Scudder Massachusetts Limited Term Tax Free Fund
Annual Report
October 31, 1996
Pure No-Load(TM) Funds
A fund designed to seek double-tax-free income, exempt from both Massachusetts
and regular federal income taxes consistent with a high degree of principal
stability.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
13 Financial Statements
16 Financial Highlights
17 Notes to Financial Statements
19 Report of Independent Accountants
20 Tax Information
21 Officers and Trustees
22 Investment Products and Services
23 How to Contact Scudder
In Brief
o As of October 31, 1996, Scudder Massachusetts Limited Term Tax Free Fund's
30-day net annualized SEC yield was 4.02%, equivalent to a 7.56% taxable yield
for Massachusetts investors subject to the 46.85% combined federal and state
income tax rate.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: 30-Day Yield
CHART PERIOD: on October 31, 1996
CHART DATA:
Massachusetts Taxable IBC/Donoghue's
Limited Term Equivalent Taxable Money
Tax Free Fund Yield Fund Average
------------- ------ ------------
4.02% 7.56% 4.82%
o For the 12 months ended October 31, 1996, Scudder Massachusetts Limited Term
Tax Free Fund posted a total return of 3.98%. This return and the Fund's
two-year average annual return of 6.01% both placed the Fund in the top one
fifth of its peers according to Lipper. See page 7 for additional information on
the Fund's rankings.
2 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Letter From the Fund's President
Dear Shareholders,
We hope you enjoy our newly redesigned shareholder report. The new format,
which is being gradually introduced for all Scudder funds, is designed to
enhance the usefulness and readability of the reports.
Let us know what you think.
We are pleased to report on Scudder Massachusetts Limited Term Tax Free
Fund's performance over its most recent fiscal year. The Fund posted a
competitive total return of 3.98% over 12 months ended October 31, and its 7.56%
tax equivalent yield for investors in the highest combined state and federal tax
brackets is significantly higher than current Massachusetts CD rates. As
portfolio managers Philip Condon and Kathleen Meany report in the portfolio
management discussion that follows, the Fund continues to pursue a conservative
investment strategy, diversifying broadly by investing in a wide variety of
Massachusetts municipal bonds. Please read the discussion beginning on page 6
for more information.
We would like to take this opportunity to highlight some additions made
this fall to the Scudder Family of Funds. Scudder 21st Century Growth Fund seeks
long-term growth by investing primarily in the securities of emerging growth
companies poised to be leaders in the 21st century. Scudder Classic Growth Fund
seeks long-term growth by investing primarily in common stocks of medium to
large U.S. companies; additionally, it seeks to keep the value of its shares
more stable than the typical capital growth mutual fund. Most recently, we
introduced the Scudder Pathway Series, four portfolios -- Conservative,
Balanced, Growth, and International -- each of which include five or more
Scudder funds and which together are designed to meet a range of investor needs.
For more information on these and other Scudder products, please see page 22.
Thank you for your continued investment in Scudder Massachusetts Limited
Term Tax Free Fund. Please do not hesitate to call Scudder Investor Information
at 1-800-225-2470 with any questions regarding your account.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder Massachusetts Limited Term Tax Free Fund
3 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
PERFORMANCE UPDATE as of October 31, 1996
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/96 $10,000 Cumulative Annual
- --------------------------------------
SCUDDER MASSACHUSETTS LIMITED TERM
TAX FREE FUND
- --------------------------------------
1 Year $10,398 3.98% 3.98%
Life of
Fund* $11,238 12.38% 4.40%
- --------------------------------------
LEHMAN BROTHERS MUNICIPAL BOND INDEX
(3 YEAR)
- --------------------------------------
1 Year $10,451 4.51% 4.51%
Life of
Fund* $11,351 13.51% 4.86%
- --------------------------------------
*The Fund commenced operations on February 15, 1994.
Index comparisons begin February 28, 1994.
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
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:
SCUDDER MASSACHUSETTS LIMITED TERM
TAX FREE FUND
Year Amount
- ----------------------
2/94* $10,000
4/94 $ 9,912
10/94 $10,030
4/95 $10,414
10/95 $10,840
4/96 $10,997
10/96 $11,271
LEHMAN BROTHERS MUNICIPAL BOND INDEX
(3 YEAR)
Year Amount
- ----------------------
2/94* $10,000
4/94 $ 9,938
10/94 $10,056
4/95 $10,399
10/95 $10,862
4/96 $11,051
10/96 $11,351
The 3-year Lehman Brothers Municipal Bond Index is an unmanaged
market-value-weighted measure of the short-term municipal bond market
and includes bonds with maturities of two to three years. Index returns
assume reinvested dividends and, unlike Fund returns, do not reflect 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 OCTOBER 31
1994* 1995 1996
------------------------
NET ASSET VALUE... $11.64 $12.02 $11.99
INCOME DIVIDENDS.. $ .36 $ .54 $ .50
FUND TOTAL
RETURN (%)........ .00 8.08 3.98
INDEX TOTAL
RETURN (%)........ .56 8.01 4.51
All performance is historical, 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.
If the Adviser had not maintained the Fund's expenses, the total return
for the one year and life of Fund periods would have been lower.
4 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
PORTFOLIO SUMMARY as of October 31, 1996
- --------------------------------------------------------------------------
DIVERSIFICATION
- --------------------------------------------------------------------------
Hospital/Health 31%
Other General Obligation/Lease 22%
Housing Finance Authority 11%
State General Obligation 7%
Higher Education 7%
Student Loans 6%
Pollution Control/Industrial Development 5%
Water/Sewer Revenue 4%
Sales/Special Tax 3%
Miscellaneous Municipal 4%
- ---------------------------------------------
100%
- ---------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund continues to hold several types of
Massachusetts general obligation bonds, which
offer attractive value, high overall quality,
and relative stability.
- ---------------------------------------------------------------------------
QUALITY
- ---------------------------------------------------------------------------
AAA 65%
AA 14%
A 7%
BBB 7%
Not Rated 5%
Below Investment Grade 2%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
WEIGHTED AVERAGE QUALITY: AA
Overall credit quality remains high with
79% of the Fund's portfolio rated AAA or AA.
- --------------------------------------------------------------------------
EFFECTIVE MATURITY
- --------------------------------------------------------------------------
Less than 1 year 19%
1 - 5 years 47%
5 - 10 years 33%
Greater than 10 years 1%
- --------------------------------------
100%
- --------------------------------------
WEIGHTED AVERAGE EFFECTIVE MATURITY: 4.2 YEARS
Over the Fund's most recent fiscal year we emphasized both
ends of its limited maturity range--the shortest maturities
for safety and the longest maturities (up to 10 years) for
higher yields and possible capital appreciation.
- -----------------------------------------------------------------------------
For more complete details about the Fund's investment portfolio,
see page 10.
5 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Portfolio Management Discussion
Dear Shareholders,
During a 12-month period that witnessed partial government shutdowns, talk of
tax overhaul, and intermittent bond market volatility, Scudder Massachusetts
Limited Term Tax Free Fund continued to provide investors with greater share
price stability than longer-maturity tax-exempt vehicles as well as an
attractive double tax-free yield.
For shareholders subject to the 46.85% maximum combined federal and
Massachusetts income tax rate, the Fund's 30-day net annualized SEC yield of
4.02% as of October 31, 1996, was equivalent to a fully taxable 7.56% yield,
higher than yields currently provided by comparable taxable investments. The
Fund's tax-equivalent yield compares favorably with the 5.40% average yield of
2-year Massachusetts bank certificates of deposit as of October 31, 1996. Of
course, unlike fixed-rate CDs, which are FDIC-insured up to certain limits, the
Fund's yield and share price fluctuate, and principal investments in the Fund
are not insured.
As the graph shows, over the past 12 months, the Fund's tax-equivalent yield has
been consistently higher than the yield of the average 2-year CD tracked
nationally.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART TITLE: Scudder Massachusetts Limited Term Tax Free Fund's
Tax-Equivalent Yield vs. National Two-Year
CD Rates
CHART PERIOD: November 1995 through October 1996
CHART DATA:
National SMALTTFF
average of tax-equivalent
two-year CD yields yield
------------------ --------------
11/95 5.01% 7.75%
4.82 7.60
1/96 4.68 7.22
4.48 7.07
3/96 4.73 7.04
4.83 7.36
5/96 4.94 7.45
5.14 7.32
7/96 5.21 7.09
5.20 7.13
5.25 7.62
10/96 5.22 7.56
Source of CD data: BanxQuote.
Tax equivalent yields are for the 46.85% maximum federal and state tax rate.
For the most recent fiscal year ended October 31, 1996, the Fund's net asset
value declined $0.03 to $11.99 per share, and the Fund provided $0.50 per share
in income distributions, contributing to a total return of 3.98%. This return
compares favorably with the 3.48% return of the 37 similar state municipal bond
funds tracked by Lipper Analytical Services, Inc. As shown in the chart on page
7, the Fund's average annual total return placed it in the top one fifth of its
peer group for one- and two-year periods.
6 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Strong Relative Performance
(Returns for periods ended October 31, 1996)
- ------------------------------------------------------
Scudder
Massachusetts Lipper
Limited Term average Number
Tax Free Fund annual Percentile of Funds
Period return return Ranking tracked
- ------------------------------------------------------
1 year 3.98% 3.48% Top 19% 37
2 years 6.01 5.42 Top 15% 33
======================================================
Past performance does not guarantee future results.
An Update on the
Massachusetts Economy
Massachusetts' steadily recovering economy has helped the Commonwealth replenish
its reserves, while also creating jobs. Fiscal year 1996 operating revenues were
up 5.7% while expenditures rose only 4.0%. The state finished its fiscal year
with an operating surplus of $426 million, and the overall Massachusetts
taxpayer income tax bill for 1996 will be reduced by $150 million from 1995. Key
industries benefiting from the latest but more modest "Massachusetts miracle"
have been computer, mutual fund, consulting, and biotechnology firms.
Approximately two-thirds of the jobs lost in the last recession have been
replaced. The state's unemployment rate in July 1996 of 4.5% -- the lowest since
1989 -- was well below the national average of 5.2%. And Massachusetts continues
to be a wealthy state. Per capita income in 1995 was $26,994, 18% higher than
the national average and fourth highest in the country. Debt levels are high,
but manageable. Lastly, recent federal welfare reform legislation is not
expected to negatively effect the Commonwealth since its own welfare legislation
passed in September 1995 is similar.
Economic and Market Review
During the Fund's most recent fiscal year, bonds alternately prospered and
languished under differing market influences. As we mentioned in our last report
to you, bonds rallied in late 1995 as the Republican-led Congress strove to
balance the U.S. budget deficit through a series of partial government
shutdowns. The municipal bond market then retreated for a time as these efforts
failed and Steve Forbes' presidential campaign temporarily re-floated the "flat
tax" idea. Meanwhile the U.S. economy picked up steam in April as snow from
heavy winter storms melted, shoppers returned to retail stores, and hiring
increased. While many were understandably heartened by this increase in economic
momentum, bond market participants feared a pickup in inflation, and bond yields
headed higher (and prices lower) during the second quarter of 1996. Bond yields
as well as the economy retreated toward the end of the Fund's fiscal year as
consumers seemed to feel the weight of their personal debt -- credit card debt
service payments as a percentage of disposable income rose to an all-time high
this year, and analysts predicted over a million people will declare bankruptcy
in 1996.
7 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Over the past several years, the economy has actually progressed at a fairly
consistent pace, with inflation restrained throughout. The bond market, on the
other hand, has been quite volatile, constantly anticipating far greater changes
than the economy has exhibited. Now, after six years of expansion, the U.S.
economy may actually be slowing. Consumers appear to be overburdened, retail
sales figures were negative during the third quarter, the government's monetary
policy is tight by historical standards (with a Fed Funds rate of 5 1/4%), and
business investment is leveling off. In recent months, bond yields have
fluctuated, but have generally declined in step with this pullback.
For the 12 months ended October 31, municipal bonds, which typically exhibit
less price volatility than Treasury bonds, held their own, thanks to a
relatively light supply. While yields of 10-year Treasury bonds rose three
tenths of a percentage point and prices declined 2% during the period, yields
and prices of 10-year AAA municipal bonds ended essentially unchanged for the
same period. Large numbers of municipal bonds were called or matured during the
period, especially in June and July. The municipal market continues to be
supported both by retail bond buyers and institutions such as insurance
companies.
Our Portfolio Strategy
Over the 12 months we continued to emphasize both ends of the Fund's limited
maturity range: the shortest maturities for safety and the longest maturities
(maximum of 10 years) for higher yields and possible capital appreciation. We
pursue this strategy because five- to 10-year bonds currently offer the most
attractive after-tax yields and total return potential within the range of
maturities in which the Fund is permitted to invest.
The Fund continues to hold several types of Massachusetts general obligation
(G.O.) bonds. These bonds offer attractive value, high overall quality, and
relative stability. In addition, we hold a large percentage (32% as of October
31) of pre-refunded bonds in the Fund's portfolio. Bonds are pre-refunded when
issuers sell new debt at lower prevailing rates and use the proceeds to
establish an escrow account of U.S. Treasury bonds designated to retire the
original municipal bonds on their future call dates. These bonds offer the
highest quality available in the municipal marketplace, yet are typically priced
lower than similar bonds of slightly lower quality. The Fund's overall credit
quality remains high, with 79% of the bonds in its portfolio rated AAA or AA.
A Further Slowdown?
The U.S. economy is flashing several caution lights. Some companies -- notably
fast food outlets and department stores -- are attempting to interest their
customers in higher priced items. That these and other companies are even
considering raising prices makes us believe that the economy may slow further,
because we are confident that the Federal Reserve will raise interest rates at
the first signs of any uptick in inflation. Though we believe that any excesses
in the U.S. economy would soon be corrected, and that the economy will remain
resilient, any further slowdown should benefit the municipal bond market.
8 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
We will continue to maintain a conservative investment strategy, including
holding premium bonds, diversifying broadly, and keeping the Fund's credit
quality high. We will also search for attractive value by weighing the maturity
characteristics, credit quality, and income potential of each bond we consider
adding to Scudder Massachusetts Limited Term Tax Free Fund's portfolio. Thank
you for investing with Scudder.
Sincerely,
Your Portfolio Management Team
/s/Philip G. Condon /s/Kathleen A. Meany
Philip G. Condon Kathleen A. Meany
Scudder Massachusetts Limited
Term Tax Free Fund: A Team
Approach to Investing
Scudder Massachusetts Limited Term Tax Free Fund is run by a team of Scudder
investment professionals who each play an important role in the Fund's
management process. Team members work together to develop investment strategies
and select securities for the Fund. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Philip G. Condon, Lead Portfolio Manager, joined Scudder in 1983 and has 16
years of experience as a portfolio manager and in municipal research. Phil has
managed Scudder Massachusetts Limited Term Tax Free Fund since its inception and
Scudder Massachusetts Tax Free Fund since 1989. Kathleen A. Meany, Portfolio
Manager, joined Scudder in 1988 and has 19 years of municipal sales and
portfolio management experience. Kate has managed Scudder Massachusetts Limited
Term Tax Free Fund since its inception and Scudder Massachusetts Tax Free Fund
since 1988.
Your Portfolio Management Team: Kathleen A. Meany and Philip G. Condon
9 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Investment Portfolio as of October 31, 1996
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Short-term Municipal Investments 12.7%
- -----------------------------------------------------------------------------------------------------------------------------
Massachusetts
Massachusetts Bay Transportation Authority, 1984 Series-A, Optional Put,
3.625%, 3/1/14* ............................................................. 1,000,000 A-1+ 1,000,100
Massachusetts, General Obligation, Dedicated Income Tax, Series B, Daily Demand
Note, 3.6%, 12/1/97* ........................................................ 700,000 MIG1 700,000
Massachusetts Health & Educational Facilities Authority:
Brigham and Women's Hospital, Series A, Weekly Demand Note, 3.55%, 7/1/17* .. 900,000 AA 900,000
Harvard University, Series I, Weekly Demand Note, 3.4%, 2/1/16* ............. 1,150,000 A-1+ 1,150,000
Series B, Daily Demand Note, 3.6%, 7/1/05* (c) .............................. 300,000 A-1+ 300,000
Series D, Capital Asset Program, Weekly Demand Note, 3.55%, 1/1/35* (c) ..... 1,100,000 SP1+ 1,100,000
New Bedford, MA, Revenue Anticipation Note, 4.5%, 6/30/97 ..................... 1,000,000 NR 1,004,590
Springfield, MA, Bond Anticipation Note, 4.25%, 2/14/97 ....................... 2,000,000 NR 2,003,480
- ------------------------------------------------------------------------------------------------------------------------------
Total Short-term Municipal Investments (Cost $8,155,401) ...................... 8,158,170
- ------------------------------------------------------------------------------------------------------------------------------
Intermediate-term Municipal Investments 87.3%
- ------------------------------------------------------------------------------------------------------------------------------
Massachusetts
Lowell, MA, General Obligation, Prerefunded 2/15/01, 8.3%, 2/15/05** .......... 1,635,000 AAA 1,917,839
Massachusetts Educational Loan Authority, Issue E, Series A, 6.7%, 1/1/02 (c) . 450,000 AAA 485,478
Massachusetts General Obligation:
Series A, 5.25%, 2/1/01 (c) ................................................. 3,000,000 AAA 3,085,950
Series A, 5.2%, 6/1/04 ...................................................... 1,000,000 AA 1,020,670
Series C, 7.5%, 12/1/07, Prerefunded 12/1/00** .............................. 750,000 AAA 849,158
Series C, 7%, 12/1/10, Prerefunded 12/1/00** ................................ 775,000 AAA 850,129
Massachusetts Health & Educational Facilities Authority:
Berkshire Health System, Series D, 5.3%, 10/1/03 (c) ........................ 1,350,000 AAA 1,391,674
Berkshire Health System, Series C, 5.9%, 10/1/11 ............................ 1,000,000 BBB 947,100
Central Massachusetts Medical Center, Series B, 6%, 7/1/02 (c) .............. 500,000 AAA 532,995
Daughters of Charity, Carney Hospital, 7.5%, 7/1/05, Prerefunded 7/1/00** ... 1,000,000 AAA 1,120,160
Daughters of Charity, Series D, 4.9%, 7/1/00 ................................ 700,000 AA 708,379
Medical Academic & Scientific, Series A:
5.9%, 1/1/00 ............................................................. 500,000 A 513,725
6%, 1/1/01 ............................................................... 1,000,000 A 1,033,320
6.1%, 1/1/02 ............................................................. 500,000 A 520,120
St. Joseph's Hospital, Series C, 9.5%, 10/1/20, Prerefunded 10/1/99** ....... 3,375,000 AAA 3,854,115
Valley Regional Health System, Series C, 5.3%, 7/1/00 (c) .................. 1,500,000 AAA 1,528,875
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wheaton College, Series B, 7.2%, 7/1/09, Prerefunded 7/1/99** ................. 590,000 AAA 644,870
Massachusetts Housing Finance Agency:
Housing Project Revenue, Series A, 5.2%, 10/1/00 ............................ 575,000 A 587,006
Multi-Family Housing Project 1988, Series A, 8.7%, 4/1/14, Prerefunded 4/1/98** 1,465,000 A 1,599,428
Multi-Family Housing Project, Series A, 8.8%, 8/1/21 ........................ 665,000 A 696,800
Single-Family Mortgage Revenue, Series 3, 7.875%, 6/1/14 .................... 4,000,000 AA 4,087,320
Massachusetts Industrial Finance Agency:
Boston Museum of Fine Arts, Series 1996, 5.125%, 1/1/04 (c) ................. 1,000,000 AAA 1,021,270
Cape Cod Health Systems, Series 1990, 8.5%, 11/15/20, Prerefunded 11/15/00** 2,150,000 AAA 2,505,889
College of the Holy Cross, Series 1996, 5.5%, 3/1/06 (c) .................... 1,000,000 AAA 1,035,350
East Boston Neighborhood Project, Series 1996, 7.25%, 7/1/06 ................ 1,000,000 BA 1,003,780
Leominister Hospital, Series 1989A, 8.625%, 8/1/09, Prerefunded 8/1/99** .... 2,000,000 AAA 2,257,080
Milton Academy, Revenue Refunding, Series A, 7.25%, 9/1/19,
Prerefunded 9/1/99 (c)** ................................................. 700,000 AAA 768,642
Resource Recovery, North Andover Solid Waste, Series A:
6.15%, 7/1/02 ............................................................ 750,000 BBB 772,103
6.3%, 7/1/05 ............................................................. 2,750,000 BBB 2,877,600
Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue:
Series B, 6.3%, 7/1/00 ...................................................... 345,000 BBB 363,130
Series B, 6.375%, 7/1/01 .................................................... 1,000,000 BBB 1,065,070
Massachusetts Turnpike Authority, Bond Anticipation Note, Series 1996A, 5%,
6/1/99 ...................................................................... 2,000,000 AA 2,038,220
Massachusetts Water Resource Authority, Series A, 6.75%, 7/15/12
Prerefunded 7/15/02** ....................................................... 1,000,000 AAA 1,125,380
Nantucket, MA, General Obligation, 6.25%, 12/1/02 ............................. 250,000 A 269,873
New England Education Loan Marketing Corp., Massachusetts Student Loan Revenue
Refunding, Issue A, 5.8%, 3/1/02 ............................................ 3,150,000 AAA 3,280,819
South Essex, MA, Sewer District, Series B, 6.75%, 6/1/13, Prerefunded
6/1/04 (c)** ................................................................ 1,000,000 AAA 1,138,700
Southeastern Massachusetts University Building, Series A, 5.5%, 5/1/04 (c) .... 1,010,000 AAA 1,052,157
Springfield, MA, Municipal Purpose Loan, General Obligation, Series 1996,
6.25%, 8/1/06 (c) ........................................................... 1,000,000 AAA 1,093,020
Worcester, MA, General Obligation, Revenue Refunding, Series G, 6%, 7/1/01 (c) 2,000,000 AAA 2,121,420
Puerto Rico
Puerto Rico Public Building Authority, 6.75%, 7/1/04 (c) ...................... 2,250,000 AAA 2,553,165
- ------------------------------------------------------------------------------------------------------------------------------
Total Intermediate-term Municipal Investments (Cost $55,269,962) .............. 56,317,779
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $63,425,363) (a) .................... 64,475,949
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
- --------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $63,425,363. At October 31,
1996, net unrealized appreciation for all securities was $1,050,586. This
consisted of aggregate gross unrealized appreciation for all securities in
which there was an excess of market value over tax cost of $1,092,687 and
aggregate gross unrealized depreciation for all investment securities in
which there was an excess of tax cost over market value of $42,101.
(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 are either Standard & Poor's Ratings Group, Moody's Investors
Service, Inc. or Fitch Investors Services, Inc.
(c) Bond is insured by one of these companies: AMBAC, HIBI, 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 or line 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 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.
12 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of October 31, 1996
<TABLE>
<S> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $63,425,363) (Note A) .......... $ 64,475,949
Cash ................................................................... 97,933
Interest receivable .................................................... 1,069,306
Receivable for Fund shares sold ........................................ 11,523
Deferred organizations expenses (Note A) ............................... 12,875
----------------
Total assets ........................................................... 65,667,586
----------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Dividends payable ...................................................... $ 81,368
Payable for Fund shares redeemed ....................................... 10,290
Accrued management fee (Note C) ........................................ 21,561
Other accrued expenses (Note C) ........................................ 49,279
----------------
Total liabilities ...................................................... 162,498
-------------------------------------------------------------------------------------------
Net assets, at market value ............................................ $ 65,505,088
-------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation on investments ................................. $ 1,050,586
Accumulated net realized loss .......................................... (152,407)
Paid-in capital ........................................................ 64,606,909
-------------------------------------------------------------------------------------------
Net assets, at market value ............................................ $ 65,505,088
-------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($65,505,088 /
5,463,378 outstanding shares of beneficial interest, $.01 par ----------------
value, unlimited number of shares authorized) ....................... $ 11.99
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Statement of Operations
year ended October 31, 1996
<TABLE>
<S> <C> <C>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
Interest ....................................................... $ 2,977,286
-----------------
Expenses:
Management fee (Note C) ........................................ $ 370,008
Custodian and accounting fees (Note C) ......................... 53,997
Services to shareholders (Note C) .............................. 49,710
Trustees' fees and expenses (Note C) ........................... 15,078
Auditing ....................................................... 23,694
Legal .......................................................... 3,724
Reports to shareholders ........................................ 12,309
Registration fees .............................................. 11,818
Amortization of organization expenses (Note A) ................. 5,640
Other .......................................................... 8,292
-----------------
Total expenses before reductions ............................... 554,270
Expense reductions (Note C) .................................... (138,912)
-----------------
Expenses, net .................................................. 415,358
-------------------------------------------------------------------------------------------
Net investment income .......................................... 2,561,928
-------------------------------------------------------------------------------------------
Realized and unrealized loss on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investments ............................. (112,182)
Net unrealized depreciation on investments during the period ... (97,803)
-----------------
Net loss on investments ........................................ (209,985)
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations ........... $ 2,351,943
-------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended October 31,
Increase (Decrease) in Net Assets 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income ...................................... $ 2,561,928 $ 2,266,506
Net realized gain (loss) on investments .................... (112,182) 52,320
Net unrealized appreciation (depreciation) on investments
during the period ....................................... (97,803) 1,598,035
-------------- --------------
Net increase in net assets resulting from operations ....... 2,351,943 3,916,861
-------------- --------------
Distributions to shareholders from net investment income ... (2,561,928) (2,266,506)
-------------- --------------
Fund share transactions:
Proceeds from shares sold .................................. 39,513,439 51,219,003
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................... 1,674,479 1,558,937
Cost of shares redeemed .................................... (30,966,008) (34,483,113)
-------------- --------------
Net increase in net assets from Fund share transactions .... 10,221,910 18,294,827
-------------- --------------
Increase in net assets ..................................... 10,011,925 19,945,182
Net assets at beginning of period .......................... 55,493,163 35,547,981
---------------------------------------------------------------------------------------------
Net assets at end of period ................................ $ 65,505,088 $ 55,493,163
---------------------------------------------------------------------------------------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .................. 4,615,167 3,052,899
-------------- --------------
Shares sold ................................................ 3,294,988 4,365,476
Shares issued to shareholders in reinvestment of
distributions ........................................... 139,573 131,715
Shares redeemed ............................................ (2,586,350) (2,934,923)
-------------- --------------
Net increase in Fund shares ................................ 848,211 1,562,268
---------------------------------------------------------------------------------------------
Shares outstanding at end of period ........................ 5,463,378 4,615,167
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Financial Highlights
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
For the Period
February 15, 1994
(commencement of
operations) to
Years Ended October 31, October 31,
1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
----------------------------------------------
Net asset value, beginning of period ............ $12.02 $11.64 $12.00
----------------------------------------------
Income from investment operations:
Net investment income ........................... .50 .54 .36
Net realized and unrealized gain (loss) on
investment transactions ...................... (.03) .38 (.36)
----------------------------------------------
Total from investment operations ................ .47 .92 .00
----------------------------------------------
Less distributions from net investment income ... (.50) (.54) (.36)
----------------------------------------------
Net asset value, end of period .................. $11.99 $12.02 $11.64
---------------------------------------------------------------------------------------------------
Total Return (%) (a) ............................ 3.98 8.08 0.00**
Ratios and Supplemental Data
Net assets, end of period ($ millions) .......... 66 55 36
Ratio of operating expenses, net to average
daily net assets (%) ......................... .67 .24 --
Ratio of operating expenses before expense ...... .90 .92 1.44*
reductions, to average daily net assets (%)
Ratio of net investment income to average
daily net assets (%) ......................... 4.16 4.56 4.45*
Portfolio turnover rate (%) ..................... 12.4 27.4 26.3*
</TABLE>
(a) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
16 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder Massachusetts Limited Term Tax Free Fund (the "Fund") is a
non-diversified series of Scudder State Tax Free Trust, a Massachusetts business
trust (the "Trust"), which is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. There are
currently six series in the Trust.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. 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. All other debt securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Trustees. Short-term
investments having a maturity of sixty days or less are valued at amortized
cost.
Amortization and Accretion. All premiums and original issue discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of its taxable and tax-exempt income to its shareholders.
The Fund accordingly paid no federal income taxes and no provision for federal
income taxes was required.
At October 31, 1996, the Fund had a net tax basis capital loss carryforward of
approximately $141,000 which may be applied against any realized net taxable
capital gains of each succeeding year until fully utilized or until October 31,
2002, (26,000) and October 31, 2004 (115,000), the respective expiration dates,
whichever occurs first.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a dividend 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 Fund 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 annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. As a result, net
investment income (loss) and net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
The Fund uses the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
Organization Cost. Costs incurred by the Fund in connection with its
organization and initial registration of shares have been deferred and are being
amortized on a straight-line basis over a five-year period.
17 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
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
For the year ended October 31, 1996, purchases and sales of investments
(excluding short-term) aggregated $19,038,003 and $6,057,700, respectively.
C. Related Parties
Under the Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund agrees to pay the Adviser a fee
equal to an annual rate of 0.60% of the Fund's average daily net assets,
computed and accrued daily and payable monthly. As manager of the assets of the
Fund, the Adviser directs the investments of the Fund in accordance with its
investment objectives, policies, and restrictions. The Adviser determines the
securities, instruments, and other contracts relating to investments to be
purchased, sold or entered into by the Fund. In addition to portfolio management
services, the Adviser provides certain administrative services in accordance
with the Agreement. The Agreement also provides that if the Fund's expenses,
exclusive of taxes, interest, and extraordinary expenses, exceed specified
limits, such excess, up to the amount of the management fee, will be paid by the
Adviser. For the period August 1, 1995 to February 29, 1996, the Adviser agreed
to maintain the annualized expenses at 0.50% of average daily net assets.
Effective March 1, 1996, the Adviser agreed to maintain the annualized expenses
at 0.75% of average daily net assets until July 31, 1997. For the year ended
October 31, 1996, the Adviser imposed fees amounting to $231,096 and the portion
not imposed amounted to $138,912 at October 31, 1996.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
year ended October 31, 1996, the amount charged to the Fund by SSC aggregated
$36,098 of which $3,101 was unpaid at October 31, 1996.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
October 31, 1996, the amount charged to the Fund by SFAC aggregated $36,000, of
which $3,000 was unpaid at October 31, 1996.
The Trust pays each Trustee not affiliated with the Adviser $12,000 annually,
divided equally among the series of the Trust, plus specified amounts for
attended board and committee meetings. For the year ended October 31, 1996,
Trustees' fees aggregated $15,078.
18 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Report of Independent Accountants
To the Trustees of Scudder State Tax Free Trust and to the Shareholders of
Scudder Massachusetts Limited Term Tax Free Fund:
We have audited the accompanying statement of assets and liabilities of Scudder
Massachusetts Limited Term Tax Free Fund, including the investment portfolio, as
of October 31, 1996, and the related statement of operations for the year then
ended, the statements of changes in net assets, for each of the two years in the
period then ended, and the financial highlights for each of the two years in the
period then ended, and for the period February 15, 1994 (commencement of
operations) to October 31, 1994. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder Massachusetts Limited Term Tax Free Fund as of October 31, 1996, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the two years in the period then ended, and for the period February
15, 1994 (commencement of operations) to October 31, 1994 in conformity with
generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
December 18, 1996
19 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Tax Information
Of the dividends paid by the Scudder Massachusetts Limited Term Tax Free Fund
from net investment income for the taxable year ended October 31, 1996, 100%
constituted exempt interest dividends for regular federal income tax and
Massachusetts state income tax purposes.
Please consult a tax adviser if you have any questions about federal or state
income tax laws, or on how to prepare your tax returns. If you have specific
questions about your Scudder Fund account, please call a Scudder Investor
Relations Representative at 1-800-225-5163.
20 - Scudder Massachusetts Limited Term Tax Free Fund
<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
Philip G. Condon*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Jeremy L. Ragus*
Vice President
Rebecca Wilson
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.
21 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund*
Scudder Massachusetts Limited Term
Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
U. S. Income
- ------------
Scudder Short Term Bond Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder Zero Coupon 2000 Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
U.S. Growth
- -----------
Value
Scudder Capital Growth Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Quality Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Emerging Markets Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund
Retirement Programs
- -------------------
IRA
SEP IRA
SIMPLE IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan *+++ +++
(a variable annuity)
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
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. +++Funds within categories are listed from expected
least to most risk. +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.
22 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
How to Contact Scudder
Account Service and Information
- --------------------------------------------------------------------------------
For existing account services and transactions
Scudder Investor Relations -- 1-800-225-5163
For 24 hour account information, fund information, exchanges, and
an overview of all the services available to you
Scudder Electronic Account Services -- http://funds.scudder.com
For information about your Scudder accounts, exchanges and redemptions
Scudder Automated Information Line (SAIL) -- 1-800-343-2890
Investment Information
- --------------------------------------------------------------------------------
For information about the Scudder funds, including additional
applications and prospectuses, or for answers to investment questions
Scudder Investor Relations -- 1-800-225-2470
[email protected]
Scudder's World Wide Web Site -- http://funds.scudder.com
For establishing 401(k) and 403(b) plans
Scudder Defined Contribution Services -- 1-800-323-6105
Scudder Brokerage Services
- --------------------------------------------------------------------------------
To receive information about this discount brokerage service and to
obtain an application
Scudder Brokerage Services* -- 1-800-700-0820
Please address all correspondence to
- --------------------------------------------------------------------------------
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
Or Stop by a Scudder Funds Center
- --------------------------------------------------------------------------------
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 Chicago San Francisco
Boston New York
For information on Scudder Treasurers Trust(TM), an institutional cash
management service for corporations, non-profit organizations and
trusts which utilizes certain portfolios of Scudder Fund, Inc.*
($100,000 minimum), call: 1-800-541-7703.
For information on Scudder Institutional Funds**, funds designed to
meet the broad investment management and service needs of banks and
other institutions, call: 1-800-854-8525.
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
* Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061 --
Member NASD/SIPC
** 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.
23 - Scudder Massachusetts Limited Term Tax Free Fund
<PAGE>
Celebrating Over 75 Years of Serving Investors
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 over 40 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.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
