[Image] Scudder California 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
December 1, 1997
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1. What Is The Fund's Objective?
Scudder California Tax Free Fund seeks to provide California taxpayers
with income exempt from both California personal income tax and
regular federal income tax.
2. What Does The Fund Invest In?
The Fund invests in investment-grade municipal securities of issuers
located in California and other qualifying issuers (including Puerto
Rico, the U.S. Virgin Islands and Guam). Under normal market
conditions, the Fund expects 100% of its portfolio securities to be
California municipal securities. The Fund invests principally in
long-term (i.e., maturities more than 10 years) California municipal
bonds, which include general obligation and revenue bonds. However,
the Fund may also invest in securities with short- and intermediate-
term maturities, including municipal notes and variable ratae demand
instruments.
Normally, at least 75% of the intermediate and long-term securities
purchased by the Fund will be investment-grade: rated Aaa, Aa, A, or
Baa by Moody's Investors Service, Inc. or AAA, AA, A, or BBB by
Standard & Poor's or Fitch Investors Service, Inc., or if unrated,
judged by the Fund's investment adviser, Scudder, Stevens & Clark,
Inc. to be of equivalent quality, or securities issued or guaranteed
by the U.S. Government. The Fund may invest up to 25% of its total
assets in fixed-income securities rated as low as B by Moody's, S&P or
Fitch (i.e., "junk bonds"), or unrated securities judged by the
adviser to be of equivalent quality.
The Fund expects to invest principally in securities rated A or better
by Moody's, S&P or Fitch or if unrated, judged by the adviser to be of
equivalent quality.
The Fund may invest up to 20% of its total assets in securities
subject to the alternative minimum tax. The Fund may invest more than
25% of its assets in industrial development or other private activity
bonds.
3. What Are The Risks Of Investing In The Fund?
The Fund is more susceptible to factors adversely affecting issuers of
California municipal securities than a comparable municipal bond fund
that does not emphasize these issuers to this degree. Political
events, changes in the perceived creditworthiness of issuers and
changes in interest rates will affect the Fund's yield and share
price, which is likely to vary from day to day. In addition, the
potential for price fluctuation is generally greater the longer the
maturity of the municipal security. While the Fund invests primarily
in investment-grade bonds, the Fund is still exposed to market risk
and changes in interest rates. There is also a possibility the rating
of a security may be downgraded after it is purchased. This decrease
in rating may be the result of the inability of the state of
California or any of its local government entities to meet its
financial obligations. You incur principal risk when you invest
because your shares, when sold, may be worth more or less than what
you paid for them.
The Fund's holdings in unrated securities and securities rated below
investment-grade (i.e., "junk bonds"), carry a greater risk of default
and more price volatility than securities rated investment-grade.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking double tax-free
income -- exempt both from California personal income tax and regular
federal income tax. Depending on your tax bracket and individual
situation, you may earn a substantially higher after-tax return from
Scudder California Tax Free Fund than from comparable investments that
pay income subject to both California state personal income tax and
regular federal income tax. Before investing, you should compare the
Fund's yield to the after-tax yield you would receive from a
comparable investment paying taxable income.
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 California 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 March 31, 1997.
Investment management fee 0.62%
12b-1 fees None
Other expenses 0.16%
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Total Fund operating expenses 0.78%
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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 $25 $43 $97
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 over the past 10 years,
assuming reinvestment of all distributions. Performance is historical
and may not be indicative of future results. The Fund's 30-day SEC
yield on September 30, 1997 was 4.37%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: 1986 16.91%
1987 -1.64
1988 11.90
1989 10.36
1990 6.37
1991 12.70
1992 9.39
1993 13.81
1994 -7.27
1995 18.93
1996 3.56
The Fund's Average Annual Total Return
for the period ended September 30, 1997
One Year 9.86%
Five Years 7.34%
Ten Years 8.90%
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.
Lead Portfolio Manager Jeremy L. Ragus has had responsibility for the
Fund's day-to-day operations since he joined Scudder in 1990. Mr.
Ragus has 16 years of experience in municipal investing. Donald C.
Carleton, Portfolio Manager, has 28 years of investment management
experience and has worked on the Fund's team since he arrived at
Scudder 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 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 derived from interest on California municipal securities
are not subject to California state personal income taxes or to
regular federal income taxes, except for the possible applicability of
the federal alternative minimum tax. Interest on obligations of Puerto
Rico and other U.S. possessions may also be distributed as dividends
exempt from California state personal income taxes. Other
distributions are generally taxable to shareholders for California
state personal income tax purposes. For federal income tax purposes, a
portion of each Fund's income may be taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are
taxable as long-term capital gains for federal and California state
personal income tax purposes regardless of the length of time
shareholders have owned their 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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