SCUDDER
INVESTMENTS (sm)
[LOGO]
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MONEY MARKET
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Scudder Managed Shares
Scudder Money Market Series
Fund #023
Semiannual Report
November 30, 1999
The fund seeks as high a level of current income as is consistent with
liquidity, preservation of capital, and the fund's investment policies.
A no-load fund with no commissions to buy, sell, or exchange shares.
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Contents
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4 Letter from the Series' Chairperson
6 Investment Portfolio
10 Financial Statements
14 Financial Highlights
18 Notes to Financial Statements
22 Officers and Directors
23 Investment Products and Services
25 Scudder Solutions
2
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Scudder Managed Shares
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Ticker symbol MCAXX fund number 023
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Date of o Scudder Managed Shares exceeded the average taxable
Inception: money market fund total returns for the six- and
1/12/81 12-month periods according to Lipper Analytical
Services, Inc., as it benefited from the rising
Total Net interest rate environment. As of November 30, 1999,
Assets as of shares were providing a 5.59% 7-day yield and a 5.75%
11/30/99: 7-day compounded effective yield.
$388 million
3
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Letter from the Series' Chairperson
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Dear Shareholders,
In 1999 we witnessed another year of strong performance for the equity markets
as large-cap growth, especially technology stocks, recorded impressive returns.
Against the current backdrop of high consumer confidence, robust economic growth
and low inflation, these generous returns have had the potential to make other
asset classes seem less important to an investor's overall portfolio. However,
we believe the role of a highly liquid and high quality holdings has, in fact,
taken on renewed importance after such a prolonged rise for selected equities.
While we believe overall that the economy remains healthy, strong gains in
certain sectors can have the effect of unintentionally increasing one's exposure
to a particular asset class or industry sector. Given this potential, we
encourage shareholders to carefully review their holdings to ensure appropriate
allocations.
As a shareholder in one class of the Scudder Money Market Series, you already
hold a key element of a well-diversified portfolio. The series' conservative,
high quality, and very liquid investments can provide relative stability, high
current income, and a short-term parking place for a portion of your investment
portfolio. With short-term interest rates rising and inflation still relatively
low, investors are seeing some of the best real yields for money market funds in
years.
4
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For current information on the trust and your account, visit our Internet Web
site at www.scudder.com. There you'll find a wealth of information, including
the most recent performance, the latest news on Scudder products and services,
and the opportunity to perform account transactions. You can also speak with one
of our representatives by calling 1-800-SCUDDER (1-800-728-3337).
Thank you for your continued investment in Scudder Managed Shares.
Sincerely,
/s/Kathryn L. Quirk
Kathryn L. Quirk
Chairperson,
Scudder Managed Shares
5
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Investment Portfolio as of November 30, 1999 (Unaudited)
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Principal
Amount ($) Value ($)
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Money Market Series
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Repurchase Agreements 1.7%
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State Street Bank and Trust Company, 5.63%, to be
repurchased on 12/1/1999 at $95,517,936
(cost $95,503,000)** ............................... 95,503,000 95,503,000
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Commercial Paper 55.0%
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Alpine Securitization Corp., 6.05%, 1/21/2000 ...... 15,756,000 15,620,958
Alpine Securitization Corp., 5.85%, 2/10/2000 ...... 43,500,000 42,998,119
Alpine Securitization Corp., 5.85%, 2/25/2000 ...... 25,000,000 24,650,625
Amsterdam Funding Corp., 5.35%, 12/6/1999 .......... 50,000,000 49,962,847
Amsterdam Funding Corp., 5.84%, 1/14/2000 .......... 35,000,000 34,750,178
Amsterdam Funding Corp., 5.99%, 1/20/2000 .......... 31,239,000 30,979,109
Atlantis One Funding Corp., 6.00%, 1/25/2000 ....... 25,000,000 24,770,833
Atlantis One Funding Corp., 5.74%, 2/24/2000 ....... 50,000,000 49,322,361
Banco de Galicia y Buenos Aires, 5.4%, 12/21/1999 .. 35,000,000 34,895,000
Barton Capital Corp., 5.36%, 12/7/1999 ............. 50,000,000 49,955,333
Barton Capital Corp., 6.00%, 1/19/2000 ............. 13,500,000 13,389,750
Barton Capital Corp., 5.85%, 1/24/2000 ............. 40,911,000 40,552,006
Baxter International Inc., 5.75%, 1/31/2000 ........ 50,000,000 49,512,847
CSW Credit Corp., 6.00%, 1/13/2000 ................. 75,000,000 74,462,500
China Merchants, 5.42%, 12/8/1999 .................. 15,000,000 14,984,192
China Merchants, 6.03%, 2/25/2000 .................. 40,000,000 39,423,800
Coca-Cola Enterprises, 5.81%, 1/28/2000 ............ 40,000,000 39,625,578
Corporate Asset Funding Co., 5.98%, 1/26/2000 ...... 50,000,000 49,534,889
Corporate Receivables Corp., 5.98%, 1/26/2000 ...... 50,000,000 49,534,889
Corporate Receivables Corp., 6.05%, 1/26/2000 ...... 50,000,000 49,529,444
Duke Capital Corp., 5.86%, 1/27/2000 ............... 35,000,000 34,675,258
Enterprise Funding Corp., 6.05%, 1/28/2000 ......... 26,371,000 26,113,956
Eureka Securitization Inc., 6.00%, 1/25/2000 ....... 50,000,000 49,541,667
Eureka Securitization Inc., 6.00%, 2/4/2000 ........ 50,000,000 49,458,333
Falcon Asset Securitization Corp., 5.35%, 12/15/1999 100,000,000 99,791,944
Falcon Asset Securitization Corp., 6.05, 1/13/2000 . 75,000,000 74,458,021
Forrestal Funding, 5.80%, 1/21/2000 ................ 50,000,000 49,589,167
Forrestal Funding, 6.07%, 1/25/2000 ................ 29,000,000 28,731,065
Fortis Finance Inc., 5.95%, 2/24/2000 .............. 45,605,000 44,964,313
Fountain Square, 6.11%, 1/31/2000 .................. 23,549,000 23,305,195
Four Winds Funding Corp., 5.34%, 12/6/1999 ......... 60,000,000 59,955,500
The accompanying notes are an integral part of the financial statements
6
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Principal
Amount ($) Value ($)
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Four Winds Funding Corp., 5.90%, 2/1/2000 ........... 37,000,000 36,624,039
GMAC Mortgage Corporation of Pennsylvania, 5.465%,
12/1/1999 ........................................... 64,000,000 64,000,000
GTE Corp., 6.00%, 2/29/2000 ......................... 14,000,000 13,790,000
Galaxy Funding Corp., 5.99%, 2/24/2000 .............. 75,000,000 73,939,271
Giro Funding Corp., 6.06%, 2/1/2000 ................. 20,000,000 19,791,267
International Securitization Corp., 5.37%, 12/3/1999 50,000,000 49,985,083
International Securitization Corp., 6.15%, 1/18/2000 36,617,000 36,316,741
International Securitization Corp., 6.13%, 1/31/2000 68,719,000 68,005,220
Intrepid Funding Master Trust, 5.75%, 1/27/2000 ..... 50,000,000 49,544,792
Lexington Parker Capital Corp., 6.10%, 1/25/2000 .... 50,000,000 49,534,028
Lexington Parker Capital Corp., 6.01%, 1/26/2000 .... 20,000,000 19,813,022
Lexington Parker Capital Corp., 6.00%, 1/27/2000 .... 50,000,000 49,525,000
Mont Blanc Capital Corp., 5.85%, 1/21/2000 .......... 35,760,000 35,463,639
Mont Blanc Capital Corp., 6.00%, 1/24/2000 .......... 42,000,000 41,622,000
Monte Rosa Capital Corp., 5.86%, 1/21/2000 .......... 29,280,000 29,036,927
Morgan Stanley, 6.00%, 1/27/2000 .................... 100,000,000 99,050,000
Moriarty Ltd., 6.05%, 1/14/2000 ..................... 50,000,000 49,630,278
Moriarty Ltd., 6.08%, 1/18/2000 ..................... 25,000,000 24,797,333
Nordbanken North America, Inc., 5.85%, 2/1/2000 ..... 10,000,000 9,899,250
Old Line Funding Corp., 6.00%, 1/31/2000 ............ 12,000,000 11,878,000
Park Avenue Receivables, 5.35%, 12/6/1999 ........... 63,371,000 63,323,912
Preferred Receivables Funding Corp., 6.03%, 1/27/2000 90,000,000 89,137,875
Preferred Receivables Funding Corp., 6.05%, 1/28/2000 50,000,000 49,514,250
Province of British Columbia, 5.05%, 12/6/1999 ...... 11,800,000 11,791,724
Receivables Capital Corp., 5.82%, 1/14/2000 ......... 50,000,000 49,644,333
Receivables Capital Corp., 6.00%, 1/25/2000 ......... 30,000,000 29,725,000
Royal Bank of Scotland, 5.99%, 1/20/2000 ............ 50,000,000 49,584,028
Scaldis Capital LLC, 5.95%, 3/24/2000 ............... 15,603,000 15,309,013
Sheffield Receivables Corp., 6.10%, 1/20/2000 ....... 50,000,000 49,576,389
Sheffield Receivables Corp., 6.05%, 1/21/2000 ....... 50,000,000 49,571,458
Spintab AB, 6.00%, 1/21/2000 ........................ 75,000,000 74,362,500
Superior Funding Corp., 6.00%, 2/29/2000 ............ 91,330,000 89,960,050
Sweetwater Capital Corp., 5.36%, 12/8/1999 .......... 100,000,000 99,895,778
Sweetwater Capital Corp., 6.10%, 1/25/2000 .......... 16,614,000 16,459,167
Sweetwater Capital Corp., 6.09%, 1/31/2000 .......... 40,564,000 40,145,413
Thunder Bay Funding, Inc., 5.37%, 12/1/1999 ......... 50,000,000 50,000,000
UBS Finance Corp., 4.93%, 12/15/1999 ................ 50,000,000 49,904,139
Variable Funding Corp., 5.82%, 1/19/2000 ............ 50,000,000 49,603,917
WCP Funding Inc., 6.00%, 2/25/2000 .................. 50,000,000 49,283,333
The accompanying notes are an integral part of the financial statements
7
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Principal
Amount ($) Value ($)
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Windmill Funding Corp., 6.05%, 1/13/2000 ........... 25,000,000 24,819,340
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Total Commercial Paper (Cost $3,152,897,186) 3,152,897,186
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Certificates Of Deposit 23.7%
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Allfirst Bank, 5.592%, 12/6/1999* .................. 50,000,000 49,988,628
AmSouth Bank, 6.144%, 12/12/1999* .................. 40,000,000 40,000,000
Bank of America, 5.749%, 1/21/2000* ................ 50,000,000 50,000,000
Bayerische Landesbank, 5.289%, 12/10/1999* ......... 40,000,000 39,990,005
Canadian Imperial Bank, 6.005%, 1/7/2000* .......... 10,000,000 9,997,363
Capital One Bank, 5.75%, 12/1/1999* ................ 29,900,000 29,900,000
Capital One Bank, 5.75%, 12/1/1999* ................ 23,806,000 23,806,000
Capital One Bank, 5.75%, 12/1/1999* ................ 26,224,000 26,224,000
Den Danske Bank, 5.529%, 12/23/1999* ............... 30,000,000 29,993,376
Denmark Danske Bank, 5.379%, 12/17/1999* ........... 20,000,000 19,996,645
Deutsche Bank AG, 5.63%, 1/26/2000* ................ 40,000,000 39,988,535
Dresdner Bank, 5.438%, 12/1/1999 ................... 198,000,000 198,000,000
Dresdner Bank, 5.559%, 12/23/1999* ................. 50,000,000 49,987,435
Fifth Third Bank, 5.625%, 12/1/1999 ................ 270,000,000 270,000,000
First Union National Bank, 5.379%, 12/8/1999* ...... 20,000,000 20,000,000
First Union National Bank, 5.614%, 12/27/1999* ..... 15,000,000 15,000,000
Huntington Bank, 5.438%, 12/1/1999 ................. 99,000,000 99,000,000
Key Bank, N.A., 5.395%, 12/8/1999* ................. 35,000,000 34,980,320
National City Bank of Cleveland, 5.438%, 12/1/1999 . 270,000,000 270,000,000
Old Kent Bank, 5.69%, 12/16/1999* .................. 10,000,000 9,997,868
PNC Bank Corp., 5.574%, 12/27/1999* ................ 35,000,000 35,001,633
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Total Certificates of Deposit (Cost $1,361,851,808) 1,361,851,808
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Short-Term and Medium-Term Notes 19.6%
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American Express Centurion Bank, 5.417%, 12/15/1999* 15,000,000 15,000,000
American Express Centurion Bank, 5.462%, 12/20/1999* 15,000,000 15,000,000
American Express Centurion Bank, 5.562%, 12/22/1999* 22,000,000 22,000,000
American Honda Finance Corp., 5.622%, 12/22/1999* .. 15,500,000 15,499,320
AmSouth Bank, 5.347%, 12/15/1999* .................. 20,000,000 19,997,705
Bank of Montreal, 5.80%, 12/9/1999* ................ 50,000,000 49,981,147
BankOne Corp., 6.115%, 1/5/2000* ................... 25,000,000 24,989,679
BankOne Corp., 6.239%, 2/4/2000* ................... 20,000,000 19,998,796
The accompanying notes are an integral part of the financial statements
8
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Principal
Amount ($) Value ($)
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Caterpillar Financial Services, 6.064%, 2/11/2000* . 15,000,000 15,001,522
CIT Group Holdings Corp., 5.632%, 2/16/2000* ....... 40,000,000 39,988,131
Comerica Bank, 5.32%, 12/13/1999* .................. 25,000,000 24,993,431
Comerica Bank, 5.65%, 12/15/1999* .................. 40,000,000 39,994,544
Credit Suisse First Boston Corp., 5.72%, 12/9/1999* 50,000,000 50,000,000
Fleet National Bank, 5.66%, 12/15/1999* ............ 50,000,000 49,994,399
Goldman Sachs Group, 6.21%, 2/3/2000 ............... 65,000,000 65,000,000
IBM Corp., 5.07%, 3/22/2000 ........................ 50,000,000 49,992,286
John Deere Capital Corp., 5.65%, 12/15/1999* ....... 41,000,000 40,994,150
Key Bank., N.A., 6.084%, 2/21/2000* ................ 22,000,000 22,001,321
MMR Funding I, 5.75%, 12/1/1999* ................... 5,500,000 5,500,000
National City Bank of Kentucky, 6.21%, 1/7/2000* ... 50,000,000 50,031,488
National Rural Utilities Cooperative Finance Corp.,
5.425%, 12/8/1999* ................................. 50,000,000 49,992,295
Norwest Financial Inc., 5.425%, 12/7/1999* ......... 50,000,000 49,977,343
PNC Bank Corp., 5.315%, 12/7/1999* ................. 25,000,000 24,993,674
Sigma Finance Inc., 5.732%, 12/30/1999* ............ 65,000,000 65,000,000
Skandinaviska Enskilda, 5.611%, 12/29/1999* ........ 25,000,000 24,992,688
Skandinaviska Enskilda, 6.082%, 12/24/1999* ........ 50,000,000 49,990,448
SMM Trust Series 1999-A, 6.298%, 1/13/2000* ........ 50,000,000 50,000,000
Southern California Edison, 5.694%, 12/27/1999* .... 20,000,000 20,000,000
Student Loan Marketing Association, 6.00%, 2/1/2000* 30,000,000 29,990,633
Transamerica Finance Corp., 6.173%, 12/1/1999* ..... 50,000,000 50,000,000
Xerox Credit Corp., 6.044%, 2/8/2000* .............. 75,000,000 74,971,860
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Total Short-Term and Medium-Term Notes (Cost $1,125,866,860) 1,125,866,860
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Total Investment Portfolio -- 100.0% (Cost $5,736,118,854) (a) 5,736,118,854
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(a) Cost for federal income tax purposes is $5,736,118,854.
* Floating rate notes are securities whose yields vary with a designated
market index or market rate, such as the coupon-equivalent of the Treasury
bill rate. These securities are shown at their rate as of November 30,
1999.
** Repurchase agreements are fully collateralized by U.S. Treasury and
Government agency securities.
The accompanying notes are an integral part of the financial statements
9
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Financial Statements
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Statement of Assets and Liabilities as of November 30, 1999 (Unaudited)
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<TABLE>
<CAPTION>
Assets
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<S> <C>
Investments in securities, at value (cost $5,736,118,854) ...................... $ 5,736,118,854
Cash ........................................................................... 1,684,356
Receivable for Fund shares sold ................................................ 164,976
Interest receivable ............................................................ 9,205,585
Other assets ................................................................... 348,449
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Total assets ................................................................... 5,747,522,220
Liabilities
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Dividends payable .............................................................. 22,688,829
Accrued management fee ......................................................... 878,146
Other accrued expenses and payables ............................................ 300,009
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Total liabilities .............................................................. 23,866,984
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Net assets, at value ........................................................... $ 5,723,655,236
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Net Asset Value
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Managed Shares:
Net assets applicable to shares outstanding .................................... $ 388,325,124
Shares outstanding of capital stock, $.001 par value, 800,000,000, ............. 388,325,124
500,000,000, and 1,500,000,000 shares authorized, respectively
Net Asset Value, offering and redemption price per share (net ---------------
assets / shares outstanding).................................................... $ 1.00
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Institutional Shares:
Net assets applicable to shares outstanding..................................... $4,205,847,586
Shares outstanding of capital stock, $.001 par value, 3,615,000,000,
500,000,000, and 1,500,000,000 shares authorized, respectively.................. 4,205,847,586
Net Asset Value, offering and redemption price per share ---------------
(net assets / shares outstanding)............................................... $ 1.00
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Premium Money Market Shares:
Net assets applicable to shares outstanding..................................... $1,079,963,105
Shares outstanding of capital stock, $.001 par value, 2,180,000,000
shares authorized.............................................................. 1,079,963,105
Net Asset Value, offering and redemption price per share (net assets / shares ---------------
outstanding).................................................................... $ 1.00
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Prime Reserve Money Market Shares:
Net assets applicable to shares outstanding .................................... $ 49,519,421
Shares outstanding of capital stock, $.001 par value, 1,180,000,000 ............ 49,519,421
shares authorized
Net Asset Value, offering and redemption price per share (net ---------------
assets / shares outstanding).................................................... $ 1.00
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</TABLE>
The accompanying notes are an integral part of the financial statements
10
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Statement of Operations for the six months ended November 30, 1999 (Unaudited)
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Investment Income
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Interest ...................................................... $ 110,461,974
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Expenses:
Management fee ................................................ 5,047,311
Services to shareholders ...................................... 502,320
Custodian and accounting fees ................................. 288,416
Auditing ...................................................... 15,439
Legal ......................................................... 33,863
Directors' fees and expenses .................................. 8,001
Reports to shareholders ....................................... 77,548
Registration fees ............................................. 177,793
Other ......................................................... 108,454
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Total expenses, before expense reductions ..................... 6,259,145
Expense reductions ............................................ (2,900,715)
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Total expenses, after expense reductions ...................... 3,358,430
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Net investment income ......................................... 107,103,544
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Net increase (decrease) in net assets resulting from operations $ 107,103,544
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The accompanying notes are an integral part of the financial statements
11
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Statements of Changes in Net Assets -- Money Market Series
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Increase (Decrease) in Net Assets
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Operations:
Net investment income...........................................................
Distributions to shareholders from:.............................................
Net investment income (Managed Shares)..........................................
Net investment income (Institutional Shares)....................................
Net investment income (Premium Money Market Shares).............................
Net investment income (Prime Reserve Money Market Shares).......................
Fund share transactions:
Managed Shares:
Proceeds from shares sold.......................................................
Reinvestment of distributions...................................................
Cost of shares redeemed.........................................................
Net increase (decrease) in net assets from Fund share transactions..............
Institutional Shares:
Proceeds from shares sold.......................................................
Reinvestment of distributions...................................................
Cost of shares redeemed.........................................................
Net increase (decrease) in net assets from Fund share transactions..............
Premium Money Market Shares:
Proceeds from shares sold ......................................................
Reinvestment of distributions ..................................................
Cost of shares redeemed ........................................................
Net increase (decrease) in net assets from Fund share transactions .............
Prime Reserve Money Market Shares:
Proceeds from shares sold ......................................................
Reinvestment of distributions ..................................................
Cost of shares redeemed ........................................................
Net increase (decrease) in net assets from Fund share transactions .............
Increase (decrease) in net assets ..............................................
Net assets at beginning of period ..............................................
Net assets at end of period ....................................................
The accompanying notes are an integral part of the financial statements
12
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Six Months
Ended November Five Months Year Ended
30, 1999 Ended May 31, December 31,
(Unaudited) 1999 1998
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$ 107,103,544 $ 59,023,051 $ 88,278,881
- ----------------- ---------------- ---------------
(9,980,703) (7,380,665) (18,908,573)
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(70,041,806) (33,615,524) (38,347,244)
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(25,981,816) (17,567,663) (30,962,225)
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(1,099,219) (459,199) (60,839)
- ----------------- ---------------- ---------------
527,962,270 673,318,688 1,521,267,560
,138,664 1,551,477 5,506,361
(536,988,550) (607,192,461) (1,568,154,523)
- ----------------- ---------------- ---------------
(6,887,616) 67,677,704 (41,380,602)
- ----------------- ---------------- ---------------
33,775,631,487 11,712,781,921 5,884,096,724
17,038,827 11,965,433 14,372,769
(31,392,611,715) (10,985,348,196) (5,169,903,810)
- ----------------- ---------------- ---------------
2,400,058,599 739,399,158 728,565,683
- ----------------- ---------------- ---------------
1,238,835,258 1,070,305,354 2,381,877,957
22,357,959 15,125,932 24,053,642
(1,117,314,163) (956,923,660) (1,933,144,105)
- ----------------- ---------------- ---------------
143,879,054 128,507,626 472,787,494
- ----------------- ---------------- ---------------
52,526,677 41,129,865 15,004,074
949,488 341,450 17,985
(37,771,971) (19,992,513) (2,685,634)
- ----------------- ---------------- ---------------
15,704,194 21,478,802 12,336,425
- ----------------- ---------------- ---------------
2,552,754,231 957,063,290 1,172,309,000
3,170,901,005 2,213,837,715 1,041,528,715
-------------- -------------- --------------
$5,723,655,236 $3,170,901,005 $2,213,837,715
-------------- -------------- --------------
The accompanying notes are an integral part of the financial statements
13
<PAGE>
Financial Highlights
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Money Market Series
The following table includes selected data for a share of the Managed Shares
class outstanding throughout each period and other performance information
derived from the financial statements.
Managed Shares (a)
<TABLE>
<CAPTION>
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1999(b) 1999(c) 1998(d) 1997(d) 1996(d) 1995(d) 1994(d)
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<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------------------------------------------------------
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Net investment income .026 .020 .052 .051 .049 .054 .038
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Distributions from net
investment income (.026) (.020) (.052) (.051) (.049) (.054) (.038)
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Net asset value, end $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
of period ------------------------------------------------------
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Total return (%) (e) 2.61** 1.99** 5.33 5.21 4.97 5.57 3.86
Ratios to Average Net Assets and Supplemental Data
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Net assets, end of period
($ millions) 388 395 328 369 431 372 367
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Ratio of expenses before
expense reductions (%) .37* .37* .48 .59 .62 .68 .68
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Ratio of expenses after
expense reductions (%) .23* .23* .38 .49 .55 .55 .55
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Ratio of net investment 5.21* 4.78* 5.20 5.00 4.86 5.45 3.84
income (%)
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</TABLE>
(a) Effective July 7, 1997, Scudder Money Market Series (formerly known as the
Managed Cash Fund) was divided into four classes, of which Managed Shares
is one. Shares of the Fund outstanding on such date were redesignated as
the Managed Shares of the Fund. The data set forth above for the periods
prior to July 17, 1997, reflects the investment performance of the Fund
prior to such redesignation.
(b) For the six months ended November 30, 1999 (Unaudited).
(c) For the five months ended May 31, 1999. On November 13, 1998, the Board of
Directors of the Corporation changed the fiscal year end of the Fund from
December 31 to May 31.
(d) For the year ended December 31.
(e) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
14
<PAGE>
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The following table includes selected data for a share
of the Institutional Shares class outstanding
throughout each period and other performance
information derived from the financial statements.
Institutional Shares
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1999(a) 1999(b) 1998(c) 1997(d)
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Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000
--------------------------------
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Net investment income .026 .020 .054 .022
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Distributions from net investment income (.026) (.020) (.054) (.022)
- --------------------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000
--------------------------------
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Total return (%) (e) 2.65** 2.03** 5.52 2.25**
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Ratios to Average Net Assets and Supplemental Data
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Net assets, end of period ($ millions) 4,206 1,806 1,066 338
- --------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) .28* .28* .29 .31*
- --------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) .14* .14* .18 .26*
- --------------------------------------------------------------------------------
Ratio of net investment income (%) 5.30* 4.87* 5.34 5.39*
- --------------------------------------------------------------------------------
(a) For the six months ended November 30, 1999 (Unaudited).
(b) For the five months ended May 31, 1999. On November 13, 1998, the Board of
Directors of the Corporation changed the fiscal year end of the Fund from
December 31 to May 31.
(c) For the year ended December 31, 1998. (d) For the period August 4, 1997
(commencement of sale of Institutional Shares) to December 31, 1997.
(e) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
15
<PAGE>
The following table includes selected data for a share of the Premium Money
Market Shares class outstanding throughout each period and other performance
information derived from the financial statements. Premium Money Market Shares
- --------------------------------------------------------------------------------
1999(a) 1999(b) 1998(c) 1997(d)
- --------------------------------------------------------------------------------
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000
--------------------------------
- --------------------------------------------------------------------------------
Net investment income .026 .020 .053 .026
- --------------------------------------------------------------------------------
Distributions from net investment income (.026) (.020) (.053) (.026)
- --------------------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000
-------------------------------
- --------------------------------------------------------------------------------
Total return (%) (e) 2.62** 2.00** 5.46 2.62**
- --------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
- --------------------------------------------------------------------------------
Net assets, end of period ($ millions) 1,080 936 808 335
- --------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) .33* .34* .35 .43*
- --------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) .19* .20* .24 .38*
- --------------------------------------------------------------------------------
Ratio of net investment income (%) 5.25* 4.81* 5.31 5.50*
- --------------------------------------------------------------------------------
(a) For the six months ended November 30, 1999 (Unaudited).
(b) For the five months ended May 31, 1999. On November 13, 1998, the Board of
Directors of the Corporation changed the fiscal year end of the Fund from
December 31 to May 31.
(c) For the year ended December 31, 1998.
(d) For the period August 4, 1997 (commencement of sale of Premium Money Market
Shares) to December 31, 1997.
(e) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
16
<PAGE>
The following table includes selected data for a share of the Prime Reserve
Money Market Shares class outstanding throughout each period and other
performance information derived from the financial statements.
Prime Reserve Money Market Shares
- --------------------------------------------------------------------------------
1999(a) 1999(b) 1998(c)
- --------------------------------------------------------------------------------
Net asset value, beginning of period $1.000 $1.000 $1.000
-----------------------
- --------------------------------------------------------------------------------
Net investment income .025 .020 .011
- --------------------------------------------------------------------------------
Distributions from net investment income (.025) (.020) (.011)
- --------------------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000
-----------------------
- --------------------------------------------------------------------------------
Total return (%) (d) 2.53** 1.98** 1.06**
- --------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
- --------------------------------------------------------------------------------
Net assets, end of period ($ millions) 50 34 12
- --------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) .53* .40* .45*
- --------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) .39* .26* .31*
- --------------------------------------------------------------------------------
Ratio of net investment income (%) 5.05* 4.73* 4.95*
- --------------------------------------------------------------------------------
(a) For the six months ended November 30, 1999 (Unaudited).
(b) For the five months ended May 31, 1999. On November 13, 1998, the Board of
Directors of the Corporation changed the fiscal year end of the Fund from
December 31 to May 31.
(c) For the period October 15, 1998 (commencement of sale of Prime Reserve
Money Market Shares) to December 31, 1998.
(d) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
17
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
A. Significant Accounting Policies
Scudder Money Market Series (the "Cash Fund" or the "Fund"), Scudder Tax Free
Money Market Series ("Tax Free Fund") and Scudder Government Money Market Series
("Government Fund") (collectively, the "Funds") are the three diversified
investment portfolios comprising Scudder Fund, Inc. (the "Corporation"), which
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company. Each of the Funds offers
classes of shares as follows: Scudder Money Market Series offers Premium Money
Market Shares, Prime Reserve Money Market Shares, Managed Shares and
Institutional Shares; Scudder Tax Free Money Market Series offers Managed Shares
and Institutional Shares; and Scudder Government Money Market Series offers
Managed Shares and Institutional Shares.
The Board of Directors of Scudder Fund, Inc. has approved the ceasing of
operations of the Institutional Shares and Managed Shares of Scudder Tax Free
Money Market Series and Scudder Government Money Market Series effective on or
about January 24, 2000.
On November 13, 1998 the Board of Directors changed the fiscal year end of the
Fund from December 31 to May 31.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses and expense reductions, if any, are borne pro rata on the
basis of relative net assets by the holders of all classes of shares except that
each class bears certain expenses unique to that class such as shareholder
services, administrative services and certain other class specific expenses.
Differences in class expenses may result in payment of different per share
dividends by class. All shares of the Fund have equal rights with respect to
voting subject to class specific arrangements.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. The Fund values all portfolio securities utilizing the
amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act
and pursuant to which the Fund must adhere to certain conditions. Under this
method, which does not take into account unrealized gains or
18
<PAGE>
losses on securities, an instrument is initially valued at its cost and
thereafter assumes a constant amortization to maturity of any discount or
premium.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Federal Income Taxes. The Corporation's policy is to comply with the
requirements of the Internal Revenue Code, as amended, which are applicable to
regulated investment companies and to distribute all of its taxable and
tax-exempt income to its shareholders. Accordingly, the Fund paid no federal
income taxes and no federal income tax provision was required.
At May 31, 1999, the Fund had a net tax basis capital loss carryforward of
approximately $1,200 which may be applied against any realized net taxable gains
of each succeeding year until fully utilized or until May 31, 2007, the
expiration date.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a daily dividend and is distributed to shareholders monthly. Net
realized gains from investment transactions, in excess of available capital loss
carryforwards, would be taxable to the Fund if not distributed, and, therefore,
will be distributed to shareholders at least annually.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. All discounts and premiums are accreted/amortized for both tax and
financial reporting purposes.
B. Related Parties
Under the Management Agreements (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"), the Adviser directs the
investments of each Fund in accordance with its investment objectives, policies,
and restrictions. The Adviser determines the securities, instruments, and other
contracts relating to investments to be purchased, sold, or entered into by each
Fund. The Adviser receives an investment management fee at an annual rate of
0.25% of average daily net assets for the Fund. Also, the Adviser has agreed to
waive a portion of its investment management fee for
19
<PAGE>
the Fund. The fee was waived to the extent necessary so that the total
annualized investment management fee of the Fund does not exceed 0.11% of
average daily net assets.
For the six months ended November 30, 1999, the Adviser did not impose fees of
$2,826,494 and did impose fees of $2,220,817.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Funds. Each
class of each Fund has entered into a Transfer Agency and Service Agreement with
SSC. SSC receives account fees that vary according to the account size and type
of account of the shareholders of the respective classes. For the six months
ended November 30, 1999 the following amounts were charged to the Fund:
Managed Shares .............................................. $ 50,480
Institutional Shares ........................................ 16,902
Premium Shares .............................................. 228,162
Prime Reserve Shares ........................................ 64,655
--------
$360,199
--------
Amount unpaid at November 30, 1999 .......................... $109,341
The Fund has arrangements with certain banks, institutions and other persons
under which they receive compensation from the Fund and the Adviser for
performing shareholder servicing functions for their customers who own shares in
the Fund. In connection with these arrangements for the six months ended
November 30, 1999, the Fund's receivable for the Adviser's portion of
shareholder servicing fees paid to certain banks and institutions aggregated
$91,350.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Fund. For the six months
ended November 30, 1999, the amount charged to the Fund by SFAC aggregated
$196,958, of which $163,262 remains unpaid at November 30, 1999.
The Corporation pays each of its Directors not affiliated with the Adviser an
annual retainer, plus specified amounts for attended board and committee
meetings. For the six months ended November 30, 1999, Directors' fees and
expenses aggregated $8,001.
The Corporation has a compensation arrangement under which payment of directors'
fees may be deferred. Interest is accrued (based on the rate of return
20
<PAGE>
earned on the 90 day Treasury Bill as determined at the beginning of each
calendar quarter) on the deferred balances and is included in "Directors' fees
and expenses." The accumulated balance of deferred directors' fees and interest
thereon relating to the Fund constituting the Corporation aggregated $95,376 as
of November 30, 1999, an applicable portion of which is included in accrued
expenses of the Fund.
Other. Printing and postage expenses related to preparing and distributing
material such as shareholder reports, prospectuses and proxy materials to
current shareholders are charged to each class based on the number of
shareholder accounts. For the six months ended November 30, 1999, the following
amounts were expensed by the Fund:
Managed Shares .............................................. $19,571
Institutional Shares ........................................ 35,015
Premium Shares .............................................. 15,504
Prime Reserve Shares ........................................ 7,458
-------
$77,548
-------
Amount unpaid at November 30, 1999 .......................... $27,406
C. Expense Off-Set Arrangements
The Fund has entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of the Fund's expenses. During the six months ended November
30, 1999, the custodian and transfer agent fees were reduced as follows:
Custodian .............................................. $29,738
Transfer Agent ......................................... 44,483
-------
$74,221
-------
D. Line of Credit
The Corporation and several other Scudder Funds (the "Participants") share in a
$1 billion revolving credit facility for temporary or emergency purposes,
including the meeting of redemption requests that otherwise might require the
untimely disposition of securities. The Participants are charged an annual
commitment fee which is allocated among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 33 percent of its net assets under the agreement.
21
<PAGE>
Officers and Directors
- --------------------------------------------------------------------------------
Kathryn L. Quirk* Ann M. McCreary*
o Chairperson, President o Vice President
and Assistant Secretary
Frank J. Rachwalski, Jr.*
Dr. Rosita P. Chang o Vice President
o Director; Professor of Finance,
University of Rhode Island John Millette*
o Vice President and Secretary
Edgar R. Fiedler
o Director; Senior Fellow John R. Hebble*
and Economic Counsellor, The o Treasurer
Conference Board, Inc.
Caroline Pearson*
Peter B. Freeman o Assistant Secretary
o Director; Corporate Director and
Trustee *Scudder Kemper Investments, Inc.
Dr. J. D. Hammond
o Director; Dean, Smeal College of
Business Administration
Richard M. Hunt
o Director; University Marshal and
Senior Lecturer, Harvard University
22
<PAGE>
Investment Products and Services
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
<S> <C>
Money Market U.S. Growth and Income
Scudder U.S. Treasury Money Fund Scudder Balanced Fund
Scudder Cash Investment Trust Scudder Dividend & Growth Fund
Scudder Money Market Series -- Scudder Growth and Income Fund
Prime Reserve Shares* Scudder Select 500 Fund
Premium Shares* Scudder S&P 500 Index Fund
Managed Shares* Scudder Real Estate Investment Fund
Scudder Government Money Market
Series -- Managed Shares* U.S. Growth
Value
Tax Free Money Market+ Scudder Large Company Value Fund
Scudder Tax Free Money Fund Scudder Value Fund***
Scudder Tax Free Money Market Scudder Small Company Value Fund
Series -- Managed Shares* Scudder Micro Cap Fund
Scudder California Tax Free Money Fund** Growth
Scudder New York Tax Free Money Fund** Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Tax Free+ Scudder Select 1000 Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Medium Term Tax Free Fund Scudder 21st Century Growth Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund Global Equity
Scudder California Tax Free Fund** Worldwide
Scudder Massachusetts Limited Term Scudder Global Fund
Tax Free Fund** Scudder International Value Fund
Scudder Massachusetts Tax Free Fund** Scudder International Growth and
Scudder New York Tax Free Fund** Income Fund
Scudder Ohio Tax Free Fund** Scudder International Fund++
Scudder International Growth Fund
U.S. Income Scudder Global Discovery Fund***
Scudder Short Term Bond Fund Scudder Emerging Markets Growth Fund
Scudder GNMA Fund Scudder Gold Fund
Scudder Income Fund Regional
Scudder Corporate Bond Fund Scudder Greater Europe Growth Fund
Scudder High Yield Bond Fund Scudder Pacific Opportunities Fund
Scudder Latin America Fund
Global Income The Japan Fund, Inc.
Scudder Global Bond Fund
Scudder International Bond Fund Industry Sector Funds
Scudder Emerging Markets Income Fund Choice Series
Scudder Financial Services Fund
Asset Allocation Scudder Heath Care Fund
Scudder Pathway Conservative Portfolio Scudder Technology Fund
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio Preferred Series
Scudder Tax Managed Growth Fund
Scudder Tax Managed Small Company Fund
</TABLE>
23
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
- --------------------------------------------------------------------------------
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs Education Accounts
Traditional IRA Education IRA
Roth IRA UGMA/UTMA
SEP-IRA
Keogh Plan
401(k), 403(b) Plans
Variable Annuities
Scudder Horizon Plan**+++ +++
Scudder Horizon Advantage**+++ +++ +++
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Closed-End Funds#
- -----------------------------------------------------------------------------------------
<S> <C>
The Argentina Fund, Inc. Montgomery Street Income Securities, Inc.
The Brazil Fund, Inc. Scudder Global High Income Fund, Inc.
The Korea Fund, Inc. Scudder New Asia Fund, Inc.
</TABLE>
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money.
+++ Funds within categories are listed in order from expected least
risk to most risk. Certain Scudder funds or classes thereof may
not be available for purchase or exchange.
+ A portion of the income from the tax-free funds may be subject to
federal, state, and local taxes.
* A class of shares of the fund.
** Not available in all states.
*** Only the Scudder Shares of the fund are part of the Scudder Family
of Funds.
++ Only the International Shares of the fund are part of the Scudder
Family of Funds.
+++ +++ A no-load variable annuity contract provided by Charter National
Life Insurance Company and its affiliate, offered by Scudder's
insurance agencies, 1-800-225-2470.
+++ +++ +++ A no-load variable annuity contract issued by Glenbrook Life and
Annuity Company and underwritten by Allstate Financial Services,
Inc., sold by Scudder's insurance agencies, 1-800-225-2470.
# These funds, advised by Scudder Kemper Investments, Inc., are
traded on the New York Stock Exchange and, in some cases, on
various other stock exchanges.
24
<PAGE>
Scudder Solutions
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Convenient Automatic Investment Plan
ways to invest,
quickly and A convenient investment program in which money is
reliably electronically debited from your bank account monthly to
regularly purchase fund shares and "dollar cost average" --
buy more shares when the fund's price is lower and fewer
when it's higher, which can reduce your average purchase
price over time.*
Automatic Dividend Transfer
The most timely, reliable, and convenient way to purchase
shares -- use distributions from one Scudder fund to
purchase shares in another, automatically (accounts with
identical registrations or the same social security or tax
identification number).
QuickBuy
Lets you purchase Scudder fund shares electronically,
avoiding potential mailing delays; money for each of your
transactions is electronically debited from a previously
designated bank account.
Payroll Deduction and Direct Deposit
Have all or part of your paycheck -- even government checks
-- invested in up to four Scudder funds at one time.
* Dollar cost averaging involves continuous investment in
securities regardless of price fluctuations and does not
assure a profit or protect against loss in declining
markets. Investors should consider their ability to
continue such a plan through periods of low price
levels.
Around-the- Scudder Automated Information Line: SAIL(TM) --
clock electronic 1-800-343-2890
account
service and Personalized account information, the ability to exchange
information, or redeem shares, and information on other Scudder funds
including some and services via touchtone telephone.
transactions
Scudder's Web Site -- www.scudder.com
Personal Investment Organizer: Offering account information
and transactions, interactive worksheets, prospectuses and
applications for all Scudder funds, plus your current asset
allocation, whenever your need them. Scudder's site also
provides news about Scudder funds, retirement planning
information, and more.
25
<PAGE>
- --------------------------------------------------------------------------------
1-800-SCUDDER www.scudder.com
Retirees and Automatic Withdrawal Plan
those who depend
on investment You designate the bank account, determine the schedule (as
proceeds for frequently as once a month) and amount of the redemptions,
living expenses and Scudder does the rest.
can enjoy these
convenient, Distributions Direct
timely, and
reliable Automatically deposits your fund distributions into the
automated bank account you designate within three business days after
withdrawal each distribution is paid.
programs
QuickSell
Provides speedy access to your money by electronically
crediting your redemption proceeds to the bank account you
previously designated.
For more Call a Scudder representative at
information about 1-800-SCUDDER
these services
Or visit our Web site at
www.scudder.com
Please address The Scudder Funds
all written PO Box 2291
correspondence Boston, Massachusetts
to 02107-2291
26
<PAGE>
Notes
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc. is one of the largest and most experienced
investment management organizations worldwide, managing more than $290 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded over 80
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Financial Services Group. As a result, Zurich's subsidiary, Zurich
Kemper Investments, Inc., with 50 years of mutual fund and investment management
experience, was combined with Scudder. Headquartered in New York, Scudder Kemper
Investments offers a full range of investment counsel and asset management
capabilities, based on a combination of proprietary research and disciplined,
long-term investment strategies. With its global investment resources and
perspective, the firm seeks opportunities in markets throughout the world to
meet the needs of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Financial Services Group. The Zurich Financial Services Group is
an internationally recognized leader in financial services, including
property/casualty and life insurance, reinsurance, and asset management.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SMMM-3
RT0231199
[SCUDDER LOGO]
PO Box 2291
Boston, MA 02107-2291
1-800-SCUDDER
www.scudder.com
A member of the [LOGO] Zurich Financial Services Group
