[LOGO] SCUDDER
INVESTMENTS (SM)
Scudder
Institutional Shares:
Scudder Money
Market Series
Fund #403
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.
<PAGE>
Scudder
Institutional Shares
Scudder Money Market Series
Scudder Institutional Funds Client Services
222 South Riverside Plaza, 33rd Floor
Chicago, Illinois 60606-5808
Telephone: 800 537 3177
E-mail: [email protected]
Web site: http://institutionalfunds.scudder.com
Investment Manager
Scudder Kemper Investments, Inc.
Distributor
Kemper Distributors, Inc.
Custodian
State Street Bank and Trust Company
Fund Accounting Agent
Scudder Fund Accounting Corporation
Transfer Agent and
Dividend Disbursing Agent
Scudder Service Corporation
Legal Counsel
Dechert Price & Rhoads
For more information, call or write the Distributor at the address above.
-----------------
Scudder Institutional Shares are not insured or guaranteed by the U.S.
Government. The fund seeks to maintain a constant net asset value of $1.00 per
share, but there can be no assurance that the stable net asset value will be
maintained.
This report is for the information of the shareholders. Its use in connection
with any offering of the fund's shares is authorized only in case of a
concurrent or prior delivery of the fund's current prospectus.
2
<PAGE>
Contents
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4 Letter from the Fund's Portfolio Manager
6 Investment Portfolio
10 Financial Statements
14 Financial Highlights
15 Notes to Financial Statements
19 Officers and Directors
3
<PAGE>
Letter from the Fund's Portfolio Manager
- --------------------------------------------------------------------------------
Dear Shareholders,
Over the past six months the U.S. economy continued to grow, as low inflation
and strong employment figures boosted consumer confidence. The Federal Reserve
Board of Governors (the Fed) continued to take measures to tighten monetary
conditions. This was due to continuing concerns the economy was growing at too
rapid a pace and inflation would start emerging because of tight labor markets.
Meanwhile, a number of foreign economies continued to rebound, especially Japan
and Europe. These factors translated into increased worldwide growth and capital
demand, and helped build the expectation that U.S. Gross Domestic Product should
remain strong with at least 4% growth. As a result, the Fed seemed content with
its present level of monetary restraint for the remainder of 1999 in order to
facilitate orderly, functioning financial markets. We anticipate a relatively
good pace of economic growth continuing early in 2000.
Considering this information, we plan to take a relatively defensive approach to
Scudder Money Market Series' average maturity, although we will look for
attractive opportunities to extend maturities, and enhance performance.
The fund's management is dedicated to achieving its objective. Given the
conditions stated above and our strategy, Scudder Money Market Series offers a
high degree of stability, and should continue to be an excellent place for you
to invest your money. The Scudder Government and Tax Free Money Market Series
are expected to close in January, 2000.
4
<PAGE>
Thank you again for your investment in Scudder Money Market Series. We look
forward to serving your investment needs for years to come.
Sincerely,
/s/Frank J. Rachwalski
Frank J. Rachwalski
Vice President and Lead Portfolio Manager,
Scudder Money Market Series -- Institutional Shares
Frank Rachwalski is a Managing Director of Scudder Kemper Investments, Inc. and
is Vice President and Lead Portfolio Manager of Scudder Money Market Series. Mr.
Rachwalski holds B.B.A. and M.B.A. degrees from Loyola University, Chicago.
Like all money market funds, an investment in this fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the fund seeks to preserve your investment at $1.00 per share,
it is possible to lose money.
The views expressed in this report reflect those of the portfolio manager only
for the six-month period ending November 30, 1999. The manager's views are
subject to change at any time, based on market and other conditions.
5
<PAGE>
Investment Portfolio as of November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal
Amount ($) Value ($)
- --------------------------------------------------------------------------------
Money Market Series
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Repurchase Agreements 1.7%
- ------------------------------------------------------------------------------------
<S> <C> <C>
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
<PAGE>
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Principal
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
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
<PAGE>
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Principal
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
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%
- ------------------------------------------------------------------------------------
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 $1,361,851,808) 1,361,851,808
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- ------------------------------------------------------------------------------------
Short-Term and Medium-Term Notes 19.6%
- ------------------------------------------------------------------------------------
American Express Centurion Bank, 5.417%, 12/15/1999* . 15,000,000 15,000,000
American Express Centurion Bank, 5.462%, 12/20/1999* . 15,000,000 15,000,000
American Express Centurion Bank, 5.562%, 12/22/1999* . 22,000,000 22,000,000
American Honda Finance Corp., 5.622%, 12/22/1999* .... 15,500,000 15,499,320
AmSouth Bank, 5.347%, 12/15/1999* .................... 20,000,000 19,997,705
Bank of Montreal, 5.80%, 12/9/1999* .................. 50,000,000 49,981,147
BankOne Corp., 6.115%, 1/5/2000* ..................... 25,000,000 24,989,679
BankOne Corp., 6.239%, 2/4/2000* ..................... 20,000,000 19,998,796
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
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Principal
Amount ($) Value ($)
- ------------------------------------------------------------------------------------
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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</TABLE>
(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
<PAGE>
Financial Statements
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities as of November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets
- ------------------------------------------------------------------------------------
<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
---------------
Total assets ...................................................... 5,747,522,220
Liabilities
- ------------------------------------------------------------------------------------
Dividends payable ................................................. 22,688,829
Accrued management fee ............................................ 878,146
Other accrued expenses and payables ............................... 300,009
---------------
Total liabilities ................................................. 23,866,984
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Net assets, at value $5,723,655,236
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Net Asset Value
- ------------------------------------------------------------------------------------
Managed Shares:
Net assets applicable to shares outstanding ....................... $ 388,325,124
Shares outstanding of capital stock, $.001 par value, 800,000,000,
500,000,000, and 1,500,000,000 shares authorized, respectively .. 388,325,124
Net Asset Value, offering and redemption price per share (net ---------------
assets / shares outstanding) .................................... $ 1.00
---------------
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
---------------
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
---------------
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 shares authorized ................................. 49,519,421
Net Asset Value, offering and redemption price per share (net ---------------
assets / shares outstanding) .................................... $ 1.00
---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
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- --------------------------------------------------------------------------------
Statement of Operations for the six months ended November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investment Income
- ------------------------------------------------------------------------------------
<S> <C>
Interest .......................................................... $ 110,461,974
---------------
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
---------------
Total expenses, before expense reductions ......................... 6,259,145
Expense reductions ................................................ (2,900,715)
---------------
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
- ------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
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- --------------------------------------------------------------------------------
Statements of Changes in Net Assets -- Money Market Series
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
- --------------------------------------------------------------------------------
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
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Six Months
Ended November Five Months Year Ended
30, 1999 Ended May 31, December 31,
(Unaudited) 1999 1998
- -----------------------------------------------------
$ 107,103,544 $ 59,023,051 $ 88,278,881
- --------------- --------------- ------------------
(9,980,703) (7,380,665) (18,908,573)
- --------------- --------------- ------------------
(70,041,806) (33,615,524) (38,347,244)
- --------------- --------------- ------------------
(25,981,816) (17,567,663) (30,962,225)
- --------------- --------------- ------------------
(1,099,219) (459,199) (60,839)
- --------------- --------------- ------------------
527,962,270 673,318,688 1,521,267,560
2,138,664 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
- --------------------------------------------------------------------------------
The following table includes selected data for a share of the Institutional
Shares class outstanding throughout each period and other performance
information derived from the financial statements.
Institutional Shares
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1999(a) 1999(b) 1998(c) 1997(d)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000
-----------------------------------
- ------------------------------------------------------------------------------------
Net investment income .026 .020 .054 .022
- ------------------------------------------------------------------------------------
Distributions from net investment income (.026) (.020) (.054) (.022)
- ------------------------------------------------------------------------------------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000
-----------------------------------
- ------------------------------------------------------------------------------------
Total return (%) (e) 2.65** 2.03** 5.52 2.25**
- ------------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
- ------------------------------------------------------------------------------------
Net assets, end of period ($ 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*
- ------------------------------------------------------------------------------------
</TABLE>
(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
14
<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
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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
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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
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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.
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Officers and Directors
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Board of Directors
Kathryn L. Quirk* Chairperson, President and Assistant Secretary
Dr. Rosita P. Chang^(2)^(3) Professor of Finance, University of Rhode
Island
Edgar R. Fiedler^(1)^(2)^(3)^(4) Senior Fellow and Economic Counsellor,
The Conference Board, Inc.
Peter B. Freeman^(1)^ (2)^(3)^(4) Corporate Director and Trustee
Dr. J.D. Hammond^(2)^(3) Dean, Smeal College of Business Administration
Richard M. Hunt^(2)^(3) University Marshal and Senior Lecturer,
Harvard University
^(1) Member of Executive Committee
^(2) Member of Nominating Committee
^(3) Member of Audit Committee
^(4) Member of Valuation Committee
- --------------------------------------------------------------------------------
Officers
Ann M. McCreary* Vice President
Frank J. Rachwalski, Jr.* Vice President
John Millette* Vice President and Secretary
John R. Hebble* Treasurer
Caroline Pearson* Assistant Secretary
*Scudder Kemper Investments, Inc.
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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.
[LOGO] SCUDDER
INVESTMENTS (SM)
222 South Riverside Plaza, 33rd Floor
Chicago, IL 60606-5808
Tel: 800 537 3177
E-mail: [email protected]
Web: http://institutionalfunds.scudder.com
A member of the [LOGO] Zurich Financial Services Group
