[Image] Scudder Limited Term Tax Free Fund Profile [Image]
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The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
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Fund Profile
November 1, 1997
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1. What Is The Fund's Objective?
Scudder Limited Term Tax Free Fund seeks to provide as high a level of
income exempt from regular federal income tax as is consistent with a
high degree of principal stability.
2. What Does The Fund Invest In?
At least 80% of the Fund's total assets, and normally 100% of its
portfolio assets, will be invested in municipal securities, the
interest on which is exempt from regular federal income tax. The Fund
invests in shorter-term, municipal debt securities with a
dollar-weighted average effective maturity of between one and five
years. The Fund may not purchase individual securities with effective
maturities greater than 10 years at the time of purchase or issuance,
whichever is later.
Normally, the Fund invests at least 65% of its net assets in municipal
securities which are rated within the three highest quality rating
categories of Moody's Investors Service, Inc. (Aaa, Aa and A),
Standard & Poor's or Fitch Investors Service, Inc. (AAA, AA and A) or
their equivalents, or if unrated, judged by the the Fund's investment
adviser, Scudder, Stevens & Clark, Inc. to be of comparable quality at
the time of purchase. The Fund will not invest in any debt security
rated lower than Baa by Moody's, BBB by S&P or Fitch or of equivalent
quality as determined by the adviser. The Fund may, however, invest in
a debt security so rated by one rating agency even though the security
may be rated lower by one or more of the other agencies.
The Fund may invest more than 20% of its assets in taxable securities
during periods which require a defensive position.
The Fund purchases securities that it believes are attractive and
competitive values in terms of quality, yield and the relationship of
current price to maturity value.
3. What Are The Risks Of Investing In The Fund?
The Fund's share price and yield may fluctuate daily in response to
changing bond market conditions. In addition, changes in fiscal and
monetary policies, interest rate levels and general economic
conditions may affect the Fund's share price and yield. The Fund's
share price tends to decline as interest rates rise. You incur
principal risk when you invest because your shares, when sold, may be
worth more or less than what you paid for them.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking high tax-free
income with a high degree of price stability and:
o a secondary cash reserve,
o an alternative to a tax-free money fund, and
o are willing to accept somewhat lower yields then normally
provided by a longer-term bond fund in exchange for greater price
stability.
Depending on your tax bracket and individual situation, you may earn a
substantially higher after-tax return from this Fund than from
comparable investments whose income is subject to federal taxes.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Limited Term Tax Free Fund are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below are for the fiscal year ended October 31,
1996, during which Scudder maintained the total annualized expenses
of the Fund at not more than 0.50% for the period September 1, 1995
to April 30, 1996, and 0.75% for the period May 1, 1996 to December
31, 1997. Had Scudder not done so, expenses would have amounted to
0.82%, including 0.60% for management fees. Until December 31, 1997,
Scudder has agreed to maintain the total annualized expenses of the
fund at not more than 0.75% of average daily net assets.
Investment management fee (after waiver) 0.53%
12b-1 fees None
Other expenses (after reimbursement) 0.22%
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Total Fund operating expenses 0.75%
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Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$8 $24 $42 $93
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above remain the
same each year. This example should not be considered a representation
of past or future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than those shown.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed since it commenced
operations on February 15, 1994, assuming reinvestment of all
distributions. Performance is historical and is no guarantee of future
results. Total return and principal value will fluctuate. The Fund's
30-day net annualized SEC yield on September 30, 1997 was 3.82%.
BAR CHART TITLE: Total returns for year ended December 31:
BAR CHART DATA:
1995 1996
9.38% 3.99%
The Fund's Average Annual Total Return for the period
ended September 30, 1997
One Year Life of Fund
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6.16% 4.95%
If the adviser had not maintained the Fund's expenses, the average
annual total return for the one year and life of Fund periods would
have been lower.
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is managed by a team of Scudder
investment professionals who each play an important role in the Fund's
management process.
M. Ashton Patton, Lead Portfolio Manager, has overseen the Fund's
investment strategy and daily operations since the Fund was introduced
in 1994. Ms. Patton joined Scudder in 1986 and has been a portfolio
manager since 1990. Donald C. Carleton, Portfolio Manager, has been a
portfolio manager at Scudder since he joined the firm in 1983.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is $2,500,
except that shareholders may open an account with at least $1,000 if
an automatic investment plan of $100/month is established. Scudder
retirement plans and certain other accounts have similar or lower
minimum share balance requirements. A shareholder who maintains a
nonfiduciary account balance of less than $2,500 without establishing
an automatic investment plan, will be assessed an annual fee of
$10.00, payable to the Fund. Retirement accounts and certain other
accounts will not be assessed the $10.00 charge. You may also exchange
Fund shares free of charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by check, telephone, fax, or mail.
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. Capital gains
distributions, if any, will be made in November or December. You may
elect to receive distributions in cash or have them reinvested in
additional shares of the Fund.
Distributions of tax-exempt income are not subject to federal income
taxes, except for the possible applicability of the alternative
minimum tax. However, distributions may be subject to state and local
income taxes. A portion of the Fund's income, including income from
repurchase agreements, gains from options, and market discount bonds,
may be taxable to shareholders as ordinary income. Long-term capital
gains distributions, if any, are taxable as long-term capital gains
regardless of the length of time shareholders have owned shares.
Short-term capital gains and any other taxable income distributions
are taxable as ordinary income. Distributions of tax-exempt income are
taken into consideration in computing the portion, if any, of Social
Security and railroad retirement benefits subject to federal and, in
some cases, state taxes.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
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[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about the Fund. If you would
like more information before you invest, please consult the Fund's
accompanying prospectus. For details about the Fund's holdings or
recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.
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