustees and executive employees of the Fund and makes available, without
expense to the Fund, the services of such Trustees, officers and employees as
may duly be elected Trustees, officers or employees of the Fund, subject to
their individual consent to serve and to any limitations
30
<PAGE>
imposed by law, and pays the Fund's office rent and provides investment
advisory, research and statistical facilities and all clerical services relating
to research, statistical and investment work.
For the Fund's fiscal year ended May 31, 2000, the Adviser did not
impose fees of $ , and did impose fees of $ , of which $ remains unpaid.
For the five-month period ended May 31, 1999, the Adviser did not
impose fees of $1,698,744, and did impose fees of $1,334,728, of which $57,892
remains unpaid.
For the Fund's fiscal year ended December 31, 1998, the Adviser did not
impose fees of $1,846,622, and did impose fees of $2,304,035.
For the Fund's fiscal year ended December 31, 1997, the Adviser did not
impose fees of $374,936 and did impose fees of $1,301,440, of which $123,101 was
unpaid December 31, 1997.
The Agreement also provides that the Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which the Agreement relates, provided that nothing in
the agreement shall be deemed to protect or purport to protect against any
liability to the Trust, the Fund or the Fund's shareholders to which it would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the duties, or by reason of reckless disregard
of the obligations and duties hereunder.
Any person, even though also employed by Scudder, who may be or become
an employee of and paid by the Fund shall be deemed, when acting within the
scope of his or her employment by the Fund, to be acting in such employment
solely for the Fund and not as an agent of Scudder.
The Agreement will continue in effect from year to year provided such
continuance is approved annually (i) by the holders of a majority of the
respective Fund's outstanding voting securities or by the Trust's Board of
Trustees and (ii) by a majority of the Trustees of the Trust who are not parties
to the Agreement or "interested persons" (as defined in the 1940 Act) of any
such party. The Agreement may be terminated on 60 days' written notice by either
party and will terminate automatically if assigned.
Administrative Fee
The Fund has entered into administrative services agreements with
Scudder Kemper (the "Administration Agreements"), pursuant to which Scudder
Kemper will provide or pay others to provide substantially all of the
administrative services required by the Fund (other than those provided by
Scudder Kemper under its investment management agreement with the Fund, as
described above) in exchange for the payment by the Fund of an administrative
services fee (the "Administrative Fee") for Prime Reserve and AARP Premium
shares of 0.400% of its average daily net assets, for Scudder Premium Shares of
0.250% of its average daily net assets, for Managed shares of 0.200% of its
average daily net assets, and for Institutional shares of 0.050% of its average
daily net assets. One effect of these arrangements is to make the Fund's future
expense ratio more predictable. The Administrative Fee will become effective on
or about August 11, 2000.
Various third-party service providers (the "Service Providers"), some
of which are affiliated with Scudder Kemper, provide certain services to the
Fund pursuant to separate agreements with the Fund. Scudder Fund Accounting
Corporation, a subsidiary of Scudder Kemper, computes net asset value for the
Fund and maintains its accounting records. Scudder Service Corporation, also a
subsidiary of Scudder Kemper, is the transfer, shareholder servicing and
dividend-paying agent for the shares of the Fund. Scudder Trust Company, an
affiliate of Scudder Kemper, provides subaccounting and recordkeeping services
for shareholders in certain retirement and employee benefit plans. As custodian,
Brown Brothers Harriman holds the portfolio securities of the Fund, pursuant to
a custodian agreement. PricewaterhouseCoopers LLP audits the financial
statements of the Fund and provides other audit, tax, and related services.
Dechert Price & Rhoads acts as general counsel for the Fund. In addition to the
fees it pays under its investment management agreement with Scudder Kemper, the
Fund pays the fees and expenses associated with these service arrangements, as
well as the Fund's insurance, registration, printing, postage and other costs.
31
<PAGE>
Scudder Kemper will pay the Service Providers for the provision of
their services to the Fund and will pay other Fund expenses, including
insurance, registration, printing and postage fees. In return, the Fund will pay
Scudder Kemper an Administrative Fee.
The Administration Agreement has an initial term of three years,
subject to earlier termination by the Fund's Board. The fee payable by the Fund
to Scudder Kemper pursuant to the Administration Agreements is reduced by the
amount of any credit received from the Fund's custodian for cash balances.
Certain expenses of the Fund will not be borne by Scudder Kemper under
the Administration Agreements, such as taxes, brokerage, interest and
extraordinary expenses; and the fees and expenses of the Independent Trustees
(including the fees and expenses of their independent counsel). In addition, the
Fund will continue to pay the fees required by its investment management
agreement with Scudder Kemper.
AMA InvestmentLink(SM) Program
Pursuant to an Agreement between the Adviser and AMA Solutions, Inc., a
subsidiary of the American Medical Association (the "AMA"), dated May 9, 1997,
the Adviser has agreed, subject to applicable state regulations, to pay AMA
Solutions, Inc. royalties in an amount equal to 5% of the management fee
received by the Adviser with respect to assets invested by AMA members in
Scudder funds in connection with the AMA InvestmentLinkSM Program. The Adviser
will also pay AMA Solutions, Inc. a general monthly fee, currently in the amount
of $833. The AMA and AMA Solutions, Inc. are not engaged in the business of
providing investment advice and neither is registered as an investment adviser
or broker/dealer under federal securities laws. Any person who participates in
the AMA InvestmentLinkSM Program will be a customer of the Adviser (or of a
subsidiary thereof) and not the AMA or AMA Solutions, Inc. AMA InvestmentLinkSM
is a service mark of AMA Solutions, Inc.
Code of Ethics
The Fund, the Adviser and principal underwriter have each adopted codes of
ethics under rule 17j-1 of the Investment Company Act. Board members, officers
of the Fund and employees of the Adviser and principal underwriter are permitted
to make personal securities transactions, including transactions in securities
that may be purchased or held by the Fund, subject to requirements and
restrictions set forth in the applicable Code of Ethics. The Adviser's Code of
Ethics contains provisions and requirements designed to identify and address
certain conflicts of interest between personal investment activities and the
interests of the Fund. Among other things, the Adviser's Code of Ethics
prohibits certain types of transactions absent prior approval, imposes time
periods during which personal transactions may not be made in certain
securities, and requires the submission of duplicate broker confirmations and
quarterly reporting of securities transactions. Additional restrictions apply to
portfolio managers, traders, research analysts and others involved in the
investment advisory process. Exceptions to these and other provisions of the
Adviser's Code of Ethics may be granted in particular circumstances after review
by appropriate personnel.
DISTRIBUTOR
Pursuant to a contract with the Trust, Scudder Investor Services, Inc.,
Two International Place, Boston, Massachusetts 02110-4103, a subsidiary of the
Adviser, serves as the Trust's principal underwriter in connection with a
continuous offering of shares of the Trust. The Distributor may enter into
agreements with other broker/dealers for the distribution of Fund shares. The
Distributor receives no remuneration for its services as principal underwriter
and is not obligated to sell any specific amount of Fund shares. As principal
underwriter, it accepts purchase orders for shares of the Fund. In addition, the
Underwriting Agreement obligates the Distributor to pay certain expenses in
connection with the offering of the shares of the Fund. After the Prospectus and
periodic reports have been prepared, set in type and mailed to shareholders, the
Distributor will pay for the printing and distribution of copies thereof used in
connection with the offering to prospective investors. The Distributor will also
pay for supplemental sales literature and advertising costs. The Distributor may
enter into agreements with other broker dealers for the distribution of fund
shares.
The Trust's underwriting agreement dated , will remain in effect until
September 30, 2001, and from year to year thereafter only if its continuance is
approved annually by a majority of the members of the Board of Trustees who are
not parties to such agreement or interested persons of any such party and either
by vote of a majority of the
32
<PAGE>
Board of Trustees or a majority of the outstanding voting securities of
theTrust. The underwriting agreement was last approved by the Trustees on .
Under the principal underwriting agreement, the Trust is responsible for: the
payment of all fees and expenses in connection with the preparation and filing
with the SEC of its registration statement and prospectus and any amendments and
supplements thereto; the registration and qualification of shares for sale in
the various states, including registering the Trust as a broker/dealer in
various states as required; the fees and expenses of preparing, printing and
mailing prospectuses annually to existing shareholders (see below for expenses
relating to prospectuses paid by the Distributor), notices, proxy statements,
reports or other communications to shareholders of the Fund; the cost of
printing and mailing confirmations of purchases of shares and the prospectuses
accompanying such confirmations; any issuance taxes and/or any initial transfer
taxes; a portion of shareholder toll-free telephone charges and expenses of
shareholder service representatives; the cost of wiring funds for share
purchases and redemptions (unless paid by the shareholder who initiates the
transaction); the cost of printing and postage of business reply envelopes; and
a portion of the cost of computer terminals used by both the Trust and the
Distributor.
The Distributor pays for printing and distributing prospectuses or
reports prepared for its use in connection with the offering of the Fund's
shares to the public and preparing, printing and mailing any other literature or
advertising in connection with the offering of shares of the Fund to the public.
The Distributor pays all fees and expenses in connection with its qualification
and registration as a broker/dealer under federal and state laws, a portion of
the cost of toll-free telephone service and expenses of shareholder service
representatives, a portion of the cost of computer terminals, and expenses of
any activity which is primarily intended to result in the sale of shares issued
by the Fund, unless a Rule 12b-1 plan is in effect which provides that the Fund
shall bear some or all of such expenses.
Note: Although the Trust does not currently have a 12b-1 Plan and
the Trustees have no current intention of adopting one, the
Trust will also pay those fees and expenses permitted to be
paid or assumed by the Trust pursuant to a 12b-1 Plan, if any,
were adopted by the Trust, notwithstanding any other provision
to the contrary in the underwriting agreement.
As agent the Distributor currently offers shares of the Fund on a
continuous basis to investors in all states in which shares of the Fund may from
time to time be registered or where permitted by applicable law. The
underwriting agreement provides that the Distributor accepts orders for shares
at net asset value as no sales commission or load is charged to the investor.
The Distributor has made no firm commitment to acquire shares of the Fund.
TRUSTEES AND OFFICERS [to be updated]
The principal occupations of the Trustees and executive officers of the
Trust for the past five years are listed below.
<TABLE>
<CAPTION>
Position with
Underwriter,
Position with Scudder Investor
Name, Age and Address Trust Principal Occupation* Services, Inc.
--------------------- ----- --------------------- --------------
33
<PAGE>
Position with
Underwriter,
Position with Scudder Investor
Name, Age and Address Trust Principal Occupation* Services, Inc.
--------------------- ----- --------------------- --------------
<S> <C> <C> <C>
John Millette (37)** Vice President and Vice President of Scudder --
Secretary Kemper Investments, Inc.
Caroline Pearson (38)** Assistant Secretary Senior Vice President of Clerk
Scudder Kemper Investments,
Inc.; Associate, Dechert
Price & Rhoads (law firm)
1989 to 1997
</TABLE>
* All of the Trustees and Officers have been associated with their
respective companies for more than five years, but not necessarily in
the same capacity.
# Messrs. Freeman and Fiedler are members of the Executive Committee.
** Address: Two International Place, Boston, Massachusetts
## Address: 345 Park Avenue, New York, New York
*** Address: 222 South Riverside Plaza, Chicago, Illinois
Trustees of the Trust not affiliated with the Adviser receive from the
Trust an annual fee and a fee for each Board of Trustees and Board
Committee meeting attended and are reimbursed for all out-of-pocket
expenses relating to attendance at such meetings. Trustees who are
affiliated with the Adviser do not receive compensation from the Trust,
but the Trust may reimburse such Trustees for all out-of-pocket
expenses relating to attendance at meetings.
The Trustees and officers of the Trust also serve in similar capacities
with respect to other Scudder Funds.
[shareholdings to be updated]
[shareholdings to be updated]
As of, the following shareholders held of record more than five percent
of the Fund:
Managed shares
--------------
Institutional shares
--------------------
Prime Reserve Class S shares
Prime Reserve Class AARP shares
Premium Class S shares
Premium Class AARP shares
As of July , 2000, no other persons, to the knowledge of management,
owned of record or beneficially more than 5% of the outstanding shares of the
Fund. To the extent that any of the above institutions is the beneficial owner
of more than 25% of the outstanding Shares of the Trust or the Fund, it may be
deemed to be a "control" person of the Corporation or the Fund for purposes of
the 1940 Act.
REMUNERATION
Responsibilities of the Board -- Board and Committee Meetings
The Board of Trustees is responsible for the general oversight of the
Fund's business. A majority of the Board's members are not affiliated with
Scudder Kemper Investments, Inc. These "Independent Trustees" have primary
responsibility for assuring that the Fund is managed in the best interests of
its shareholders.
34
<PAGE>
The Board of Trustees meets at least quarterly to review the investment
performance of the Fund and other operational matters, including policies and
procedures designed to ensure compliance with various regulatory requirements.
At least annually, the Independent Trustees review the fees paid to the Adviser
and its affiliates for investment advisory services and other administrative and
shareholder services. In this regard, they evaluate, among other things, the
Fund's investment performance, the quality and efficiency of the various other
services provided, costs incurred by the Adviser and its affiliates and
comparative information regarding fees and expenses of competitive funds. They
are assisted in this process by the Fund's independent public accountants and by
independent legal counsel selected by the Independent Trustees.
All the Independent Trustees serve on the Committee on Independent
Trustees, which nominates Independent Trustees and considers other related
matters, and the Audit Committee, which selects the Fund's independent public
accountants and reviews accounting policies and controls. In addition,
Independent Trustees from time to time have established and served on task
forces and subcommittees focusing on particular matters such as investment,
accounting and shareholder service issues.
Compensation of Officers and Trustees
The Independent Trustees receive the following compensation from the
Fund of Scudder Money Market Trust: an annual Trustee's fee of $1,500; a fee of
$150 for attendance at each Board Meeting, Audit Committee Meeting or other
meeting held for the purposes of considering arrangements between the
Corporation on behalf of the Fund and the Adviser or any affiliate of the
Adviser; $150 for all other committee meetings; and reimbursement of expenses
incurred for travel to and from Board Meetings. No additional compensation is
paid to any Independent Trustee for travel time to meetings, attendance at
trustee's educational seminars or conferences, service on industry or
association committees, participation as speakers at trustees' conferences or
service on special trustee task forces or subcommittees. Independent Trustees do
not receive any employee benefits such as pension or retirement benefits or
health insurance. Notwithstanding the schedule of fees, the Independent Trustees
have in the past and may in the future waive a portion of their compensation.
The Independent Trustees also serve in the same capacity for other
funds managed by the Adviser. These funds differ broadly in type and complexity
and in some cases have substantially different Trustee fee schedules. The
following table shows the aggregate compensation received by each Independent
Trustee during 1999 from the Trust and from all of the Scudder funds as a group.
In 1999, the Trustees of the Fund met times.
Name Scudder Money Market Trust* All Scudder Funds
---- --------------------------- -----------------
* Scudder Money Market Trust consists of Scudder Money
Market Series, Scudder Tax Free Money Market Series and
Scudder Government Money Market Series.
** Mr. Fiedler received $19,335 through a deferred compensation program. As of
December 31, 1998, Mr. Fiedler had a total of $243,692 accrued in a
deferred compensation program for serving on the Board of Trustees of the
Corporation.
Members of the Board of Trustees who are employees of the Adviser or
its affiliates receive no direct compensation from the Trust, although they are
compensated as employees of the Adviser, or its affiliates, as a result of which
they may be deemed to participate in fees paid by the Fund.
35
<PAGE>
TAXES
The Prospectus for each class of shares of the Fund describes generally
the tax treatment of distributions by the Trust. This section of the Statement
includes additional information concerning federal taxes.
Qualification by the Fund as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
requires, among other things, that (a) at least 90% of the Fund's annual gross
income, without offset for losses from the sale or other disposition of
securities, be derived from interest, payments with respect to securities loans,
dividends and gains from the sale or other disposition of securities or options
thereon; or other income derived with respect to its business of investing in
stock securities or currencies (b) the Fund diversify its holdings so that, at
the end of each quarter of the taxable year, (i) at least 50% of the market
value of the Fund's assets is represented by cash and cash items (including
receivables), Government securities, securities of other regulated investment
companies and other securities limited in respect of any one issuer to an amount
not greater than 5% of the Fund's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of the Fund's
assets is invested in the securities of any one issuer (other than U.S.
government securities or securities of other regulated investment companies), or
of two or more issuers which the taxpayer controls and which are determined to
be engaged in the same or similar trade or business. As a regulated investment
company, the Fund generally will not be subject to federal income tax on its net
investment income and net capital gains distributed to its shareholders,
provided that it distributes to its stockholders at least 90% of its investment
company taxable income (including net short-term capital gain) and at least 90%
of the excess of its tax exempt interest income over attributable expenses
earned in each year.
If for any taxable year the Fund does not qualify for the special
federal income tax treatment afforded regulated investment companies, all of its
taxable income will be subject to federal income tax at regular corporate rates
(without any deduction for distributions to its shareholders).
A 4% nondeductible excise tax will be imposed on the Fund to the extent
it does not meet certain minimum distribution requirements by the end of each
calendar year. For this purpose, any income or gain retained by the Fund that is
subject to income tax will be considered to have been distributed by year-end.
In addition, dividends declared in October, November or December payable to
shareholders of record on a specified date in such a month and paid in the
following January will be treated as having been paid by the Fund and received
by shareholders on December 31 of the calendar year in which the dividend was
declared. The Fund intends that it will timely distribute substantially all of
its net investment income and net capital gains and, thus, expects not to be
subject to the excise tax.
Any gain or loss realized upon a sale or redemption of shares of the
Fund by an individual shareholder who is not a dealer in securities generally
will be long- or short-term capital gain or loss, depending on the shareholder's
holding period for the shares. However, any loss realized by a shareholder upon
the sale or redemption of shares of the Fund held for six months or less is
treated as long-term capital loss to the extent of any long-term capital gain
distribution received by the shareholder on such shares. Any loss realized on a
sale or exchange of shares of the Fund will be disallowed to the extent shares
of such Fund are re-acquired within the 61-day period beginning 30 days before
and ending 30 days after the shares are disposed of.
Dividends paid out of the Fund's investment company taxable income
(which includes, among other items, dividends, interest and net short-term
capital gain in excess of net long-term capital losses) will be taxable to a
shareholder as ordinary income. Because no portion of the Fund's income is
expected to consist of dividends paid by U.S. corporations, no portion of the
dividends paid by the Fund is expected to be eligible for the corporate
dividends-received deduction. Properly designated distributions of net capital
gains (the excess of net long-term capital gains over net short-term capital
losses), if any, are taxable to shareholders as long-term capital gains,
regardless of how long the shareholder has held the Fund's shares, and are not
eligible for the dividends-received deduction. Shareholders receiving
distributions in the form of additional shares, rather than cash, generally will
have a cost basis in each such share equal to the net asset value of a share of
the Fund on the reinvestment date. Shareholders will be notified annually as to
the U.S. federal tax status of distributions, and shareholders receiving
distributions in the form of additional shares will receive a report as to the
net asset value of (both paid or reinvested) those shares.
Investments by the Fund in zero coupon or other original issue discount
securities (other than tax-exempt securities) will result in income to the Fund
equal to a portion of the excess of the face value of the securities over their
issue price (the "original issue discount") each year that the securities are
held, even though the Fund receives no cash interest payments. This income is
included in determining the amount of income which the Fund must distribute to
36
<PAGE>
maintain its status as a regulated investment company and to avoid the payment
of federal income tax and the 4% excise tax.
Gain derived by the Fund from the disposition of any market discount
bonds (i.e., bonds purchased other than at original issue, where the face value
of the bonds exceeds their purchase price), held by the Fund will be taxed as
ordinary income to the extent of the accrued market discount up to the amount of
realized capital gain on the bonds, unless the Fund elects to include the market
discount in income as it accrues which will be taxed as ordinary income as
accrued.
The Fund may be required to withhold U.S. federal income tax at the
rate of 31% of all taxable distributions (other than redemption proceeds,
provided the Fund maintains a constant net asset value per share) payable to
shareholders who fail to provide the Fund with their correct taxpayer
identification number or to make required certifications, or if the Fund has
been notified by the Internal Revenue Service that they are subject to backup
withholding. Corporate shareholders and certain other shareholders specified in
the Code generally are exempt from such backup withholding. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability.
The tax consequences to a foreign shareholder of an investment in the
Fund may be different from those described herein. Foreign shareholders are
advised to consult their own tax advisers with respect to the particular tax
consequences to them of an investment in the Fund.
Fund shareholders may be subject to state and local taxes on their Fund
distributions. In many states, Fund distributions which are derived from
interest on certain U.S. Government obligations are exempt from taxation.
Shareholders are advised to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in the Fund.
PORTFOLIO TRANSACTIONS
Brokerage Commissions
Allocation of brokerage is supervised by the Adviser.
The primary objective of the Adviser in placing orders for the purchase
and sale of securities for the Fund is to obtain the most favorable net results,
taking into account such factors as price, commission where applicable, size of
order, difficulty of execution and skill required of the executing
broker/dealer. The Adviser seeks to evaluate the overall reasonableness of
brokerage commissions paid (to the extent applicable) through the familiarity of
the Distributor with commissions charged on comparable transactions, as well as
by comparing commissions paid by the Fund to reported commissions paid by
others. The Adviser routinely reviews commission rates, execution and settlement
services performed and makes internal and external comparisons.
The Fund's purchases and sales of fixed-income securities are generally
placed by the Adviser with primary market makers for these securities on a net
basis, without any brokerage commission being paid by the Fund. Trading does,
however, involve transaction costs. Transactions with dealers serving as primary
market makers reflect the spread between the bid and asked prices. Purchases of
underwritten issues may be made, which will include an underwriting fee paid to
the underwriter.
When it can be done consistently with the policy of obtaining the most
favorable net results, it is the Adviser's practice to place such orders with
broker/dealers who supply brokerage and research services to the Adviser or the
Fund. The term "research services" includes advice as to the value of
securities; the advisability of investing in, purchasing or selling securities;
the availability of securities or purchasers or sellers of securities; and
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts. The
Adviser is authorized when placing portfolio transactions, if applicable, for
the Fund to pay a brokerage commission in excess of that which another broker
might charge for executing the same transaction on account of execution services
and the receipt of research services. The Adviser has negotiated arrangements,
which are not applicable to most fixed-income transactions, with certain
broker/dealers pursuant to which a broker/dealer will provide research services,
to the Adviser or the Fund in exchange for the direction by the Adviser of
brokerage transactions to the broker/dealer. These arrangements regarding
receipt of research services generally apply to equity security transactions.
The Adviser will not place orders with a broker/dealer on the basis that the
broker/dealer has or has not sold shares of the Fund. In effecting
37
<PAGE>
transactions in over-the-counter securities, orders are placed with the
principal market makers for the security being traded unless, after exercising
care, it appears that more favorable results are available elsewhere.
To the maximum extent feasible, it is expected that the Adviser will
place orders for portfolio transactions through the Distributor, which is a
corporation registered as a broker/dealer and a subsidiary of the Adviser; the
Distributor will place orders on behalf of the Fund with issuers, underwriters
or other brokers and dealers. The Distributor will not receive any commission,
fee or other remuneration from the Fund for this service.
Although certain research services from broker/dealers may be useful to
the Fund and to the Adviser, it is the opinion of the Adviser that such
information only supplements the Adviser's own research effort since the
information must still be analyzed, weighed, and reviewed by the Adviser's
staff. Such information may be useful to the Adviser in providing services to
clients other than the Fund, and not all such information is used by the Adviser
in connection with the Fund. Conversely, such information provided to the
Adviser by broker/dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to
the Fund.
The Trustees review, from time to time, whether the recapture for the
benefit of the Fund of some portion of the brokerage commissions or similar fees
paid by the Fund on portfolio transactions is legally permissible and advisable.
Money market instruments are normally purchased in principal
transactions directly from the issuer or from an underwriter or market maker.
There usually are no brokerage commissions paid by a Fund for such purchases.
During the last three fiscal years each Fund paid no portfolio brokerage
commissions. Purchases from underwriters will include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers will include the spread between the bid and asked prices.
NET ASSET VALUE
Net asset value per share for each class of the Fund is determined by
Scudder Fund Accounting Corporation, a subsidiary of the Adviser, on each day
the Exchange is open for trading. The net asset value per share of the Fund is
determined at 4:00 p.m. The Exchange normally is closed on the following
national holidays: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas, and on the preceding Friday or subsequent Monday when one of these
holidays falls on a Saturday or Sunday, respectively. The net asset value per
share of each class is computed by dividing the value of the total assets
attributable to a specific class, less all liabilities attributable to that
class, by the total number of outstanding shares of that class. The valuation of
the Fund's portfolio securities is based upon their amortized cost which does
not take into account unrealized securities gains or losses. This method
involves initially valuing an instrument at its cost and thereafter amortizing
to maturity any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument. During periods of declining interest rates,
the quoted yield on shares of the Fund may tend to be higher than a like
computation made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
portfolio instruments. Thus, if the use of amortized cost by the Fund resulted
in a lower aggregate portfolio value on a particular day, a prospective investor
in the Fund would be able to obtain a somewhat higher yield if he purchased
shares of the Fund on that day than would result from investment in a fund
utilizing solely market values, and existing investors in the Fund would receive
less investment income. The converse would apply in a period of rising interest
rates. Other securities and assets for which market quotations are not readily
available are valued in good faith at fair value using methods determined by the
Trustees and applied on a consistent basis. For example, securities with
remaining maturities of more than 60 days for which market quotations are not
readily available are valued on the basis of market quotations for securities of
comparable maturity, quality and type. The Trustees review the valuation of the
Fund's securities through receipt of regular reports from the Adviser at each
regular Trustees' meeting. Determinations of net asset value made other than as
of the close of the Exchange may employ adjustments for changes in interest
rates and other market factors.
38
<PAGE>
ADDITIONAL INFORMATION
Experts
The financial highlights of the Fund included in the Institutional
Shares, the Premium Shares, and the Managed Shares prospectus and the Financial
Statements incorporated by reference in this Statement of Additional Information
have been so included or incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, One International Place, Boston, MA 02110,
independent accountants, and given on the authority of that firm as experts in
accounting and auditing. PricewaterhouseCoopers LLP is responsible for
performing annual audits of the financial statements and financial highlights of
the Fund in accordance with generally accepted auditing standards and the
preparation of federal tax returns.
Other Information
The CUSIP number of the Scudder Premium Class S shares is 811149871
The CUSIP number of the Premium Class AARP shares is
The CUSIP number of the Scudder Institutional Money Market shares is
811149863
The CUSIP number of the Scudder Managed Money Market shares is
811149202
The CUSIP number of the Scudder Prime Reserve Class S shares is
811149830
The CUSIP number of the Prime Reserve Class AARP shares isThe Fund has
a fiscal year end of May 31.
Portfolio securities of the Fund are held separately, pursuant to a
custodian agreement, by State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts
02101 as custodian.
Information enumerated below is provided at the Fund level.
Scudder Fund Accounting Corporation ("SFAC"), Two International Place,
Boston, Massachusetts 02110-4103, a subsidiary of the Adviser, computes net
asset value for the Funds. The Fund pays SFAC an annual fee equal to 0.0200% of
the first $150 million of average daily net assets, 0.0060% of such assets in
excess of $150 million and 0.0035% of such assets in excess of $1 billion, plus
holding and transaction charges for this service. For the fiscal year ended May
31, 2000, Scudder Fund Accounting Corporation's fee amounted to $ , of which $
was unpaid at May 31, 2000. For the Scudder Money Market Series, for the
five-month period ended May 31, 1999, Scudder Fund Accounting Corporation's fee
amounted to $129,426, of which $51,932 was unpaid at May 31, 1999. For the
fiscal years ended December 31, 1999, 1998, and 1997, Scudder Fund Accounting
Corporation's fee amounted to $ ,$189,715,and $56,782, respectively, of which
$was unpaid at.
Scudder Service Corporation (the "Service Corporation"), P.O. Box 2291,
Boston, Massachusetts 02107-2291, a subsidiary of the Adviser, is the transfer,
dividend-paying and shareholder service agent for the Trust and as such performs
the customary services of a Transfer Agent and dividend disbursing agent. These
services include, but are not limited to: (i) receiving for acceptance in proper
form orders for the purchase or redemption of Fund shares and promptly effecting
such orders; (ii) recording purchases of Fund shares and, if requested, issuing
stock certificates; (iii) reinvesting dividends and distributions in additional
shares or transmitting payments therefor; (iv) receiving for acceptance in
proper form transfer requests and effecting such transfers; (v) responding to
shareholder inquiries and correspondence regarding shareholder account status;
(vi) reporting abandoned property to the various states; and (vii) recording and
monitoring daily the issuance in each state of shares of the Fund of the Trust.
Effective October 1, 1995, the Service Corporation applies an aggregate minimum
annual fee of $220,000 for servicing shareholder accounts. The minimum monthly
charge to the Fund shall be the pro rata portion of the aggregate annual fee,
determined by dividing such aggregate annual fee by the number of Funds of the
Corporation. An account activity fee of $16.00 per year shall be charged for any
account which at any time during any month had a share balance in any Fund of
the Corporation. When the Fund's monthly activity charges do not equal or exceed
the minimum monthly charge, the minimum will be charged.
39
<PAGE>
The Fund, on behalf of its Managed Shares, may enter into arrangements
with banks and other institutions which are omnibus account holders of shares of
the Managed Shares class providing for the payment of fees to the institution
for servicing and maintaining accounts of beneficial owners of the omnibus
account. Such payments are expenses of the Managed Shares class only. For the
fiscal year ended May 31, 2000, the amount paid to certain banks and
institutions aggregated $ . For the five months ended May 31, 1999, the amount
paid to certain banks and institutions aggregated $90,000. For the fiscal year
ended December 31, 1998, the amount paid to certain banks and institutions
aggregated $234,051. For the period from July 7, 1997 to December 31, 1997, the
amount paid to certain banks and institutions aggregated $84,364.
The Fund's Prospectus and this Statement of Additional Information omit
certain information contained in the Registration Statement and its amendments
which the Trust has filed with the SEC under the Securities Act of 1933 and
reference is hereby made to the Registration Statement for further information
with respect to the Trust and the securities offered hereby. The Registration
Statement and its amendments are available for inspection by the public at the
SEC in Washington, D.C.
FINANCIAL STATEMENTS
The financial statements, including the investment portfolios of the
Fund, together with the Report of Independent Accountants, Financial Highlights,
notes to financial statements in the Annual Report to the Shareholders of the
Fund dated May 31, 2000, and the unaudited semiannual report are incorporated
herein by reference and are hereby deemed to be a part of this Statement of
Additional Information.
On November 13, 1998, the Trust's Board of Trustees approved a change
in the Fund's fiscal year end from December 31 to May 31, effective May 31,
1999.
40
<PAGE>
APPENDIX
The following is a description of the ratings given by Moody's, S&P and
Fitch to corporate and municipal bonds, corporate and municipal commercial paper
and municipal notes.
Corporate and Municipal Bonds
Moody's: The four highest ratings for corporate and municipal bonds are
"Aaa," "Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of the "best
quality" and carry the smallest degree of investment risk. Bonds rated "Aa" are
of "high quality by all standards," but margins of protection or other elements
make long-term risks appear somewhat greater than "Aaa" rated bonds. Bonds rated
"A" possess many favorable investment attributes and are considered to be upper
medium grade obligations. Bonds rated "Baa" are considered to be medium grade
obligations, neither highly protected nor poorly secured. Moody's applies
numerical modifiers 1, 2 and 3 in each rating category from "Aa" through "Baa"
in its rating system. The modifier 1 indicates that the security ranks in the
higher end of the category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end.
S&P: The four highest ratings for corporate and municipal bonds are
"AAA," "AA," "A" and "BBB." Bonds rated "AAA" have the highest ratings assigned
by S&P and have an extremely strong capacity to pay interest and repay
principal. Bonds rated "AA" have a "very strong capacity to pay interest and
repay principal" and differ "from the higher rated issues only in small degree."
Bonds rated "A" have a "strong capacity" to pay interest and repay principal,
but are "somewhat more susceptible to" adverse effects of changes in economic
conditions or other circumstances than bonds in higher rated categories. Bonds
rated "BBB" are regarded as having an "adequate capacity" to pay interest and
repay principal, but changes in economic conditions or other circumstances are
more likely to lead a "weakened capacity" to make such payments. The ratings
from "AA" to "BBB" may be modified by the addition of a plus or minus sign to
show relative standing within the category.
Fitch: The four highest ratings of Fitch for corporate and municipal
bonds are "AAA," "AA," "A" and "BBB." Bonds rated "AAA" are considered to be
investment-grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events. Bonds rated "AA" are
considered to be investment grade and of very high credit quality. The obligor's
ability to pay interest and repay principal is very strong, although not quite
as strong as bonds rated "AAA." Because bonds rated in the "AAA" and "AA"
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated "F1+." Bonds rated "A" are
considered to be investment grade and of high credit quality. The obligor's
ability to pay interest and repay principal is considered to be strong, but may
be more vulnerable to adverse changes in economic conditions and circumstances
than bonds with higher rates. Bonds rated "BBB" are considered to be investment
grade and of satisfactory credit quality. The obligor's ability to pay interest
and repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have adverse effects
on these bonds, and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than for bonds
with greater ratings.
Corporate and Municipal Commercial Paper
Moody's: The highest rating for corporate and municipal commercial
paper is "P-1" (Prime-1). Issuers rated "P-1" have a "superior ability for
repayment of senior short-term obligations."
S&P: The "A-1" rating for corporate and municipal commercial paper
indicates that the "degree of safety regarding timely payment is strong."
Commercial paper with "overwhelming safety characteristics" will be rated
"A-1+."
Fitch: The rating "F-1" is the highest rating assigned by Fitch. Among
the factors considered by Fitch in assigning this rating are: (1) the issuer's
liquidity; (2) its standing in the industry; (3) the size of its debt; (4) its
ability to service its debt; (5) its profitability; (6) its return on equity;
(7) its alternative sources of financing; and (8) its ability to access the
capital markets. Analysis of the relative strength or weakness of these factors
and others determines whether an issuer's commercial paper is rated "F-1."
<PAGE>
Municipal Notes
Moody's: The highest ratings for state and municipal short-term
obligations are "MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG
3" in the case of an issue having a variable rate demand feature). Notes rated
"MIG 1" or "VMIG 1" are judged to be of the "best quality." Notes rated "MIG 2"
or "VMIG 2" are of "high quality," with margins or protection "ample although
not as large as in the preceding group." Notes rated "MIG 3" or "VMIG 3" are of
"favorable quality," with all security elements accounted for but lacking the
strength of the preceding grades.
S&P: The "SP-1" rating reflects a "very strong or strong capacity to
pay principal and interest." Notes issued with "overwhelming safety
characteristics" will be rated "SP-1+." The "SP-2" rating reflects a
"satisfactory capacity" to pay principal and interest.
Fitch: The highest ratings for state and municipal
short-term obligations are "F-1+," "F-1," and "F-2."
<PAGE>
SCUDDER MONEY MARKET TRUST
PART C. - OTHER INFORMATION
---------------------------
<TABLE>
<CAPTION>
Item 23. Exhibits
--------
<S> <C> <C> <C>
(a) (1) Articles of Incorporation dated June 16, 1982.(Incorporated by reference to
Post-Effective Amendment No. 21 to the Registrant's Registration Statement.)
(2) Articles Supplementary dated April 28, 1987.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(3) Articles of Merger dated April 28, 1987.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(4) Articles Supplementary dated February 20, 1991.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(5) Articles of Transfer dated December 27, 1991.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(6) Articles Supplementary dated February 7, 1992.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(7) Articles of Amendment dated October 14, 1992.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(8) Articles Supplementary for Managed Intermediate Government Fund, dated January
18, 1993.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(9) Articles Supplementary dated April 24, 1995.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(10) Articles Supplementary dated January 25, 1996.
(Incorporated by reference to Exhibit 1(h) to Post-Effective Amendment No. 21 to
the Registrant's Registration Statement.)
(11) Articles of Amendment dated June 12, 1997.
(Incorporated by reference to Exhibit 1(i) to Post-Effective Amendment No. 24 to
the Registrant's Registration Statement.)
1
<PAGE>
(12) Articles Supplementary dated June 12, 1997.
(Incorporated by reference to Exhibit 1(j) to Post-Effective Amendment No. 24 to
the Registrant's Registration Statement.)
(13) Articles Supplementary dated August 11, 1998.
(Incorporated by reference to Post-Effective Amendment No. 28 to the
Registrant's Registration Statement.)
(14) Articles Supplementary dated February 12, 1999.
(Incorporated by reference to Post-Effective Amendment No. 30 to the
Registrant's Registration Statement.)
(15) Articles Supplementary dated September 29, 1999.
(Incorporated by reference to Post-Effective Amendment No. 33 to the
Registrant's Registration Statement.)
(16) Articles Supplementary dated November 10, 1999 is filed herein.
(17) Declaration of Trust dated April 17, 2000 is filed herein.
(18) Establishment and Designation of Series, dated April 18, 2000 with respect to
Scudder Money Market Trust, is filed herein.
(19) Establishment and Designation of Series of Shares of Beneficial Interest, $0.01
par value, Prime Reserve Class S, Prime Reserve Class AARP, Premium Class S and
Premium Class AARP, with respect to Scudder Money Market Trust, to be filed by
amendment.
(b) (1) By-laws as amended through October 24, 1996.
(Incorporated by reference to Post-Effective Amendment No. 22 to the
Registrant's Registration Statement.)
(2) By laws as amended, to be filed by amendment.
(c) Not Applicable.
(d) (1) Investment Management Agreement between the Registrant, on behalf of Scudder
Money Market Series (formerly known as Managed Cash Fund),
and Scudder Kemper Investments, Inc., dated September 7, 1998.
(Incorporated by reference to Post-Effective Amendment No. 30 to the
Registrant's Registration Statement.)
(2) Investment Management Agreement between the Registrant, on behalf of Scudder Tax
Free Money Market Series, and Scudder Kemper Investments, Inc., dated September
7, 1998.
(Incorporated by reference to Post-Effective Amendment No. 30 to the
Registrant's Registration Statement.)
(3) Investment Management Agreement between the Registrant, on behalf of Scudder
Government Money Market Series, and Scudder Kemper Investments, Inc., dated
September 7, 1998.
(Incorporated by reference to Post-Effective Amendment No. 30 to the
Registrant's Registration Statement.)
2
<PAGE>
(4) Investment Management Agreement between the Registrant, on behalf of Scudder
Money Market Series, and Scudder Kemper Investments, Inc., dated [ ,
2000], to be filed by amendment.
(e) (1) Underwriting Agreement datedSeptember 7, 1998, between the Registrant and
Scudder Investor Services.
(Incorporated by reference to Post-Effective Amendment No. 30 to the
Registrant's Registration Statement.)
(2) Underwriting Agreement dated [ , 2000], between the Registrant and
Scudder Investor Services, to be filed by amendment
(f) Not Applicable.
(g) (1) Custodian Agreement with State Street London Limited, dated November 13, 1985.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(2) Fee Schedule for Exhibit (g)(1).
(Incorporated by reference to Exhibit 8(c)(v) to Post-Effective Amendment No.
20, filed on April 28, 1995.)
(3) Sub-Custodian Agreement with Bankers Trust Company (August 15, 1989).
Incorporated by reference to Post-Effective Amendment No. 25 to the Registrant's
Registration Statement.)
(4) Sub-Custodian Agreement with Irving Trust Company, as amended February 6, 1990.
Incorporated by reference to Post-Effective Amendment No. 25 to the Registrant's
Registration Statement.)
(5) Custodian Agreement, dated [ , 2000], to be filed by amendment.
(6) Fee schedule for Exhibit (g)(3) to be filed by amendment.
(h) (1) Transfer Agency Agreement datedJanuary 1, 1990.
(Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement.)
(2) Fee schedule for Exhibit 8(b).
(Incorporated by reference to Post-Effective Amendment No. 21 to the
Registrant's Registration Statement.)
(3) Scudder Service Corporation Fee Information for Services Provided under Transfer
Agency and Service Agreement, dated July 7, 1997.
(Incorporated by reference to Post-Effective Amendment No. 24 to the
Registrant's Registration Statement.)
(4) Fund Accounting Fee Schedule between the Registrant and Scudder Fund Accounting
Corp., dated July 7, 1997.
(Incorporated by reference to Post-Effective Amendment No. 24 to the
Registrant's Registration Statement).
(5) Transfer Agency Agreement dated [ , 2000] to be filed by amendment
3
<PAGE>
(6) Fee schedule for Exhibit (h)(5) to be filed by amendment.
(7) Fund Accounting Agreement, dated [ ], to be filed by amendment.
(8) Fund Accounting Fee Schedule, dated [ , 2000], to be filed by amendment
(9) Administrative Services Agreement between the Registrant on behalf of Scudder
Money Market Trust and Scudder Kemper Investments, Inc. dated [ ,
2000] to be filed by amendment.
(i) Opinion and Consent of Counsel to be filed by amendment.
(j) Consent of Independent Accountants to be filed by amendment.
(k) Not Applicable.
(l) Not Applicable.
(m) Not Applicable.
(n) (1) Multi-Distribution Plan pursuant to Rule 18f-3.
(Incorporated by reference to Post-Effective Amendment No. 25 Exhibit (o) to the
Registrant's Registration Statement.)
(2) Multi-Distribution Plan pursuant to Rule 18f-3, to be filed by amendment
(p) (1) Code of Ethics of Scudder Kemper Investments, Inc. to be filed by amendment.
(2) Code of Ethics of Scudder Money Market Trust to be filed by amendment.
</TABLE>
Item 24. Persons Controlled by or under Common Control with Registrant.
-------- --------------------------------------------------------------
None
Item 25. Indemnification.
-------- ----------------
As permitted by Sections 17(h) and 17(i) of the Investment
Company Act of 1940, as amended (the "1940 Act"), pursuant to
Article IV of the Registrant's By-Laws (filed as Exhibit No. 2
to the Registration Statement), officers, directors, employees
and representatives of the Funds may be indemnified against
certain liabilities in connection with the Funds, and pursuant
to Section 12 of the Underwriting Agreement dated May 6, 1998
(filed as Exhibit No. 6(c) to the Registration Statement),
Scudder Investor Services, Inc. (formerly "Scudder Fund
Distributors, Inc."), as principal underwriter of the
Registrant, may be indemnified against certain liabilities
that it may incur. Said Article IV of the By-Laws and Section
12 of the Underwriting Agreement are hereby incorporated by
reference in their entirety.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act"), may be
permitted to directors, officers and controlling persons of
the Registrant and the principal underwriter pursuant to the
foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
4
<PAGE>
expenses incurred or paid by a director, officer, or
controlling person of the Registrant and the principal
underwriter in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant
by such director, officer or controlling person or the
principal underwriter in connection with the shares being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
Item 26. Business or Other Connections of Investment Adviser
-------- ---------------------------------------------------
Scudder Kemper Investments, Inc. has stockholders and
employees who are denominated officers but do not as such have
corporation-wide responsibilities. Such persons are not
considered officers for the purpose of this Item 26.
<TABLE>
<CAPTION>
Business and Other Connections of Board
Name of Directors of Registrant's Adviser
---- ------------------------------------
<S> <C>
Stephen R. Beckwith Treasurer, Scudder Kemper Investments, Inc.**
Director, Kemper Service Company
Director, Vice President and Treasurer, Scudder Fund Accounting Corporation*
Director and Treasurer, Scudder Stevens & Clark Corporation**
Director and Chairman, Scudder Defined Contribution Services, Inc.**
Director and President, Scudder Capital Asset Corporation**
Director and President, Scudder Capital Stock Corporation**
Director and President, Scudder Capital Planning Corporation**
Director and President, SS&C Investment Corporation**
Director and President, SIS Investment Corporation**
Director and President, SRV Investment Corporation**
Director and Chairman, Scudder Threadneedle International Ltd.
Director, Scudder Kemper Holdings (UK) Ltd. oo
Director and President, Scudder Realty Holdings Corporation *
Director, Scudder, Stevens & Clark Overseas Corporation o
Director and Treasurer, Zurich Investment Management, Inc. xx
Director and Treasurer, Zurich Kemper Investments, Inc.
Lynn S. Birdsong Director, Vice President and Chief Investment Officer, Scudder Kemper Investments,
Inc.**
Director and Chairman, Scudder Investments (Luxembourg) S.A.#
Director, Scudder Investments (U.K.) Ltd. oo
Director and Chairman of the Board, Scudder Investments Asia, Ltd. ooo
Director and Chairman, Scudder Investments Japan, Inc. +++
Senior Vice President, Scudder Investor Services, Inc.
Director and Chairman, Scudder Trust (Cayman) Ltd. @@@
Director, Scudder, Stevens & Clark Australia x
Director and Vice President, Zurich Investment Management, Inc. xx
Director and President, Scudder, Stevens & Clark Corporation **
Director and President, Scudder , Stevens & Clark Overseas Corporation o
Director, Scudder Threadneedle International Ltd.
Director, Korea Bond Fund Management Co., Ltd. @@
William H. Bolinder Director, Scudder Kemper Investments, Inc.**
Member Group Executive Board, Zurich Financial Services, Inc. ##
Chairman, Zurich-American Insurance Company xxx
5
<PAGE>
Nicholas Bratt Director, Scudder Kemper Investments, Inc.**
Vice President, Scudder, Stevens & Clark Corporation **
Vice President, Scudder, Stevens & Clark Overseas Corporation o
Laurence W. Cheng Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland ##
Director, ZKI Holding Corporation xx
Gunther Gose Director, Scudder Kemper Investments, Inc.**
CFO, Member Group Executive Board, Zurich Financial Services, Inc. ##
CEO/Branch Offices, Zurich Life Insurance Company ##
Rolf Huppi Director, Chairman of the Board, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland ##
Director, Chairman of the Board, Zurich Holding Company of America xxx
Director, ZKI Holding Corporation xx
Harold D. Kahn Chief Financial Officer, Scudder Kemper Investments, Inc.**
Kathryn L. Quirk Chief Legal Officer, Chief Compliance Officer and Secretary, Scudder Kemper
Investments, Inc.**
Director, Vice President, Chief Legal Officer and Secretary, Kemper Distributors, Inc.
Director and Secretary, Kemper Service Company
Director, Senior Vice President, Chief Legal Officer & Assistant Clerk, Scudder
Investor Services, Inc.
Director, Vice President & Secretary, Scudder Fund Accounting Corporation*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation*
Director & Assistant Clerk, Scudder Service Corporation*
Director and Secretary, SFA, Inc.*
Vice President, Director & Assistant Secretary, Scudder Precious Metals, Inc.***
Director, Scudder, Stevens & Clark Japan, Inc. ###
Director, Vice President and Secretary, Scudder, Stevens & Clark of Canada, Ltd.***
Director, Vice President and Secretary, Scudder Canada Investor Services Limited***
Director, Vice President and Secretary, Scudder Realty Advisers, Inc. @
Director and Secretary, Scudder, Stevens & Clark Corporation**
Director and Secretary, Scudder, Stevens & Clark Overseas Corporation o
Director, Vice President and Secretary, Scudder Defined Contribution Services, Inc.**
Director, Vice President and Secretary, Scudder Capital Asset Corporation**
Director, Vice President and Secretary, Scudder Capital Stock Corporation**
Director, Vice President and Secretary, Scudder Capital Planning Corporation**
Director, Vice President and Secretary, SS&C Investment Corporation**
Director, Vice President and Secretary, SIS Investment Corporation**
Director, Vice President and Secretary, SRV Investment Corporation**
Director, Vice President, Chief Legal Officer and Secretary, Scudder Financial
Services, Inc.*
Director, Korea Bond Fund Management Co., Ltd. @@
Director, Scudder Threadneedle International Ltd.
Director, Chairman of the Board and Secretary, Scudder Investments Canada, Ltd.
Director, Scudder Investments Japan, Inc. +++
Director and Secretary, Scudder Kemper Holdings (UK) Ltd. oo
Director and Secretary, Zurich Investment Management, Inc. xx
6
<PAGE>
Edmond D. Villani Director, President and Chief Executive Officer, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark Japan, Inc. ###
President and Director, Scudder, Stevens & Clark Overseas Corporation o
President and Director, Scudder, Stevens & Clark Corporation**
Director, Scudder Realty Advisors, Inc. @
Director, IBJ Global Investment Management S.A. Luxembourg, Grand-Duchy of Luxembourg
Director, Scudder Threadneedle International Ltd.
Director, Scudder Investments Japan, Inc. +++
Director, Scudder Kemper Holdings (UK) Ltd. oo
President and Director, Zurich Investment Management, Inc. xx
Director and Deputy Chairman, Scudder Investment Holdings Ltd.
</TABLE>
* Two International Place, Boston, MA
@ 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C.
Luxembourg B 34.564
*** Toronto, Ontario, Canada
@@@ Grand Cayman, Cayman Islands, British West Indies
o 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
xx 222 S. Riverside, Chicago, IL
xxx Zurich Towers, 1400 American Ln., Schaumburg, IL
@@ P.O. Box 309, Upland House, S. Church St., Grand Cayman,
British West Indies
## Mythenquai-2, P.O. Box CH-8022, Zurich, Switzerland
oo One South Place, 5th Floor, London EC2M 2ZS England
ooo One Exchange Square, 29th Floor, Hong Kong
+++ Kamiyachyo Mori Building, 12F1, 4-3-20, Toranomon, Minato-ku,
Tokyo 105-0001
x Level 3, Five Blue Street, North Sydney, NSW 2060
Item 27. Principal Underwriters.
-------- -----------------------
(a)
Scudder Investor Services, Inc. acts as principal underwriter of the
Registrant's shares and also acts as principal underwriter for other
funds managed by Scudder Kemper Investments, Inc.
(b)
The Underwriter has employees who are denominated officers of an
operational area. Such persons do not have corporation-wide
responsibilities and are not considered officers for the purpose of
this Item 27.
<TABLE>
<CAPTION>
(1) (2) (3)
Scudder Investor Services, Inc.
Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant
---------------- ------------------------------- -----------------------
<S> <C> <C> <C>
Lynn S. Birdsong Senior Vice President None
345 Park Avenue
New York, NY 10154
7
<PAGE>
Scudder Investor Services, Inc.
Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant
---------------- ------------------------------- -----------------------
Mark S. Casady President and Assistant Treasurer None
Two International Place
Boston, MA 02110
Linda Coughlin Director and Senior Vice President Trustee and President
Two International Place
Boston, MA 02110
Richard W. Desmond Vice President None
345 Park Avenue
New York, NY 10154
Paul J. Elmlinger Senior Vice President and Assistant None
345 Park Avenue Clerk
New York, NY 10154
Philip S. Fortuna Vice President None
101 California Street
San Francisco, CA 94111
William F. Glavin Vice President None
Two International Place
Boston, MA 02110
Margaret D. Hadzima Assistant Treasurer None
Two International Place
Boston, MA 02110
John R. Hebble Assistant Treasurer None
Two International Place
Boston, MA 02110
James J. McGovern Chief Financial Officer and Treasurer None
345 Park Avenue
New York, NY 10154
Lorie C. O'Malley Vice President None
Two International Place
Boston, MA 02110
Caroline Pearson Clerk Treasurer
Two International Place
Boston, MA 02110
Kathryn L. Quirk Director, Senior Vice President, Chief None
345 Park Avenue Legal Officer and Assistant Clerk
New York, NY 10154
Robert A. Rudell Director and Vice President None
Two International Place
Boston, MA 02110
8
<PAGE>
Scudder Investor Services, Inc.
Name and Principal Position and Offices with Positions and
Business Address Scudder Investor Services, Inc. Offices with Registrant
---------------- ------------------------------- -----------------------
William M. Thomas Vice President None
Two International Place
Boston, MA 02110
Benjamin Thorndike Vice President None
Two International Place
Boston, MA 02110
Linda J. Wondrack Vice President and Chief Compliance None
Two International Place Officer
Boston, MA 02110
</TABLE>
(c) Not applicable.
Item 28. Location of Accounts and Records.
-------- ---------------------------------
Certain accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the Rules
thereunder are maintained at the offices of the Custodian, the
Transfer Agent, the Distributor or the Registrant. Documents
required by paragraphs (b)(4), (5), (6), (7), (9), (10), and
(11) and (f) of Rule 31a-1 (the "Rule"), will be kept at the
offices of the Registrant, 345 Park Avenue, New York, New
York; certain documents required to be kept under paragraphs
(b)(1) and (b)(2)(iv) of the Rule will be kept at the offices
of Scudder Service Corporation, Two International Place,
Boston, Massachusetts 02110-4103; documents required to be
kept under paragraph (d) of the Rule will be kept at the
offices of Scudder Investor Services, Inc., Two International
Place, Boston, Massachusetts 02110-4103; and the remaining
accounts, books and other documents required by the Rule will
be kept at State Street Bank and Trust Company, 1776 Heritage
Drive, North Quincy, Massachusetts 02171.
Item 29. Management Services.
-------- --------------------
Not Applicable.
Item 30 Undertakings.
------- -------------
Not Applicable.
9
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(a) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Boston,
Commonwealth of Massachusetts on the 25th day of May, 2000.
SCUDDER MONEY MARKET TRUST
By /s/ John Millette
-----------------
John Millette
Trustee, Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Linda C. Coughlin
----------------------------------------
Linda C. Coughlin President and Trustee May 25, 2000
/s/ John Millette
----------------------------------------
John Millette Trustee, Vice President May 25, 2000
and Secretary
/s/ Caroline Pearson
----------------------------------------
Caroline Pearson Trustee, Vice President May 25, 2000
and Treasurer
</TABLE>
<PAGE>
File No. 2-78122
File No. 811-3495
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM N-1A
POST-EFFECTIVE AMENDMENT NO. 34
TO REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
AMENDMENT NO. 30
TO REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
SCUDDER MONEY MARKET TRUST
<PAGE>
SCUDDER MONEY MARKET TRUST
EXHIBIT INDEX
Exhibit (a)(16)
Exhibit (a)(17)
Exhibit (a)(18)
