Shares of Scudder New York Tax Free Money Fund are not insured or guaranteed by
the U.S. government. Scudder New York Tax Free Money 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 information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder New York
Tax Free Money Fund
- -----------------------
Scudder New York
Tax Free Fund
Semiannual Report
September 30, 1995
* For investors seeking triple-tax-free income exempt from New York City,
state, and regular federal income taxes.
* Pure no-load(TM) funds with no commissions to buy, sell, or exchange
shares.
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
SCUDDER NEW YORK TAX FREE FUND
- --------------------------------------------------------------------------------
CONTENTS
2 In Brief
3 Letter from the Funds' President
4 Scudder New York Tax Free Fund Performance Update
5 Scudder New York Tax Free Fund Portfolio Summary
6 Scudder New York Tax Free Money Fund
Portfolio Management Discussion
7 Scudder New York Tax Free Fund Portfolio Management Discussion
11 Scudder New York Tax Free Money Fund Investment Portfolio
14 Scudder New York Tax Free Money Fund
Financial Statements
17 Scudder New York Tax Free Money Fund
Financial Highlights
18 Scudder New York Tax Free Fund Investment Portfolio
23 Scudder New York Tax Free Fund Financial Statements
26 Scudder New York Tax Free Fund Financial Highlights
27 Notes to Financial Statements
33 Officers and Trustees
34 Investment Products and Services
35 How to Contact Scudder
IN BRIEF
Scudder New York Tax Free Money Fund
* Scudder New York Tax Free Money Fund offered a 7-day effective yield of
3.37% on September 30, 1995, equivalent to a 6.34% taxable yield for
investors in the top federal and state income tax brackets.
(BAR CHART TITLE) 7-Day Effective Yields on September 30, 1995
(BAR CHART DATA)
Scudder New York Tax Free Money Fund 3.37%
Taxable yield needed to equal the Fund's yield 6.34%
Scudder New York Tax Free Fund
* Scudder New York Tax Free Fund provided a 4.79% 30-day net annualized SEC
yield on September 30, 1995.
* For shareholders subject to the 46.82% maximum combined federal and state
income tax rate, the Fund's yield was equal to a 9.01% taxable yield.
(BAR CHART TITLE) 30-Day Yields on September 30, 1995
(BAR CHART DATA)
Scudder New York Tax Free Fund 4.79%
Taxable yield needed to equal the Fund's yield 9.01%
2
<PAGE>
LETTER FROM THE FUNDS' PRESIDENT
- --------------------------------------------------------------------------------
Dear Shareholders,
In our annual report dated March 31 we wondered whether we had seen the
highs in interest rates after their persistent rise in 1994. The answer turned
out to be "yes," for the most part. As the U.S. economy slowed and inflation
remained quiescent during the first quarter of 1995 and beyond, the Federal
Reserve permitted short-term interest rates to ease downward, cutting the
federal funds rate by 0.25% in July.
Throughout 1995, investors have been anticipating an economic slowdown,
but for now economic indicators are turning up, corporate profits remain
healthy, and consumers have responded to lower short-term rates by borrowing and
spending more. We believe consumers will fuel this reacceleration of U.S.
economic activity until their increasingly high debt burdens force them to
tighten their budgetary belts. The current economic expansion cycle is extremely
mature, and we expect a slowdown sometime in the second half of 1996.
What does this mean for tax-exempt fund investors? It's possible that
the pickup in economic activity could lead to some increases in interest rates
over the short term. But the economy is extremely interest-rate sensitive and
should respond quickly to any rate changes. When the economy begins to slow
down, rates also should move back down. Most importantly, the relationship
between supply and demand for municipal bonds should work in the tax-exempt
investor's favor as the supply of bonds continues to shrink, placing upward
pressure on prices.
As always, your portfolio managers will continue to focus their efforts
on fundamental research and security selection as a means of generating high
current income and attractive total returns. Please call a Scudder Investor
Relations representative if you have questions about your Fund. Page 35 provides
more information on how to contact Scudder. Thank you for choosing Scudder New
York Tax Free Funds to help meet your investment needs.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder New York Tax Free Fund
Scudder New York Tax Free Money Fund
3
<PAGE>
Scudder New York Tax Free Fund
Performance Update as of September 30, 1995
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
Scudder New York Tax Free Fund
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
9/30/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,092 10.92% 10.92%
5 Year $15,559 55.59% 9.24%
10 Year $22,503 125.03% 8.45%
Lehman Brothers Municipal Bond Index
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
9/30/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,118 11.18% 11.18%
5 Year $15,289 52.89% 8.86%
10 Year $25,121 151.21% 9.64%
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Yearly periods ended September 30
Scudder New York Tax Free Fund
Year Amount
- ----------------------
85 $10,000
86 $11,451
87 $11,391
88 $12,799
89 $13,945
90 $14,463
91 $16,618
92 $18,597
93 $21,329
94 $20,287
95 $22,503
Lehman Brothers Municipal Bond Index
Year Amount
- ----------------------
85 $10,000
86 $12,465
87 $12,530
88 $14,156
89 $15,385
90 $16,431
91 $18,598
92 $20,542
93 $23,160
94 $22,594
95 $25,121
The unmanaged Lehman Brothers Municipal Bond Index is a market
value-weighted measure of municipal bonds issued across the United
States. Index issues have a credit rating of at least Baa and a
maturity of at least two years. Index returns assume reinvestment
of dividends and, unlike Fund returns, do not reflect any fees or
expenses.
- -----------------------------------------------------------------
Returns and Per Share Information
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
Yearly periods ended September 30
- ---------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------------------
Net Asset Value... $11.01 $10.04 $10.52 $10.73 $10.36 $11.06 $11.36 $11.60 $10.10 $10.65
Income Dividends.. $ .74 $ .74 $ .73 $ .71 $ .68 $ .66 $ .64 $ .58 $ .53 $ .52
Capital Gains
and Other
Distributions..... $ .15 $ .20 $ -- $ -- $ .09 $ .13 $ .32 $ .75 $ .44 $ --
Fund Total
Return (%)........ 14.51 -.52 12.36 8.95 3.72 14.90 11.91 14.69 -4.89 10.92
Index Total
Return (%)........ 24.65 .52 12.98 8.68 6.80 13.19 10.45 12.74 -2.44 11.18
</TABLE>
Performance is historical and assumes reinvestment of all dividends and
capital gains and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased.
4
<PAGE>
Portfolio Summary as of September 30, 1995
- ---------------------------------------------------------------------------
Diversification
- ---------------------------------------------------------------------------
Water/Sewer Revenue 14%
Higher Education 13%
Other General
Obligation/Lease 12%
State Agency/Lease 11% Scudder New York Tax Free Fund
Hospital/Health 10% has a diversified portfolio,
Housing Finance with investments in over 80
Authority 10% separate issues.
Pollution Control/
Industrial Development 7%
Sales/Special Tax/
Miscellaneous 7%
Core Cities/Lease 5%
Miscellaneous Municipal 11%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Quality
- --------------------------------------------------------------------------
AAA 47%
AA 7%
A 10% Portfolio quality remains high,
BBB 31% with 47% of the Fund's assets
Not Rated 5% in AAA-rated bonds.
----
100%
====
Weighted average quality: AA
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
Effective Maturity
- --------------------------------------------------------------------------
Less than 1 year 7% The Fund is focused on bonds
1 - 5 years 8% with maturities between five and
5 - 10 years 22% 20 years (62% of the Fund's
10 - 20 years 40% portfolio), which currently offer
Greater than 20 years 23% good value and attractive yields.
----
100%
====
Weight average effective maturity: 13 years
For more complete details about the Fund's Investment Portfolio,
see page 18.
5
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
Scudder New York Tax Free Money Fund's semiannual period ended
September 30, 1995, was characterized by slightly lower interest rates and more
stability overall for the New York tax-exempt money markets. The period stood in
contrast to the Fund's 1994 fiscal year, when the Federal Reserve boosted
short-term interest rates substantially to fend off inflation.
Because we believed that the Federal Reserve's next move would be to
lower interest rates, we felt that this was an ideal time to extend the Fund's
maturity -- as of September 30, 1995, the Fund's average maturity stood at 66
days, compared with 47 days six months earlier. Our longer maturity has helped
us keep the Fund's yield almost identical to its yield six months earlier,
despite the trend toward lower rates. Scudder New York Tax Free Money Fund's
7-day effective yield was 3.37% on September 30, compared with 3.41% for the
7-day period ended March 31. For investors in the highest combined state and
federal income tax bracket, this yield equaled a 6.34% compounded taxable yield,
well above the 5.25% average for taxable money funds, according to IBC/Donoghue,
Inc., an independent firm that tracks money fund performance. The Fund provided
a total return of 1.62% for the six-months ended September 30, 1995, assuming
reinvestment of all income distributions, which totaled $0.016 during the
period.
Because the state of New York -- which is undertaking an extensive
budget overhaul -- has discontinued its longstanding practice of short-term
borrowing for cash-flow purposes, the supply of municipal securities is low in
the New York money markets. Tight supply along with persistent demand from
investors has put downward pressure on yields. While we continue to hold New
York City securities, we have enhanced our holdings with credit safeguards
because of the city's ongoing financial concerns. The result of this defensive
measure is slightly less yield than would otherwise be obtainable with
lower-quality securities. Looking ahead, we believe rates will head lower. Our
continuing objective is to maintain a stable share price while seeking a
competitive double-tax-free yield through investment in high-quality, short-term
municipal money market securities for Scudder New York Tax Free Money Fund.
Sincerely,
Your Portfolio Management Team
/s/Rebecca Wilson /s/K. Sue Cote
Rebecca Wilson K. Sue Cote
6
<PAGE>
SCUDDER NEW YORK TAX FREE FUND
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Dear Shareholders,
On September 30, 1995, Scudder New York Tax Free Fund provided a 30-day
net annualized SEC yield of 4.79%. For shareholders subject to the 39.6% maximum
federal income tax rate and the 11.96% maximum New York state income tax rate,
the Fund's yield is equivalent to a 9.01% taxable yield. During the six-month
period ended September 30, 1995, shareholders received $0.26 per share of income
exempt from both federal and New York State income taxes.
Despite wide fluctuations in New York municipal bond prices, the Fund's
share price increased $0.27 to $10.65 per share over the six-month period. The
Fund posted a positive total return of 5.18% through a combination of interest
income and share price appreciation. This return easily outpaced the average
total return of 4.26% for the 95 New York municipal funds tracked by Lipper
Analytical Services for the same period.
Congress, the Budget, and Higher Demand for Bonds
The change in political majorities in Congress last November brought
renewed optimism that the federal budget deficit would finally be addressed.
Both the Clinton administration and Congress have agreed in principle to balance
the federal budget -- their disagreement lies in the timing and in a host of
specifics. Nevertheless, this broad basis of agreement has encouraged the
financial markets to believe that the supply of debt instruments being issued by
the Federal government will tend to shrink over the next couple of years. The
move toward balancing the budget also reduces inflationary expectations. Both
factors have created a more positive environment for bond investors over the
past year.
Two Distinct Periods
During the six-month period ended September 30, we maintained Scudder
New York Tax Free Fund's average effective maturity at higher-than-average
levels and kept the Fund's cash position low to help the Fund regain ground lost
in 1994's poor bond market. So far, this strategy has worked to the Fund's
advantage.
7
<PAGE>
SCUDDER NEW YORK TAX FREE FUND
- --------------------------------------------------------------------------------
The municipal bond market experienced two distinct periods of
performance during the past six months. The first period, from April to June,
was marked by steadily rising bond prices and declining yields. A weaker U.S.
economy, due partly to the extremely weak dollar and the Mexican peso crisis of
early 1995, created the conditions for the bond market rally. U.S. Gross
Domestic Product (GDP) fell to its lowest level since the fourth quarter of 1993
during this period. As a result of the lackluster economy, the Federal Reserve
stopped raising interest rates, which had been ratcheting higher since February
1994.
During the second part of the semiannual period, which ran from July
until the end of September, the U.S. economy reaccelerated modestly while bond
prices remained largely unchanged. This period was also marked by considerable
discussion in Congress of various "flat tax" proposals, resulting in weaker
demand for municipal bonds. In our opinion, any tax proposal that becomes law
will continue to tax interest income at substantially high rates, ensuring that
municipal bonds continue to be worthwhile investments for investors in high tax
brackets.
The Fund's Four-Point Strategy
The Fund's investment strategy continues to focus on four basic
elements: (1) purchasing bonds with effective maturities of less than 20 years,
(2) purchasing noncallable bonds at yields close to those of callable bonds with
comparable maturities, (3) purchasing high-yielding callable bonds, and (4)
diversifying investments based on careful credit selection.
Bonds with effective maturities of at least five but less than 20 years
represented almost 62% of the portfolio on September 30, 1995, compared with
approximately 49% on March 31. Bonds in this maturity range currently offer good
value and provide attractive yields with less price volatility than longer-term
bonds. These bonds are also generally less sensitive to changes in interest
rates because of their shorter maturities.
While shorter-maturity bonds and noncallable bonds offer a relative
degree of price stability, they also typically yield less than longer-maturity,
callable debt instruments. In order to enhance the portfolio's overall yield, we
selectively purchased higher-coupon bonds that can be called by their issuers in
a relatively short time. Typically, these bonds provide yields three quarters to
one percentage point higher than noncallable bonds maturing on
8
<PAGE>
PORTFOLIO MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
similar call dates, a yield advantage we believe more than compensates for their
callability.
Scudder New York Tax Free Fund continues to emphasize careful credit
selection and portfolio diversification, investing in a variety of issues
including general obligation, water district, hospital, single family,
multi-family, school district, lease, and tax allocation bonds as of September
30, 1995. The Fund's average credit quality at the end of September was AA.
New York's Economy
New York State's economy continues to expand, but at a pace slower than
that of the rest of the nation. The state's unemployment rate was 6.8% in
September, compared with a national average of 5.6%. The state is still
relatively wealthy -- New York State ranked third in the nation in 1994 on a per
capita personal income basis. The state's debt is among the highest in the
country but not overly problematic, in our view, given the state's wealth.
Governor Pataki's budget for fiscal year 1996 reflects his campaign promises of
lower taxes and less state spending. For the first time in fifty years, General
Fund disbursements will decline from the previous year, and maximum income tax
rates are scheduled to decline in each of the next three years. To avoid
financial shortfalls in the future, the state will have to perform a difficult
and painful task: reduce spending on social programs by as much as is outlined
in the budget.
Our Near-Term Outlook
Led by consumers, the U.S. economy picked up steam in the third quarter
of 1995, growing at a 4.2% rate. Auto sales, consumer spending, and employment
have all improved. However, we are concerned about consumers' staying power,
since borrowing appears to be the major source of funds for this spending
increase. We believe the U.S. economy will slow sometime in late 1996 as
consumers spend less and as businesses make anticipated cuts in capital
expenditures. Meanwhile, inflation remains in check (for the 12 months ended
August 31, 1995, consumer prices rose only 2.6%). We are hopeful that this
combination of economic slowdown and low inflation, which historically has been
beneficial for the bond markets, will set the stage for an attractive long-term
environment.
9
<PAGE>
SCUDDER NEW YORK TAX FREE FUND
- --------------------------------------------------------------------------------
In the short term, as investors recognize the high after-tax value of
municipals, we expect tax-free bonds to make some gains. As we pursue Scudder
New York Tax Free Fund's objectives, we expect to continue emphasizing
noncallable bonds with effective maturities between five and 20 years. As
always, we will pay close attention to credit quality as we position the Fund to
seek high tax-free income and a competitive total return.
Sincerely,
Your Portfolio Management Team
/s/Jeremy L. Ragus /s/Donald C. Carleton
Jeremy L. Ragus Donald C. Carleton
10
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEW YORK TAX FREE MONEY FUND
INVESTMENT PORTFOLIO AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
---------------
Principal Credit Value ($)
Amount ($) Rating (b) (Note A)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
100.0% MUNICIPAL INVESTMENTS
NEW YORK Copaigue Union Free School District, Suffolk County,
NY, Tax Anticipation Notes, 4.5%, 6/28/96 . . . . . . . 1,000,000 MIG1 1,003,575
Erie County, NY, Water Authority, Waterworks
System Revenue, Weekly Demand Bonds,
4.15%, 12/1/16 (c)* . . . . . . . . . . . . . . . . . . 2,000,000 A1+ 2,000,000
Glen Cove, NY, General Obligation Bonds, Series A,
6.75%, 6/15/96 (c). . . . . . . . . . . . . . . . . . . 255,000 AAA 259,829
Hastings-On-Hudson Union Free School District,
Westchester County, NY, Tax Anticipation Notes,
3.875%, 10/27/95. . . . . . . . . . . . . . . . . . . . 1,000,000 SS&C 1,000,191
Hempstead Union Free School District, Nassau
County, NY, Tax Anticipation Notes, 4.5%, 6/28/96 . . . 1,000,000 SS&C 1,004,277
Islip, NY, Bond Anticipation Notes, 4.25%, 7/26/96 . . . 1,000,000 SS&C 1,002,744
Levittown, NY, Union Free School District, Tax
Anticipation Notes, 4.5%, 6/26/96 . . . . . . . . . . . 925,000 SS&C 928,921
Longwood, NY, Central School District at Middle Island,
Tax Anticipation Notes, 4.5%, 6/26/96 . . . . . . . . . 1,000,000 MIG1 1,003,527
Monroe County, NY, Revenue Anticipation Notes,
4.5%, 3/14/96 . . . . . . . . . . . . . . . . . . . . . 1,000,000 SS&C 1,003,336
Monroe County, NY, Industrial Development Agency,
Office Building Associates, Series 1992, Weekly
Demand Note, 4.05%, 10/1/00*. . . . . . . . . . . . . . 1,599,000 P1 1,599,000
Nassau County, NY, Bond Anticipation Notes, 4.5%,
3/15/96 . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 MIG1 1,002,667
New York City, General Obligation:
Weekly Demand Bonds, Series B, 4.35%, 8/15/24*. . . . . 1,000,000 A1+ 1,000,000
Series 1993 B, Daily Demand Note,
4.65%, 10/1/22 (c)*. . . . . . . . . . . . . . . . . . 100,000 A1+ 100,000
Series H4, Tax Exempt Commercial Paper,
3.7%, 10/19/95 (c) . . . . . . . . . . . . . . . . . . 1,000,000 A1+ 1,000,000
Series 1994 H-3, Tax Exempt Commercial Paper,
FSA Insured, 3.7%, 10/16/95. . . . . . . . . . . . . . 1,100,000 MIG1 1,100,000
New York City, Revenue Anticipation Notes:
4.5%, 4/11/96 . . . . . . . . . . . . . . . . . . . . . 1,000,000 MIG1 1,002,943
4.75%, 6/28/96. . . . . . . . . . . . . . . . . . . . . 500,000 SP1 502,840
New York State Dormitory Authority, Memorial Sloan-
Kettering Cancer Center Revenue, Series C, Tax
Exempt Commercial Paper, 3.55%, 12/13/95. . . . . . . . 750,000 MIG1 750,000
New York State Energy Research and Development
Authority, Pollution Control Revenue:
Orange & Rockland Project, Series A, Monthly
Reset Bonds, 4.1%, 10/1/14 (c)* . . . . . . . . . . . 1,000,000 MIG1 1,000,000
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Principal Credit Value ($)
Amount ($) Rating (b) (Note A)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Orange & Rockland Utilities Inc. Project, Weekly
Demand Note, 4.1%, 8/1/15 (c)*. . . . . . . . . . . . 1,000,000 MIG1 1,000,000
Niagara Mohawk Power Company, Daily Demand
Note, 5.15%, 3/1/27*. . . . . . . . . . . . . . . . . 1,000,000 P1 1,000,000
Rochester Gas and Electric Company, Monthly
Reset Bonds, 3.7%, 10/1/14* . . . . . . . . . . . . . 1,000,000 P1 1,000,000
New York State Environmental Facilities Corp.,
Solid Waste Revenue, General Electric Corp.,
Tax Exempt Commercial Paper:
3.15%, 10/16/95. . . . . . . . . . . . . . . . . . . . 1,000,000 A1+ 1,000,000
Series 1987 A, 3.15%, 10/27/95 . . . . . . . . . . . . 1,000,000 A1+ 1,000,000
New York State, General Obligation, Bond
Anticipation Notes, Tax Exempt Commercial Paper:
Series P, 3.8%, 10/2/95. . . . . . . . . . . . . . . . 800,000 P1 800,000
Series Q, 3.7%, 10/18/95 . . . . . . . . . . . . . . . 650,000 P1 650,000
New York State Housing Finance Agency:
Hospital for Special Surgery, Variable Rate
Demand Bonds, 3.9%, 11/1/10* . . . . . . . . . . . . . 2,400,000 MIG1 2,400,000
Housing Revenue Bonds, Liberty View Apartments
Project, Weekly Demand Bonds, 3.9%, 11/1/05* . . . . . 1,200,000 MIG1 1,200,000
Memorial Sloan-Kettering Cancer Center,
Housing Revenue Bonds, Variable Rate Demand
Bond, Series 1985 A, 4.15%, 11/1/15* . . . . . . . . . 2,800,000 SS&C 2,800,000
Normandie Court 1 Housing Revenue, Variable
Rate Demand Bonds, 4.15%, 5/15/15* . . . . . . . . . . 1,900,000 MIG1 1,900,000
New York State Job Development Authority, Monthly
Reset Bonds:
Series 1985 C, 3.55%, 3/1/00*. . . . . . . . . . . . . 1,100,000 MIG1 1,100,000
Series F, 3.7%, 3/1/99*. . . . . . . . . . . . . . . . 800,000 MIG1 800,000
New York State Local Government Assistance
Corporation:
Series 1993 A, Weekly Demand Note,
4.25%, 4/1/22*. . . . . . . . . . . . . . . . . . . . 1,000,000 MIG1 1,000,000
Series 1994 B, Variable Interest Rate Bonds,
4.2%, 4/1/23* . . . . . . . . . . . . . . . . . . . . 500,000 MIG1 500,000
New York State Medical Care Facilities Financing
Agency;
Children's Hospital of Buffalo, Weekly Demand
Bonds, 4.15%, 11/1/05*. . . . . . . . . . . . . . . . 1,800,000 MIG1 1,800,000
Mount Sinai Hospital, prerefunded,
8.875%, 1/15/96** . . . . . . . . . . . . . . . . . . 1,550,000 AAA 1,600,469
New York State, Tax Exempt Commercial Paper,
Series Q, 3.55%, 10/12/95 . . . . . . . . . . . . . . . 600,000 P1 600,000
North Hempstead, Nassau County, NY, Bond
Anticipation Notes, Series 1995 C, 5%, 5/30/96. . . . . 1,500,000 SS&C 1,508,590
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------
Principal Credit Value ($)
Amount ($) Rating (b) (Note A)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
North Hempstead, NY, Solid Waste Management
Revenue Refunding, Series 1993 A, Weekly
Demand Note, 4%, 2/1/12*. . . . . . . . . . . . . . . . 700,000 MIG1 700,000
Port Authority of New York and New Jersey,
Tax Exempt Commercial Paper, Series B:
3.45%, 11/7/95. . . . . . . . . . . . . . . . . . . . . 1,995,000 A1+ 1,995,000
3.75%, 11/6/95. . . . . . . . . . . . . . . . . . . . . 1,000,000 A1+ 1,000,000
Rockland County, NY:
Revenue Anticipation Notes, 5%, 5/17/96 . . . . . . . . 795,000 SS&C 799,651
Sewer Bond Anticipation Notes, 5.5%, 3/8/96 . . . . . . 1,500,000 SS&C 1,505,876
Seneca County, NY, Industrial Development Agency,
1991 Civic Facility, New York Chiropractic College,
Weekly Demand Bond, 4.2%, 10/1/21*. . . . . . . . . . . 500,000 A1+ 500,000
Suffolk County, NY, General Obligation,
5.5%, 10/1/95 (c) . . . . . . . . . . . . . . . . . . . 450,000 AAA 450,000
Triborough Bridge and Tunnel Authority, NY, Special
Obligation, Variable Rate Demand Bonds,
4.05%, 1/1/24 (c)*. . . . . . . . . . . . . . . . . . . 2,400,000 MIG1 2,400,000
Trust for the Cultural Resources of the City of New York:
Museum of Natural History, Weekly Demand Notes:
4.1%, 4/1/21 (c)*. . . . . . . . . . . . . . . . . . . 1,600,000 MIG1 1,600,000
Series 1993 A, 4.1%, 4/1/21* . . . . . . . . . . . . . 500,000 MIG1 500,000
The Solomon R. Guggenheim Foundation,
Daily Demand Note, 4.85%, 12/1/15* . . . . . . . . . . 1,100,000 A1+ 1,100,000
Westchester County, NY, General Obligation, 6.7%,
2/1/96. . . . . . . . . . . . . . . . . . . . . . . . . 500,000 AAA 504,894
Total Investment Portfolio - 100.0% ----------
(Cost $54,978,330) (a). . . . . . . . . . . . . . . . . 54,978,330
----------
----------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $54,978,330.
(b) All of the securities held have been determined to be of appropriate credit
quality as required by the Fund's investment objectives. Credit ratings
shown are assigned by either Standard & Poor's Ratings Group, Moody's
Investors Service, Inc. or Fitch Investors Service, Inc. Securities rated
by Scudder (SS&C) have been determined to be of comparable quality to rated
eligible securities.
(c) Bond is insured by one of these companies: AMBAC, FGIC or MBIA.
* Floating rate and monthly, weekly, or daily demand notes are securities
whose yields vary with a designated market index or market rate, such as
the coupon-equivalent of the Treasury bill rate. Variable rate demand notes
are securities whose yields are periodically reset at levels that are
generally comparable to tax-exempt commercial paper. These securities are
payable on demand within seven calendar days and normally incorporate an
irrevocable letter of credit from a major bank. These notes are carried,
for purposes of calculating average weighted maturity, at the longer of the
period remaining until the next rate change or to the extent of the demand
period.
** Prerefunded: Bonds which are prerefunded are collateralized by U.S.
Treasury securities which are held in escrow and are used to pay principal
and interest on the tax-exempt issue and to retire the bonds in full at the
earliest refunding date.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 (UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at value (identified cost $54,978,330)
(Note A). . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54,978,330
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,005
Receivables:
Investments sold. . . . . . . . . . . . . . . . . . . . . . . 125,000
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 372,341
Fund shares sold. . . . . . . . . . . . . . . . . . . . . . . 41,086
------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . 55,524,762
LIABILITIES
Payables:
Investments purchased . . . . . . . . . . . . . . . . . . . . $ 502,840
Fund shares redeemed. . . . . . . . . . . . . . . . . . . . . 120,755
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . 18,991
Accrued management fee (Note C) . . . . . . . . . . . . . . . 10,443
Other accrued expenses (Note C) . . . . . . . . . . . . . . . 33,803
---------
Total liabilities. . . . . . . . . . . . . . . . . . . . . 686,832
------------
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . $ 54,837,930
------------
------------
NET ASSETS
Net assets consist of:
Accumulated net realized loss . . . . . . . . . . . . . . . . $ (16,545)
Shares of beneficial interest . . . . . . . . . . . . . . . . 548,422
Additional paid-in capital. . . . . . . . . . . . . . . . . . 54,306,053
------------
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . $ 54,837,930
------------
------------
NET ASSET VALUE, offering and redemption price per share
($54,837,930 DIVIDED BY 54,842,182 outstanding shares of
beneficial interest, $.01 par value, unlimited number
of shares authorized) . . . . . . . . . . . . . . . . . . . . $1.00
-----
-----
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
14
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,052,949
Expenses:
Management fee (Note C). . . . . . . . . . . . . . . . . . . . . . . . $ 63,292
Services to shareholders (Note C). . . . . . . . . . . . . . . . . . . 39,963
Custodian and accounting fees (Note C) . . . . . . . . . . . . . . . . 25,484
Trustees' fees (Note C). . . . . . . . . . . . . . . . . . . . . . . . 7,697
Auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,511
State registration . . . . . . . . . . . . . . . . . . . . . . . . . . 4,798
Reports to shareholders. . . . . . . . . . . . . . . . . . . . . . . . 4,787
Legal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,506
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,942 164,980
-------------------------
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . 887,969
NET REALIZED LOSS ON INVESTMENTS
Net realized loss from investment transactions . . . . . . . . . . . . (3,892)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . $ 884,077
---------
---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEW YORK TAX FREE MONEY FUND
- ----------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
SEPTEMBER 30 YEAR ENDED
1995 MARCH 31
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1995
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income. . . . . . . . . . . . . . . . . . . . . $ 887,969 $ 1,327,739
Net realized loss from investment
transactions. . . . . . . . . . . . . . . . . . . . . . . . (3,892) (6,662)
------------ ------------
Net increase in net assets resulting from
operations. . . . . . . . . . . . . . . . . . . . . . . . . 884,077 1,321,077
------------ ------------
Distributions to shareholders from net investment
income ($.016 and $.025 per share,
respectively) . . . . . . . . . . . . . . . . . . . . . . . (887,969) (1,327,739)
------------ ------------
Fund share transactions at net asset value of
$1.00 per share:
Shares sold. . . . . . . . . . . . . . . . . . . . . . . . . . 28,911,297 66,783,648
Net asset value of shares issued to
shareholders in reinvestment of
distributions . . . . . . . . . . . . . . . . . . . . . . . 764,706 1,176,765
Shares redeemed. . . . . . . . . . . . . . . . . . . . . . . . (29,783,877) (60,149,789)
------------ ------------
Net increase (decrease) in net assets
from Fund share transactions. . . . . . . . . . . . . . . . (107,874) 7,810,624
------------ ------------
INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . . . . . . . (111,766) 7,803,962
Net assets at beginning of period. . . . . . . . . . . . . . . 54,949,696 47,145,734
------------ ------------
NET ASSETS AT END OF PERIOD. . . . . . . . . . . . . . . . . . $ 54,837,930 $ 54,949,696
------------ ------------
------------ ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS.
FOR THE PERIOD
SIX MONTHS MAY 28, 1987
ENDED (COMMENCEMENT
SEPTEMBER 30, YEARS ENDED MARCH 31, OF OPERATIONS)
1995 ------------------------------------------------------------- TO MARCH 31,
(UNAUDITED) 1995 1994 1993 1992 1991 1990 1989 1988
--------- ------------------------------------------------------------- -----------
<S> <C> <C> <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 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income (a). . . . .016 .025 .017 .022 .035 .046 .052 .047 .033
Distributions from net
investment income. . . . . . . (.016) (.025) (.017) (.022) (.035) (.046) (.052) (.047) (.033)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period . $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN (%) (b) . . . . . . 1.62** 2.57 1.75 2.22 3.55 4.69 5.33 4.78 3.33**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
($ millions) . . . . . . . . . 55 55 47 40 36 40 36 41 30
Ratio of operating expenses,
net to average daily net
assets (%) (a) . . . . . . . . .60* .60 .60 .60 .60 .60 .60 .53 .50*
Ratio of net investment income
to average daily net
assets (%) . . . . . . . . . . 3.23* 2.56 1.73 2.19 3.46 4.57 5.21 4.76 4.08*
(a) Reflects a per share amount
of expenses, exclusive of
management fees,
reimbursed by the
Adviser of . . . . . . . . . $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ .002
Reflects a per share amount
of management fee not
imposed by the Adviser of. . $ .001 $ .003 $ .004 $ .004 $ .004 $ .004 $ .004 $ .004 $ .004
Operating expense ratio
including expenses
reimbursed, management
fee and other expenses
not imposed (%). . . . . . . .87* .89 .97 .97 1.01 1.08 1.08 .98 1.19*
(b) Total returns are higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
17
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEW YORK TAX FREE FUND
INVESTMENT PORTFOLIO as of September 30, 1995 (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
Principal Credit Market
Amount ($) Rating (c) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.4% SHORT-TERM MUNICIPAL INVESTMENTS
NEW YORK New York State Energy Research and Development
Authority, Pollution Control Revenue, Niagara
Mohawk Power Company, Daily Demand Note,
5.15%, 3/1/27* . . . . . . . . . . . . . . . . . . . . 1,200,000 P1 1,200,000
New York State Job Development Authority,
Special Purpose:
Series A1-13, Daily Demand Note,
Subject To AMT, 4.85%, 3/1/02* . . . . . . . . . . 400,000 MIG1 400,000
Series A1-42, Daily Demand Note,
Subject To AMT, 4.85%, 3/1/05* . . . . . . . . . . 1,300,000 MIG1 1,300,000
Series B1-9, Daily Demand Note,
Subject to AMT, 4.85%, 3/1/02* . . . . . . . . . . 1,900,000 MIG1 1,900,000
Series B1-21, Daily Demand Note,
Subject to AMT, 4.85%, 3/1/05* . . . . . . . . . . 1,500,000 MIG1 1,500,000
-------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(Cost $6,300,000). . . . . . . . . . . . . . . . . . . 6,300,000
-------------
96.6% LONG-TERM MUNICIPAL INVESTMENTS
NEW YORK 34th Street Partnership Inc., NY, Capital
Improvement, 5.5%, 1/1/14. . . . . . . . . . . . . . . 1,900,000 A 1,781,264
Albany, NY, General Obligation, 7%, 1/15/08 (d). . . . . 485,000 AAA 540,843
Battery Park City Authority, NY, Revenue Refunding,
Series A, 5%, 11/1/13. . . . . . . . . . . . . . . . . 1,850,000 AA 1,647,388
Battery Park City Project, NY, Housing Corporation,
Senior Revenue Refunding, 5.2%, 11/1/06. . . . . . . . 4,505,000 AA 4,415,621
Chautauqua County, NY:
7.3%, 4/1/08 (d) . . . . . . . . . . . . . . . . . . . 575,000 AAA 688,528
7.3%, 4/1/09 (d) . . . . . . . . . . . . . . . . . . . 575,000 AAA 687,390
Development Authority of The North Country, NY,
Solid Waste Management Authority, Series A:
5.75%, 7/1/96. . . . . . . . . . . . . . . . . . . . 690,000 BBB 687,654
6%, 7/1/97 . . . . . . . . . . . . . . . . . . . . . 390,000 BBB 390,917
6.15%, 7/1/98. . . . . . . . . . . . . . . . . . . . 980,000 BBB 989,486
Erie County, NY, General Obligation, Series A:
5.5%, 6/15/25 (d). . . . . . . . . . . . . . . . . . . 500,000 AAA 477,460
5.625%, 6/15/20 (d). . . . . . . . . . . . . . . . . . 1,000,000 AAA 975,780
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------
Principal Credit Market
Amount ($) Rating (c) Value($)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Inverse Variable Rate Certificate Trust, Metropolitan
Transit Authority, Series 1993 B,
5.467%, 6/30/02 (d)**. . . . . . . . . . . . . . . . . 8,000,000 NR 8,320,000
Metropolitan Transportation Authority, NY, Service
Contract, Transit Facilities, Series 7, 5.4%, 7/1/06 . 2,000,000 BBB 1,963,840
Monroe County, NY, Airport Authority, Greater
Rochester International Airport, Subject to AMT,
5.375%, 1/1/19 (d) . . . . . . . . . . . . . . . . . . 6,550,000 AAA 6,047,222
Nassau County Industrial Development Agency, NY,
Adelphi University, 5.5%, 6/1/03 . . . . . . . . . . . 1,000,000 A 1,005,500
Nassau County, NY, Combined Sewer District,
Refunding, 5.1%, 7/1/05 (d). . . . . . . . . . . . . . 2,850,000 AAA 2,897,937
New York City, NY, General Obligation:
Series B, 7.5%, 2/1/05 . . . . . . . . . . . . . . . . 2,500,000 A 2,783,750
Series B, 8.25%, 6/1/06. . . . . . . . . . . . . . . . 2,750,000 BBB 3,262,023
Series B, 6.2%, 8/15/06. . . . . . . . . . . . . . . . 500,000 BBB 511,060
Series B, 7.25%, 8/15/07 . . . . . . . . . . . . . . . 2,250,000 BBB 2,480,198
Series E, 8%, 8/1/05 (d) . . . . . . . . . . . . . . . 330,000 AAA 405,874
Series F, 8.25%, 11/15/16. . . . . . . . . . . . . . . 200,000 BBB 227,726
New York City, NY, Industrial Development Agency:
Civil Facilities, USTA National Tennis Center,
FSA Insured:
6.1%, 11/15/04 . . . . . . . . . . . . . . . . . . 1,215,000 AAA 1,315,590
6.25%, 11/15/06. . . . . . . . . . . . . . . . . . 3,000,000 AAA 3,281,130
Special Facility, Terminal One Group,
Subject to AMT, 6%:
1/1/15 . . . . . . . . . . . . . . . . . . . . . . 190,000 A 183,874
1/1/19 . . . . . . . . . . . . . . . . . . . . . . 2,480,000 A 2,377,824
New York City , NY, Municipal Water Finance
Authority, Water and Sewer System Revenue:
Series A, 7%, 6/15/09. . . . . . . . . . . . . . . . 1,735,000 A 1,903,954
Series B, 5.375%, 6/15/19 (d). . . . . . . . . . . . 1,000,000 AAA 934,530
Series B, 5.5%, 6/15/19 (d). . . . . . . . . . . . . 8,970,000 AAA 8,524,998
New York State, City University, John Jay College,
7.25%, 8/15/07 . . . . . . . . . . . . . . . . . . . . 1,000,000 BBB 1,037,010
New York State Dormitory Authority Revenue:
City University Revenue:
Series A, 9.25%, 7/1/00. . . . . . . . . . . . . . . 2,000,000 BBB 2,352,760
Consolidated Revenue, Series A, 5.75%, 7/1/09. . . . 3,750,000 BBB 3,686,663
Series B, 8.125%, 7/1/08 . . . . . . . . . . . . . . 1,200,000 BBB 1,335,288
Series D, 8.2%, 7/1/12 . . . . . . . . . . . . . . . 2,000,000 BBB 2,229,320
Columbia University, 5%, 7/1/15. . . . . . . . . . . . 2,500,000 AAA 2,258,200
Crouse Irving Memorial Hospital, Insured Mortgage
Revenue, HIBI Insured, 10.5%, 7/1/17 (b) . . . . . . 2,600,000 A 2,652,806
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
19
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEW YORK TAX FREE FUND
- -----------------------------------------------------------------------------------------------------------------------------
Principal Credit Market
Amount ($) Rating (c) Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Department of Health, 5.5%, 7/1/06 . . . . . . . . . . 2,295,000 BBB 2,249,215
Mt. Sinai School of Medicine, Series B,
5.7%, 7/1/11 (d) . . . . . . . . . . . . . . . . . . 1,825,000 AAA 1,857,138
New Hope Community, Inc., 5.7%, 7/1/17 . . . . . . . . 1,500,000 AA 1,433,280
New Rochelle Hospital Medical Center Project,
GNMA Collateralized, 10%, 1/1/10 . . . . . . . . . . 970,000 AAA 977,324
New York College and University Lease, Pooled
Capital Program, 7.8%, 12/1/05 (d) . . . . . . . . . 3,970,000 AAA 4,321,861
State University Educational Facility, Series A:
7.125%, 5/15/09. . . . . . . . . . . . . . . . . . . 500,000 BBB 556,760
5.875%, 5/15/11. . . . . . . . . . . . . . . . . . . 2,250,000 BBB 2,203,695
The Wartburg Home of the Evangelical Lutheran
Church, FHA Insured, 5.7%, 2/1/13. . . . . . . . . . 2,250,000 AA 2,196,585
New York State Energy Research & Development
Authority, Consolidated Edison Company,
Series B, 5.25%, 8/15/20 (d) . . . . . . . . . . . . 4,250,000 AAA 3,876,213
New York State Environmental Facilities Corporation:
Pollution Control Revenue, Revolving Water Fund,
Series D, 6.9%, 5/15/15. . . . . . . . . . . . . . . 2,465,000 AAA 2,730,481
Spring Valley Water Company, Subject to AMT,
5.65%, 11/1/23 (d) . . . . . . . . . . . . . . . . . 1,000,000 AAA 955,290
New York State, General Obligation:
7.5%, 11/15/01 (d) . . . . . . . . . . . . . . . . . . 2,200,000 AAA 2,547,314
7%, 11/15/02 (d) . . . . . . . . . . . . . . . . . . . 2,555,000 AAA 2,918,832
New York State Housing Finance Agency,
Service Contract, Series F:
5.25%, 9/15/06 . . . . . . . . . . . . . . . . . . . 1,500,000 BBB 1,444,305
5.625%, 3/15/09. . . . . . . . . . . . . . . . . . . 5,750,000 BBB 5,593,888
New York State, Local Government Assistance
Corporation:
Series B, 5.375%, 4/1/16 . . . . . . . . . . . . . . 1,830,000 A 1,698,094
Series C, 5.5%, 4/1/18 . . . . . . . . . . . . . . . 1,125,000 A 1,050,761
Series D, 5%, 4/1/23 . . . . . . . . . . . . . . . . 6,250,000 A 5,390,688
New York State Medical Care Facilities Finance
Agency:
Mental Health Center:
Series A, 8.25%, 2/15/99 . . . . . . . . . . . . . 3,415,000 BBB 3,683,726
Series A, 8.875%, 8/15/07. . . . . . . . . . . . . 395,000 BBB 434,603
Series F, 5.25%, 2/15/08 (d) . . . . . . . . . . . 2,000,000 AAA 1,953,640
Series F, 5.25%, 8/15/08 (d) . . . . . . . . . . . 1,000,000 AAA 976,170
Series F, 5.375%, 2/15/14 (d). . . . . . . . . . . 2,200,000 AAA 2,090,198
North Shore University, Glen Cove, Series A,
5.125%, 11/1/12 (d). . . . . . . . . . . . . . . . 1,450,000 AAA 1,343,193
St. Luke's - Roosevelt Hospital, Series A,
FHA Insured, 5.625%, 8/15/18 . . . . . . . . . . . 2,500,000 AAA 2,377,975
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
20
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------
Principal Credit Market
Amount ($) Rating (c) Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
New York State Mortgage Agency Revenue,
Homeowner Mortgage:
Series FF, 7.95%, 10/1/14. . . . . . . . . . . . . 250,000 AA 267,490
Series 48, Subject to AMT, 6.1%, 4/1/25. . . . . . 3,100,000 AA 3,005,202
New York State Power Authority, General Purpose
Revenue, Series CC, 5.125%, 1/1/11 (d) . . . . . . . . 6,500,000 AAA 6,191,835
New York State Thruway Authority:
General Revenue, Series B, 5%, 1/1/20 (d). . . . . . . 3,740,000 AAA 3,319,362
Service Contract Revenue, Local Highway and
Bridge Building:
Series A, 6.25%, 4/1/04 (d). . . . . . . . . . . . 2,000,000 AAA 2,200,540
5.125%, 4/1/07 . . . . . . . . . . . . . . . . . . 3,000,000 BBB 2,817,300
5.125%, 4/1/07 (d) . . . . . . . . . . . . . . . . 900,000 AAA 888,075
5.75%, 4/1/08. . . . . . . . . . . . . . . . . . . 1,000,000 BBB 987,720
New York State, Urban Development Corporation
Revenue:
Correctional Capital Facilities:
Series A, 5.45%, 1/1/07. . . . . . . . . . . . . . 2,000,000 BBB 1,944,100
Series A, 5.5%, 1/1/09 . . . . . . . . . . . . . . 1,000,000 BBB 961,690
Series A, 5.5%, 1/1/14 . . . . . . . . . . . . . . 3,000,000 BBB 2,781,300
5.25%, 1/1/04. . . . . . . . . . . . . . . . . . . 2,370,000 BBB 2,326,250
5.5%, 1/1/15 . . . . . . . . . . . . . . . . . . . 2,000,000 BBB 1,833,160
Onondaga County Convention Center:
6%, 1/1/06 . . . . . . . . . . . . . . . . . . . . 1,630,000 BBB 1,666,121
7.875%, 1/1/10 . . . . . . . . . . . . . . . . . . 1,000,000 BBB 1,163,410
Niagara County, NY, General Obligation,
7.1%, 2/15/11 (d). . . . . . . . . . . . . . . . . . . 500,000 AAA 579,980
Niagara Falls, NY, Water Treatment Plant,
Subject to AMT:
7%, 11/1/03 (d). . . . . . . . . . . . . . . . . . . 2,260,000 AAA 2,555,947
8.5%, 11/1/05 (d). . . . . . . . . . . . . . . . . . 2,140,000 AAA 2,708,127
8.5%, 11/1/06 (d). . . . . . . . . . . . . . . . . . 1,240,000 AAA 1,579,028
Schenectady, NY, Industrial Development Agency,
Broadway Center Project, Series A, 5%, 9/1/09 (d). . . 1,250,000 AAA 1,179,238
Shenendehowa Central School District, NY,
Clifton Park:
6.85%, 6/15/08 (d) . . . . . . . . . . . . . . . . . 350,000 AAA 405,671
6.85%, 6/15/09 (d) . . . . . . . . . . . . . . . . . 350,000 AAA 404,215
Valley Central School District, Montgomery, NY,
7.15%, 6/15/08 (d) . . . . . . . . . . . . . . . . . . 625,000 AAA 741,113
PUERTO RICO Puerto Rico Commonwealth Infrastructure Finance
Authority, Series A:
7.9%, 7/1/07 . . . . . . . . . . . . . . . . . . . . 1,000,000 BBB 1,113,890
7.75%, 7/1/08. . . . . . . . . . . . . . . . . . . . 920,000 BBB 1,021,228
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
21
</TABLE>
<PAGE>
SCUDDER NEW YORK TAX FREE FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Principal Credit Market
Amount ($) Rating (c) Value ($)
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
VIRGIN ISLANDS Virgin Islands Public Finance Authority,
General Obligation, Mortgage Fund Loan Notes,
Series A, 7%, 10/1/02. . . . . . . . . . . . . . . . . 500,000 BBB 535,615
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(Cost $172,648,587). . . . . . . . . . . . . . . . . . 179,300,244
-------------
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $178,948,587) (a). . . . . . . . . . . . . . . . 185,600,244
-------------
-------------
(a) The cost for federal income tax purposes was $179,275,572. At September 30,
1995, net unrealized appreciation for all securities based on tax cost was
$6,324,672. This consisted of aggregate gross unrealized appreciation for all
securities in which there was an excess of market value over tax cost of $6,868,937
and aggregate gross unrealized depreciation for all securities in which there
was an excess of tax cost over market value of $544,265.
(b) At September 30, 1995 these securities, in part, have been pledged to cover
initial margin requirements for open futures contracts.
AT SEPTEMBER 30, 1995 OPEN FUTURES CONTRACTS SOLD SHORT WERE AS FOLLOWS (NOTE A):
Aggregate Market
Futures Expiration Contracts Face Value ($) Value ($)
------------ --------------- ------------ ---------------- --------------
30 year U.S.
Treasury Bond Dec.1995 75 8,406,281 8,575,781
---------- ----------
Total net unrealized depreciation on open futures contracts sold short (169,500)
----------
----------
(c) All of the securities held have been determined to be of appropriate credit
quality as required by the Fund's investment objectives. Credit ratings shown
are assigned by either Standard & Poor's Ratings Group, Moody's Investors Service,
Inc. or Fitch Investors Service, Inc. Unrated securities (NR) have been determined
to be of comparable quality to rated eligible securities.
(d) Bond is insured by one of these companies: AMBAC, Capital Guaranty, FGIC or MBIA.
* Floating rate and monthly, weekly, or daily demand notes are securities whose
yields vary with a designated market index or market rate, such as the coupon-equivalent
of the Treasury bill rate. Variable rate demand notes are securities whose
yields are periodically reset at levels that are generally comparable to tax-exempt
commercial paper. These securities are payable on demand within seven calendar
days and normally incorporate an irrevocable letter of credit from a major
bank. These notes are carried, for purposes of calculating average weighted
maturity, at the longer of the period remaining until the next rate change
or to the extent of the demand period.
** Inverse floating rate notes are instruments whose yields have an inverse relationship
to benchmark interest rates. These securities are shown at their rate as of
September 30, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
22
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investments, at market (identified cost $178,948,587)
(Note A). . . . . . . . . . . . . . . . . . . . . . . . $ 185,600,244
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,270
Receivables:
Investments sold. . . . . . . . . . . . . . . . . . . . 5,940,365
Interest. . . . . . . . . . . . . . . . . . . . . . . . 3,061,394
Fund shares sold. . . . . . . . . . . . . . . . . . . . 800,878
-------------
Total assets . . . . . . . . . . . . . . . . . . . 195,438,151
LIABILITIES
Payables:
Investments purchased . . . . . . . . . . . . . . . . . $ 1,665,562
Dividends . . . . . . . . . . . . . . . . . . . . . . . 270,354
Fund shares redeemed. . . . . . . . . . . . . . . . . . 10,870
Daily variation margin on open futures contracts
(Note A) . . . . . . . . . . . . . . . . . . . . . 103,125
Accrued management fee (Note C) . . . . . . . . . . . . 99,309
Other accrued expenses (Note C) . . . . . . . . . . . . 61,624
-----------
Total liabilities. . . . . . . . . . . . . . . . . 2,210,844
-------------
Net assets, at market value. . . . . . . . . . . . . . . . . $ 193,227,307
-------------
-------------
NET ASSETS
Net assets consist of:
Unrealized appreciation (depreciation) on:
Investments. . . . . . . . . . . . . . . . . . . . $ 6,651,657
Futures. . . . . . . . . . . . . . . . . . . . . . (169,500)
Accumulated net realized loss . . . . . . . . . . . . . (10,090,456)
Shares of beneficial interest . . . . . . . . . . . . . 181,425
Additional paid-in capital. . . . . . . . . . . . . . . 196,654,181
-------------
Net assets, at market value. . . . . . . . . . . . . . . . . $ 193,227,307
-------------
-------------
NET ASSET VALUE, offering and redemption price per share
($193,227,307 DIVIDED BY 18,142,522 outstanding shares of
beneficial interest, $.01 par value, unlimited number
of shares authorized) . . . . . . . . . . . . . . . . . $10.65
------
------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEW YORK TAX FREE FUND
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED)
---------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . . . . $ 5,611,810
Expenses:
Management fee (Note C). . . . . . . . . . . $ 603,699
Services to shareholders (Note C). . . . . . 87,783
Custodian and accounting fees (Note C) . . . 47,197
Trustees' fees (Note C). . . . . . . . . . . 7,697
Auditing . . . . . . . . . . . . . . . . . . 20,389
Reports to shareholders. . . . . . . . . . . 12,699
Legal. . . . . . . . . . . . . . . . . . . . 6,079
State registration . . . . . . . . . . . . . 7,777
Other. . . . . . . . . . . . . . . . . . . . 7,284 800,604
-------------------------------
Net investment income . . . . . . . . . . . 4,811,206
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized loss from:
Investments . . . . . . . . . . . . . . (2,514,636)
Futures . . . . . . . . . . . . . . . . (185,321) (2,699,957)
-------------------------------
Net unrealized appreciation (depreciation) during
the period on:
Investments . . . . . . . . . . . . . . 7,968,543
Futures . . . . . . . . . . . . . . . . (169,500) 7,799,043
------------------------------
Net gain on investments. . . . . . . . . . . 5,099,086
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,910,292
-----------
-----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED
1995 MARCH 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1995
- ------------------------------------------------------------------------------------------
Operations:
<S> <C> <C>
Net investment income. . . . . . . . . . . . . . . . . $ 4,811,206 $ 10,299,978
Net realized loss from investment
transactions . . . . . . . . . . . . . . . . . . . . (2,699,957) (5,532,589)
Net unrealized appreciation on
investment transactions. . . . . . . . . . . . . . . 7,799,043 6,398,650
------------- -------------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . 9,910,292 11,166,039
------------- -------------
Distributions to shareholders:
From net investment income ($.26 and
$.52 per share, respectively). . . . . . . . . . . (4,811,206) (10,299,978)
------------- -------------
In excess of net realized
gains ($.05 per share) . . . . . . . . . . . . . . - (1,028,717)
------------- -------------
Fund share transactions:
Proceeds from shares sold. . . . . . . . . . . . . . . 11,155,135 34,151,916
Net asset value of shares issued to
shareholders in reinvestment
of distributions . . . . . . . . . . . . . . . . . . 3,158,792 7,668,354
Cost of shares redeemed. . . . . . . . . . . . . . . . (19,718,602) (55,402,814)
------------- -------------
Net decrease in net assets from
Fund share transactions. . . . . . . . . . . . . . . (5,404,675) (13,582,544)
------------- -------------
DECREASE IN NET ASSETS . . . . . . . . . . . . . . . . (305,589) (13,745,200)
Net assets at beginning of period. . . . . . . . . . . 193,532,896 207,278,096
------------- -------------
NET ASSETS AT END OF PERIOD. . . . . . . . . . . . . . $ 193,227,307 $ 193,532,896
------------- -------------
------------- -------------
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period. . . . . . . 18,645,871 20,085,899
------------- -------------
Shares sold. . . . . . . . . . . . . . . . . . . . . . 1,064,403 3,366,073
Shares issued to shareholders in
reinvestment of distributions. . . . . . . . . . . . 298,989 754,635
Shares redeemed. . . . . . . . . . . . . . . . . . . . (1,866,741) (5,560,736)
------------- -------------
Net decrease in Fund shares. . . . . . . . . . . . . . (503,349) (1,440,028)
------------- -------------
Shares outstanding at end of period. . . . . . . . . . 18,142,522 18,645,871
------------- -------------
------------- -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCUDDER NEW YORK TAX FREE FUND
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER
PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL STATEMENTS.
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
1995 ---------------------------------------------------------------------------------------------------
UNAUDITED) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
----------- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39 $11.43 $11.19 $10.11
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment
income . . . . . .26 .52 .54 .61 .65 .67 .69 .72 .73 .75 .75
Net realized and
unrealized gain
(loss) on investment
transactions . . .27 .11 (.35) 1.03 .50 .13 .16 .14 (.84) .39 1.08
----- ------ ------ ----- ----- ----- ----- ----- ----- ----- -----
Total from investment
operations . . . . .53 .63 .19 1.64 1.15 .80 .85 .86 (.11) 1.14 1.83
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Less distributions:
From net investment
income . . . . . (.26) (.52) (.54) (.61) (.65) (.67) (.69) (.72) (.73) (.75) (.75)
From paid-in
capital. . . . . - - - - - - (.08) - - - -
From net realized
gains. . . . . . - - (.67) (.61) (.25) - (.01) - (.20) (.15) -
In excess of net
realized gains . - (.05) (.06) - - - - - - - -
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions. (.26) (.57) (1.27) (1.22) (.90) (.67) (.78) (.72) (.93) (.90) (.75)
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value,
end of period. . . $10.65 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39 $11.43 $11.19
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN (%) . . 5.18** 6.39 1.31 15.60 11.11 7.79 8.18 8.55 (.61) 10.71 18.71
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end of
period ($ millions) 193 194 207 201 159 142 132 123 116 154 102
Ratio of operating
expenses, net to
average daily net
assets (%) . . . . .82* .82 .82 .82 .87 .91 .89 .89 .95 .88 .88
Ratio of net investment
income to average
daily net assets (%) 4.96* 5.13 4.80 5.36 5.96 6.29 6.39 6.89 7.05 6.70 7.01
Portfolio turnover
rate (%) . . . . . 81.7* 83.8 158.0 201.4 168.2 224.9 114.3 132.1 44.2 71.9 40.4
* Annualized
** Not annualized
26
</TABLE>
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
SCUDDER NEW YORK TAX FREE FUND (UNAUDITED)
- --------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Scudder New York Tax Free Money Fund ("Tax Free Money Fund"), a nondiversified
fund, and Scudder New York Tax Free Fund ("Tax Free Fund"), a diversified fund,
are two series of Scudder State Tax Free Trust (the "Trust"). The Trust,
currently consisting of six separate series, is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company. The
policies described below are followed consistently by the Funds in the
preparation of their financial statements in conformity with generally accepted
accounting principles.
SECURITY VALUATION. Tax Free Money 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 Tax Free Money Fund must adhere to certain
conditions. Under this method, which does not take into account unrealized gains
and losses on securities, an instrument is initially valued at its cost and
thereafter assumes a constant accretion/amortization to maturity of any
discount/premium.
Tax Free Fund's portfolio debt securities with remaining maturities greater
than sixty days are valued by pricing agents approved by the Officers of the
Fund, which quotations reflect broker/dealer-supplied valuations and electronic
data processing techniques. If the pricing agents are unable to provide such
quotations, the most recent bid quotation supplied by a bona fide market maker
shall be used. Short-term investments having a maturity of sixty days or less
are valued at amortized cost. All other debt securities are valued at their
fair value as determined in good faith by the Valuation Committee of the
Trustees.
FUTURES CONTRACTS. A futures contract is an agreement between a buyer or seller
and an established futures exchange or its clearinghouse in which the buyer
or seller agrees to take or make a delivery of a specific amount of an item
at a specified price on a specific date (settlement date). During the six month
period ended September 30, 1995, the Tax Free Fund purchased interest rate
futures to manage the duration of the portfolio. Additionally, during the six
month period ended September 30, 1995, the Tax Free Fund sold interest rate
futures to hedge against declines in the value of portfolio securities.
27
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
SCUDDER NEW YORK TAX FREE FUND
- --------------------------------------------------------------------------------
Upon entering into a futures contract, the Tax Free Fund is required to deposit
with a financial intermediary an amount ("initial margin") equal to a certain
percentage of the face value indicated in the futures contract. Subsequent
payments ("variation margin") are made or received by the Tax Free Fund each
day, dependent on the daily fluctuations in the value of the underlying
security, and are recorded for financial reporting purposes as unrealized gains
or losses by the Tax Free Fund. When entering into a closing transaction, the
Tax Free Fund will realize a gain or loss equal to the difference between the
value of the futures contract to sell and the futures contract to buy. Futures
contracts are valued at the most recent settlement price.
Certain risks may arise upon entering into futures contracts including the
risk that an illiquid secondary market will limit the Tax Free Fund's ability
to close out a futures contract prior to the settlement date and that a change
in the value of a futures contract may not correlate exactly with changes in
the value of the securities or currencies hedged. When utilizing futures
contracts to hedge, the Tax Free Fund gives up the opportunity to profit from
favorable price movements in the hedged positions during the term of the
contract.
AMORTIZATION AND ACCRETION. All premiums and original issue discounts are
amortized/accreted for both tax and financial reporting purposes.
FEDERAL INCOME TAXES. The Funds' policy is to comply with the requirements
of the Internal Revenue Code which are applicable to regulated investment
companies and to distribute all of their taxable and tax-exempt income to their
shareholders. Accordingly, the Funds paid no federal income taxes and no
provisions for federal income taxes were required.
At March 31, 1995, the Tax Free Money Fund had a net tax basis capital loss
carryforward of approximately $12,700 which may be applied against any realized
net taxable capital gains of each succeeding year until fully utilized or until
March 31, 2000 ($800), March 31, 2001 ($1,700), March 31, 2002 ($3,500) and
March 31, 2003 ($6,700), the respective expiration dates, whichever occurs
first.
At March 31, 1995, the Tax Free Fund had a net tax basis capital loss
carryforward of approximately $3,937,000 which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until March 31, 2003, the expiration date.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
In addition, from November 1, 1994 through March 31, 1995, the Tax Free Fund
incurred approximately $2,170,000 of net realized capital losses. As permitted
by tax regulations, the Fund intends to elect to defer these losses and treat
them as arising in the fiscal year ended March 31, 1996.
DISTRIBUTION OF INCOME AND GAINS. All of the net investment income of the Funds
is declared as dividends to shareholders of record as of the close of business
each day and is paid to shareholders monthly.
During any particular year, net realized gains from investment transactions,
in excess of available capital loss carryforwards, would be taxable to the
Funds if not distributed and, therefore, will be distributed to shareholders.
An additional distribution may be made to the extent necessary to avoid the
payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined in accordance with federal tax regulations which
may differ from generally accepted accounting principles. These differences
relate primarily to investments in futures contracts.
As a result, net investment income and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from distributions
during such period. Accordingly, the Funds may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Funds.
The Funds use the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
OTHER. Investment transactions are accounted for on a trade date basis.
Distributions of net realized gains to shareholders are recorded on the ex-
dividend date. Interest income is accrued pro rata to the earlier of the call
or maturity date.
B. PURCHASES AND SALES OF SECURITIES
- --------------------------------------------------------------------------------
During the six months ended September 30, 1995, purchases and sales of long-term
municipal securities aggregated $73,305,443 and $76,809,008, respectively, for
Tax Free Fund.
29
<PAGE>
SCUDDER NEW YORK TAX FREE MONEY FUND
SCUDDER NEW YORK TAX FREE FUND
- --------------------------------------------------------------------------------
The aggregate face value of futures contracts opened and closed during the
six months ended September 30, 1995 amounted to $140,361,230 and $131,954,949,
respectively, for Tax Free Fund.
C. RELATED PARTIES
- --------------------------------------------------------------------------------
Each Fund has entered into an Investment Advisory Agreement (each an "Agreement"
and collectively the "Agreements") with Scudder, Stevens & Clark, Inc. (the
"Adviser"), under which each Fund agrees to pay the Adviser a fee computed
and accrued daily and paid monthly. The annual rate is 0.50% of the average
daily net assets of Tax Free Money Fund and 0.625% of the first $200,000,000
of the average daily net assets, and 0.60% of such net assets in excess of
$200,000,000 for Tax Free Fund.
As manager of the assets of Tax Free Money Fund and Tax Free Fund, the Adviser
directs the investments of Tax Free Money Fund and Tax Free Fund in accordance
with the investment objectives, policies, and restrictions of each Fund. The
Adviser determines the securities, instruments, and other contracts relating
to investments to be purchased, sold or entered into by each Fund. In addition
to portfolio management services, the Adviser provides certain administrative
services in accordance with the Agreements.
The Agreements also provide that if the Funds' expenses, exclusive of taxes,
interest and certain other expenses exceed specified limits, such excess, up
to the amount of the management fee, will be paid by the Adviser. For the six
months ended September 30, 1995, the fee for Tax Free Fund pursuant to the
Agreement amounted to $603,699, which was equivalent to an annual effective
rate of .622% of the Fund's average daily net assets.
With respect to Tax Free Money Fund, the Adviser has agreed not to impose all
or a portion of its management fee until July 31, 1996 and during such period
to maintain the annualized expenses of Tax Free Money Fund at not more than
0.60% of average daily net assets. For the six months ended September 30, 1995,
the Adviser did not impose a portion of its fee amounting to $74,040, and the
portion imposed amounted to $63,292.
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Scudder Fund Accounting Corporation ("SFAC") a wholly-owned subsidiary of the
Adviser, is responsible for determining the net asset value per share and
maintaining the portfolio and general accounting records of the New York Tax
Free Money Fund and New York Tax Free Fund, respectively. For the six months
ended September 30, 1995, SFAC imposed fees amounting to $15,000 for the New
York Tax Free Money Fund. For the six months ended September 30, 1995, SFAC
imposed fees amounting to $26,290 for the New York Tax Free Fund.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend-paying and shareholder service agent for the Funds.
For the six months ended September 30, 1995, $30,714 and $63,245 were charged
by SSC to Tax Free Money Fund and Tax Free Fund, of which $5,073 and $10,447
were unpaid at September 30, 1995, respectively.
The Trust pays each Trustee not affiliated with the Adviser $12,000 annually,
allocated equally among the series of the Trust, plus specified amounts for
attended board and committee meetings. For the six months ended September 30,
1995, Trustees' fees aggregated $7,697 each for both the Tax Free Money Fund
and Tax Free Fund.
31
<PAGE>
(This page intentionally left blank.)
32
<PAGE>
OFFICERS AND TRUSTEES
- --------------------------------------------------------------------------------
David S. Lee*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General Manager, WGBH Educational Foundation
Dawn-Marie Driscoll
Trustee; Attorney and Corporate Director
Peter B. Freeman
Trustee; Corporate Director and Trustee
Dudley H. Ladd*
Trustee
Wesley W. Marple, Jr.
Trustee; Professor of Business Administration, Northeastern University
Juris Padegs*
Trustee
Daniel Pierce*
Trustee
Jean C. Tempel
Trustee; General Partner,
TL Ventures
Donald C. Carleton*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
Coleen Downs Dinneen*
Assistant Secretary
*Scudder, Stevens & Clark, Inc.
33
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PRODUCTS AND SERVICES
- -------------------------------------------------------------------------------------------------------------------
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Small Company Value Fund
Scudder Growth and Income Fund Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
-----------------------------------------------------------------------------------------------------------------
IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
-----------------------------------------------------------------------------------------------------------------
The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
-----------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
-----------------------------------------------------------------------------------------------------------------
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. +A portion of the income
from the tax-free funds may be subject to federal, state, and local taxes. *Not available in all states. +++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. #These funds, advised by Scudder, Stevens & Clark,
Inc. are traded on various stock exchanges. ++For information on Scudder Treasurers Trust,(TM) an institutional
cash management service that utilizes certain portfolios of Scudder Fund, Inc. ($100,000 minimum), call
1-800-541-7703.
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HOW TO CONTACT SCUDDER
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<C> <C>
Account Service and Information
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For existing account service and transactions
SCUDDER INVESTOR RELATIONS
1-800-225-5163
For personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund
SCUDDER AUTOMATED INFORMATION LINE (SAIL)
1-800-343-2890
Investment Information
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To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions
SCUDDER INVESTOR RELATIONS
1-800-225-2470
For establishing 401(k) and 403(b) plans
SCUDDER DEFINED CONTRIBUTION SERVICES
1-800-323-6105
Please address all correspondence to
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THE SCUDDER FUNDS
P.O. BOX 2291
BOSTON, MASSACHUSETTS
02107-2291
Or stop by a Scudder Funds Center
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Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they can
be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
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For information on Scudder For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
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Scudder Investor Relations and Scudder Funds Centers are services provided through Scudder
Investor Services, Inc., Distributor.
* Contact Scudder Investor Services, Inc., Distributor, to receive a prospectus with more complete
information, including management fees and expenses. Please read it carefully before you invest or send
money.
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Celebrating Over 75 Years of Serving Investors
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Established in 1919 by Theodore Scudder, Sidney Stevens, and
F. Haven Clark, Scudder, Stevens & Clark was the first independent investment
counsel firm in the United States. Since its birth, Scudder's pioneering spirit
and commitment to professional long-term investment management have helped shape
the investment industry. In 1928, we introduced the nation's first no-load
mutual fund. Today we offer 37 pure no load(TM) funds, including the first
international mutual fund offered to U.S. investors.
Over the years, Scudder's global investment perspective and
dedication to research and fundamental investment disciplines have helped us
become one of the largest and most respected investment managers in the world.
Though times have changed since our beginnings, we remain committed to our
long-standing principles: managing money with integrity and distinction; keeping
the interests of our clients first; providing access to investments and markets
that may not be easily available to individuals; and making investing as simple
and convenient as possible through friendly, comprehensive service.
