Scudder
New York
Tax Free Money Fund
Scudder
New York
Tax Free Fund
Semiannual Report
September 30, 1996
Pure No-Load(TM) Funds
For investors seeking triple-tax-free income exempt from New York City, state,
and regular federal income taxes.
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
Scudder New York
Tax Free Fund
4 Performance Update
5 Portfolio Summary
7 Portfolio Management Discussion
17 Investment Portfolio
22 Financial Statements
25 Financial Highlights
Scudder New York
Tax Free Money Fund
6 Portfolio Management Discussion
10 Investment Portfolio
13 Financial Statements
16 Financial Highlights
26 Notes to Financial Statements
30 Investment Products and Services
31 How to Contact Scudder
In Brief
Scudder New York
Tax Free Money Fund
o Scudder New York Tax Free Money Fund offered a 7-day effective yield of 3.06%
on September 30, 1996, equivalent to a 5.45% taxable yield for investors in the
top federal and state income tax brackets.
Scudder New York
Tax Free Fund
o Scudder New York Tax Free Fund provided a 4.82% 30-day net annualized SEC
yield on September 30, 1996.
o For shareholders subject to the 43.90% maximum combined federal and state
income tax rate, the Fund's yield was equal to a taxable yield of 8.59%.
THE PRINTED VERSION CONTAINS A BAR CHART HERE
BAR CHART TITLE:
30-Day Net Annualized SEC Yield on September 30, 1996
BAR CHART DATA:
Scudder New York Tax Free Fund 4.82%
Taxable Yield Needed to Equal the Fund's Yield 8.59%
2-Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Dear Shareholders,
We hope you enjoy our newly redesigned shareholder report. The new format,
which is being gradually introduced for all Scudder funds, is intended to
enhance the usefulness and readability of the reports. Let us know what you
think.
Scudder New York Tax Free Fund continues to post a high double tax free
yield by investing in a wide variety of New York municipal bonds. We're pleased
to report that the Fund's yield equaled a 8.59% taxable yield for shareholders
subject to the 43.90% maximum combined federal and New York state tax rates at
the close of the Fund's most recent semiannual period.
In addition, Scudder New York Tax Free Money Fund posted a 5.45% tax
equivalent yield based on the maximum federal and state tax rates at the close
of the period, compared with 5.25% six months ago. Please read the portfolio
management discussions beginning on page 6 for more information.
We would like to take this opportunity to introduce the two newest members
of Scudder's family of pure no-load(TM) funds -- Scudder 21st Century Growth
Fund and Scudder Classic Growth Fund. 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. For more information on
either of these new funds and other Scudder products and services, please see
page 30. For questions about Scudder New York Tax Free Fund or Scudder New York
Tax Free Money Fund, please call a Scudder Investor Information representative
at 1-800-225-2470.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
3-Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
PERFORMANCE UPDATE as of September 30, 1996
- ----------------------------------------------------------------
FUND INDEX COMPARISONS
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
9/30/96 $10,000 Cumulative Annual
- --------------------------------------
SCUDDER NEW YORK TAX FREE FUND
- --------------------------------------
1 Year $ 10,534 5.34% 5.34%
5 Year $ 14,264 42.64% 7.36%
10 Year $ 20,700 107.00% 7.55%
- --------------------------------------
LEHMAN BROTHERS MUNICIPAL BOND INDEX
- --------------------------------------
1 Year $ 10,604 6.04% 6.04%
5 Year $ 14,323 43.23% 7.44%
10 Year $ 21,371 113.71% 7.88%
- -----------------------------------------------------------------
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:
YEARLY PERIODS ENDED SEPTEMBER 30
SCUDDER NEW YORK TAX FREE FUND
Year Amount
- ----------------------
'86 $10000
'87 $ 9948
'88 $11177
'89 $12178
'90 $12630
'91 $14512
'92 $16241
'93 $18627
'94 $17716
'95 $19652
'96 $20700
LEHMAN BROTHERS MUNICIPAL BOND INDEX
Year Amount
- ----------------------
'86 $10000
'87 $10053
'88 $11357
'89 $12343
'90 $13182
'91 $14921
'92 $16480
'93 $18580
'94 $18127
'95 $20154
'96 $21371
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>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
-------------------------------------------------------------------------------
NET ASSET VALUE... $10.04 $10.52 $10.73 $10.36 $11.06 $11.36 $11.60 $10.10 $10.65 $10.68
INCOME DIVIDENDS.. $ .74 $ .73 $ .71 $ .68 $ .66 $ .64 $ .58 $ .53 $ .52 $ .53
CAPITAL GAINS
AND OTHER
DISTRIBUTIONS..... $ .20 $ -- $ -- $ .09 $ .13 $ .32 $ .75 $ .44 $ -- $ --
FUND TOTAL
RETURN (%)........ -.52 12.36 8.85 3.72 14.90 11.91 14.69 -4.89 10.92 5.34
INDEX TOTAL
RETURN (%)........ .52 12.98 8.68 6.80 13.19 10.45 12.74 -2.44 11.18 6.04
</TABLE>
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.
4-Scudder New York Tax Free Fund
<PAGE>
PORTFOLIO SUMMARY as of September 30, 1996
- --------------------------------------------------------------------------
DIVERSIFICATION
- --------------------------------------------------------------------------
State General Obligation 18%
Core Cities/Lease 15%
Higher Education 10%
Housing Finance Authority 10%
Hospital/Health 8%
Pollution Control/
Industrial Development 8%
Water/Sewer Revenue 7%
Other General Obligation/Lease 5%
County General Obligation/Lease 5%
Miscellaneous Municipal 14%
- ---------------------------------------------
100%
- ---------------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund is broadly diversified, with investments
in more than 10 categories of New York municipal
bonds.
- ---------------------------------------------------------------------------
QUALITY
- ---------------------------------------------------------------------------
AAA 39%
AA 6%
A % 13%
BBB 32%
Not Rated 10%
- --------------------------------------
100%
- --------------------------------------
Weighted average quality: A
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
Overall quality remains high, with 58%
of portfolio securities rated A or better.
- --------------------------------------------------------------------------
EFFECTIVE MATURITY
- --------------------------------------------------------------------------
Less than 1 year 3%
1-5 years 8%
5-10 years 33%
10-15 years 32%
Greater than 15 years 24%
- --------------------------------------
100%
- --------------------------------------
Weighted average effective maturity: 11.8 years
To take advantage of opportunities to lock
in a substantial income stream over time,
we purchased noncallable intermediate maturity
bonds.
- -----------------------------------------------------------------------------
For more complete details about the Fund's investment portfolio,
see page 17.
5-Scudder New York Tax Free Fund
<PAGE>
Portfolio Management Discussion
Scudder New York Tax Free Money Fund
Dear Shareholders,
The six months ended September 30, 1996 witnessed a change in short-term debt
market psychology. As the U.S. economy gained momentum during the second quarter
of this year, some market watchers began to look for additional credit
tightening moves by the Federal Reserve. Despite some signs that the economy was
cooling to a slow-growth mode during the third quarter, the market continued to
await Fed action. This was evidenced by a modest increase in short-term rates
during the six-month period. The Fed, however, remained "on hold" throughout.
In New York, the state legislature's long delay in passing a budget created
opportunities for investors as various state agencies and school districts were
forced to borrow on a short-term basis. During the period, we selected what we
believed to be the highest quality offerings representing attractive value. In
addition, we maintained an average maturity close to that of Scudder New York
Tax Free Money Fund's peers. As of September 30, 1996, the Fund's average
maturity was 68 days, compared with 69 days as of March 31, 1996. The Fund's
7-day effective yield as of September 30 was 3.06%. For investors in the highest
combined state and federal income tax bracket, the Fund's yield equaled a 5.45%
compounded taxable yield, higher than the 4.83% 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 1.41% for the six-month period
ended September 30, 1996, assuming reinvestment of all income distributions,
which totaled $.014 per share during the period.
Our continuing goal is to provide Fund shareholders with a competitive double
tax-free yield by searching for high-quality, short-term municipal securities
while actively managing the Fund's average maturity.
Sincerely,
Your Portfolio Management Team
/s/Rebecca Wilson /s/K. Sue Cote
Rebecca Wilson K. Sue Cote
6-Scudder New York Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
Scudder New York Tax Free Fund
Dear Shareholders,
Over two contrasting quarters of municipal bond market performance, Scudder New
York Tax Free Fund continued to post a high double-tax-free yield. On September
30, 1996, the Fund's 30-day net annualized SEC yield was 4.82%, equivalent to a
8.59% taxable yield for shareholders subject to the 43.90% maximum combined
state and federal income tax rate. This "tax-equivalent" yield is significantly
higher than current yields available from taxable investments of similar
maturity and credit quality. During its most recent semiannual period ended
September 30, the Fund's shareholders received $0.27 per share of income exempt
from federal and New York state income taxes.
During a six-month period that saw only modest price gains for the
intermediate-maturity municipal bonds the Fund primarily invests in, the Fund's
share price increased $0.01 to $10.68 per share. The combination of the increase
in the Fund's share price and $0.27 in interest income enabled the Fund to post
a positive total return of 2.63% over the semiannual period, compared with the
2.91% average total return of similar funds tracked by Lipper Analytical
Services. The Fund underperformed the Lipper average during the period mainly
because we did not anticipate the sharp acceleration of economic growth and
resulting increases in municipal bond interest rates that occurred during the
second quarter of 1996. With the Fund's duration (a measure of sensitivity to
interest rate changes) positioned longer than average during that time, the
Fund's net asset value did not perform as well as it would have if we had
foreseen the economy's growth spurt.
Economic and Market Review
Overall, the U.S. economy actually grew at a moderate to slow pace during the
Fund's most recent semiannual period. But the two quarters were mixed in terms
of bond market performance; for the second quarter of 1996, the economy picked
up steam as snow from heavy winter storms melted, shoppers returned to retail
stores, and hiring increased. In addition, the collapse of the Congressional
Republicans' budget initiatives was viewed unfavorably by the bond market. These
two factors helped to drive bond yields higher (and prices lower) during the
quarter. Bond yields as well as the economy retreated during the third quarter
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.
Over the past several years, the economy has progressed at a fairly consistent
pace, with inflation restrained throughout. The bond market, on the other hand,
has been fairly 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 weakened
during the third quarter, the government's monetary policy is tight by
7-Scudder New York Tax Free Fund
<PAGE>
historical standards (with a Fed Funds rate of 5 1/4%), and business investment
is slowing. In recent months, bond yields have fluctuated, but have generally
declined in step with this pullback.
For the semiannual period, municipal bonds, which typically exhibit less price
volatility than Treasury bonds, strongly outperformed Treasuries, thanks in part
to a relatively light supply. While yields of long-term Treasury bonds rose two
tenths of a percentage point and prices declined 2.4%, yields of municipal bonds
of similar maturity declined two tenths of a percentage point while prices rose
2.9%. Large numbers of municipal bonds were called or reached maturity during
the period, especially in June and July. In September, new municipal issues
totaled $10.5 billion, the lowest monthly number in over a year. The municipal
market continues to be supported both by retail bond buyers and institutions
such as insurance companies.
Our Strategy
Our strategy in managing Scudder New York Tax Free Fund's portfolio is to buy
and hold noncallable intermediate maturity bonds (those with maturities of 15
years or less) to take advantage of opportunities to lock in a substantial
income stream for the Fund over time. As of September 30, 76% of the Fund's
securities had maturities in this range. We also continue to look for
opportunities to add some BBB-rated and non-rated bonds to the portfolio
especially New York City bonds. These bonds, while carrying some additional
credit risk, generally exhibit less interest rate sensitivity than municipal
bonds rated A or above. We also favor New York City bonds because of the city's
improved prospects -- a growing economy, new industrial development, and
anti-crime measures that are getting results. The Fund held 42% in BBB and
nonrated bonds combined and 16% in New York City bonds at the close of the
period. (For a summary of the Fund's quality, diversification, and maturity
structure, see page 5.)
The Fund's overall quality remains high, with 58% of portfolio securities rated
A or better as of September 30. We continue to invest in a broad selection of
New York municipal bonds, including general obligation, electric utility
revenue, and pollution control/industrial development bonds.
The Fund seeks to provide investors with a competitive level of federal and
state tax-exempt income. Its longer-term 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) choosing investments based on careful credit evaluation.
Budget Turmoil
and Modest Growth
New York State passed its fiscal year 1997 budget later in the cycle than ever
before. Despite the considerable time taken in coming to agreement, the New York
legislature enacted a budget that was structurally imbalanced, relying on $1.3
billion in one-time revenue sources. The state's fiscal year 1997 budget is
projected to amount to $66.1 billion, an increase of 4.1% over the previous
8-Scudder New York Tax Free Fund
<PAGE>
year. The state's budgetary difficulties are likely to continue: New York
forecasts fiscal year 1998 and 1999 budget gaps of $3 billion and $3.2 billion,
respectively. Much of the shortfall can be attributed to New York's 1995 income
tax reduction, which was deemed necessary to keep and attract businesses. The
income tax cut was to be funded with cuts in spending which the legislature
found onerous and never made.
New York State's economy continues to grow at a modest rate, though more slowly
than the U.S. economy as a whole. The state's unemployment rate for August 1996
was 6.1%, the lowest since 1990, but significantly higher than the national
average of 5.1% for the same period. Population growth has been stagnant since
1980. However, New York remains amongst the wealthiest states. In 1994 its per
capita income was $25,731, or 19% higher than the national average. Debt levels
are also high, but well within the state's means.
A Further Slowdown?
The U.S. economy is flashing several caution lights. Some companies -- notably
fast food outlets and department stores -- are attempting to interest their
customers in higher priced items. That these and other companies are even
considering raising prices makes us believe that the economy may slow further,
because we are confident that the Federal Reserve will raise interest rates at
the first signs of any uptick in inflation. Though we believe that any excesses
in the U.S. economy would soon be corrected, and that the economy will remain
resilient, any further slowdown should benefit the municipal bond market.
Meanwhile, as managers we will retain our focus on noncallable,
intermediate-maturity tax-free bonds, because we believe they offer the most
attractive balance of return and risk. We will continue to purchase non-callable
intermediate maturity bonds and pay close attention to credit quality as we
pursue double tax-free income for Scudder New York Tax Free Fund shareholders.
Sincerely,
Your Portfolio Management Team
/s/Jeremy L. Ragus /s/Donald C. Carleton
Jeremy L. Ragus Donald C. Carleton
9-Scudder New York Tax Free Fund
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of September 30, 1996 (Unaudited)
<CAPTION>
PRINCIPAL CREDIT VALUE($)
AMOUNT($) RATING(b) (NOTE A)
- ------------------------------------------------------------------------------------------------------------
MUNICIPAL INVESTMENTS 100.0%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW YORK
Albany, NY, City School District Tax Anticipation Notes, Series 1996,
4%, 10/16/96 ......................................................... 1,000,000 SS&C 1,000,191
Central Islip, NY, Union Free School District Tax Anticipation Notes,
4.5%, 6/30/97 ........................................................ 1,500,000 SS&C 1,504,830
Erie County, NY, Water Authority, Waterworks System Revenue,
Weekly Demand Bonds, 3.6%, 12/1/16 (c)* .............................. 2,000,000 A1+ 2,000,000
Farmingdale NY, Union Free School District Tax Anticipation Note,
General Obligation, Series 1996S, 4.5%, 6/26/97 (c) .................. 1,500,000 SS&C 1,505,318
Harrison, NY, School District Bond Anticipation Notes,
General Obligation, Series 1996, 4%, 3/20/97 ......................... 1,000,000 SS&C 1,002,250
Long Beach, NY, Central School District Tax Anticipation Notes,
General Obligation, Series 1996S, 4.5%, 6/26/97 (c) .................. 1,500,000 SS&C 1,504,488
Metropolitan Transit Authority NY, Revenue Anticipation Note,
Series 1996A, 4.25%, 12/12/96 ........................................ 2,000,000 SP1 2,002,259
Monroe County, NY, Industrial Development Agency, Office Building
Associates, Series 1992, Weekly Demand Note, 3.7%, 10/1/00* .......... 1,549,000 P1 1,549,000
Nassau County, NY, General Obligation, Series 1996S, 5%, 3/1/97 (c) .... 1,500,000 AAA 1,510,901
Nassau County, NY, Bond Anticipation Note, Series 1996, 4.25%,
11/15/96 ............................................................. 1,500,000 SP1 1,501,168
New York City General Obligation, Tax Exempt Commercial Paper:
Series 1994 H-3, 3.75%, 11/12/96 ..................................... 2,000,000 A1 2,000,000
Series H-4, 3.5%, 10/9/96 (c) ........................................ 1,000,000 A1+ 1,000,000
New York City Municipal Water Finance Authority, Tax Exempt
Commercial Paper:
Series 3, 3.1%, 10/24/96 ........................................... 1,000,000 A1+ 1,000,000
Series 1993, 3.55%, 10/8/96 ........................................ 1,500,000 A1+ 1,500,000
New York State Dormitory Authority Revenue, Sloan-Kettering Cancer
Center, Tax Exempt Commercial Paper, Series C, 3.5%, 12/17/96 ........ 750,000 A1 750,000
New York State Energy Research & Development Authority:
Pollution Control Revenue:
Niagara Mohawk Co., Daily Demand Note, 3.95%, 7/1/15* .............. 1,500,000 A1+ 1,500,000
Orange & Rockland Utilities Project, Weekly Demand
Note, 3.6%, 8/1/15 (c)* .......................................... 1,000,000 MIG1 1,000,000
Orange & Rockland Utilities Project, Weekly Demand
Note, 3.6%, 10/1/14* ............................................. 2,100,000 MIG1 2,100,000
New York State Electric & Gas, Daily Demand Bonds, 3.8%, 10/1/29* .... 200,000 A1+ 200,000
Rochester Gas and Electric Company, Monthly Reset Bonds,
3.45%, 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:
3.55%, 10/23/96 .................................................... 500,000 A1+ 500,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
10 -- Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT VALUE($)
AMOUNT($) RATING(b) (NOTE A)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3.55%, 1/21/97 ..................................................... 1,000,000 A1+ 1,000,000
3.40%, 11/21/96 .................................................... 1,000,000 A1+ 1,000,000
New York State Housing Finance Authority:
Housing Revenue Bonds, Liberty View Apartments Project,
Weekly Demand Bonds, 3.6%, 11/1/05* ................................ 1,200,000 MIG1 1,200,000
Hospital for Special Surgery, Variable Rate Demand Bonds,
3.4%, 11/1/10* ....................................................... 2,300,000 MIG1 2,300,000
Normandie Court 1 Housing Revenue, Variable Rate Demand Bonds,
3.7%, 5/15/15* ....................................................... 1,900,000 MIG1 1,900,000
New York State Job Development Authority:
Monthly Reset Bonds, Series 1985 C, 3.75%, 3/1/00* ................... 1,000,000 MIG1 1,000,000
Variable Rate Demand Bonds, Series F, 3.6%, 3/1/99* .................. 710,000 MIG1 710,000
New York State Local Government Assistance Corporation, Series 1993 A,
Weekly Demand Note, 3.7%, 4/1/22* .................................... 1,000,000 MIG1 1,000,000
New York State Medical Care Facilities Financing Agency, Children's
Hospital of Buffalo, Weekly Demand Bonds, 3.7%, 11/1/05* ............. 2,700,000 MIG1 2,700,000
Niagara County, NY, General Obligation, Series B, 5.125%, 1/15/97 (c) .. 750,000 AAA 753,222
North Hempstead, NY, Solid Waste Management Revenue Refunding,
Series 1993 A, Weekly Demand Note, 3.75%, 2/1/12* .................... 1,100,000 MIG1 1,100,000
Rochester, NY, Bond Anticipation Notes, Series I, 4.5%, 10/31/96 ....... 1,000,000 SS&C 1,000,858
Royalton-Hartland, NY, Central School District Bond Anticipation Notes,
Series 1996 A, 4.5%, 8/15/97 ......................................... 2,500,000 SS&C 2,509,505
SAG Harbor, New York Union Free School District Tax Anticipation Notes,
Series 1996, 4.5%, 6/30/97 ........................................... 1,500,000 SS&C 1,505,426
Schenectady County, NY, Industrial Development Revenue, Scotia
Industrial Park Project, Weekly Demand Bonds, 3.6%, 6/1/09* .......... 2,170,000 P1 2,170,000
Seneca County, NY, Industrial Development Agency, 1991 Civic Facility,
New York Chiropractic College, Weekly Demand Bond, 3.6%, 10/1/21* .... 500,000 A1+ 500,000
Syracuse, NY, Industrial Development Agency, Civic Facilities Revenue,
Syracuse University Project, Daily Demand Bond, 3.95%, 3/1/23* ....... 200,000 MIG1 200,000
Triborough Bridge and Tunnel Authority, NY, Special Obligation,
Variable Rate Demand Bonds, 3.8%, 1/1/24 (c)* ........................ 3,000,000 MIG1 3,000,000
Trust for the Cultural Resources of the City of New York, Museum
of Natural History, Weekly Demand Bond, 3.6%, 4/1/21 (c)* ............ 1,600,000 MIG1 1,600,000
- ------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL INVESTMENTS (Cost $54,779,416) 54,779,416
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0% (Cost $54,779,416) (a) 54,779,416
- ------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 -- Scudder New York Tax Free Money Fund
<PAGE>
- -------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $54,779,416.
(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, FSA 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.
The accompanying notes are an integral part of the financial statements.
12 -- Scudder New York Tax Free Money Fund
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
Statement of Assets and Liabilities
as of September 30, 1996 (Unaudited)
<CAPTION>
ASSETS
- ------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (identified cost $54,779,416) (Note A) .......... $54,779,416
Cash .................................................................. 317,626
Receivable on investments sold ........................................ 250,000
Interest receivable ................................................... 368,616
Receivable on Fund shares sold ........................................ 112,753
Other assets .......................................................... 580
-----------
Total assets .......................................................... 55,828,991
LIABILITIES
- ------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ...................................... 186,290
Dividends payable ..................................................... 15,534
Accrued management fee (Note C) ....................................... 11,622
Other accrued expenses (Note C) ....................................... 37,342
-----------
Total liabilities 250,788
--------------------------------------------------------------------------------------
NET ASSETS, AT VALUE $55,578,203
--------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized loss ......................................... $ (15,964)
Shares of beneficial interest ......................................... 555,819
Additional paid-in capital ............................................ 55,038,348
--------------------------------------------------------------------------------------
NET ASSETS, AT VALUE $55,578,203
--------------------------------------------------------------------------------------
NET ASSET VALUE
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per share
($55,578,203 /55,581,872 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.
13 -- Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
Statement of Operations
six months ended September 30, 1996 (Unaudited)
<CAPTION>
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------
<S> <C>
Income:
Interest .................................................................. 981,722
--------
Expenses:
Management fee (Note C) ................................................... $144,071
Services to shareholders (Note C) ......................................... 39,715
Custodian and accounting fees (Note C) .................................... 26,152
Trustees' fees and expenses (Note C) ...................................... 7,859
Auditing .................................................................. 12,445
Reports to shareholders ................................................... 4,942
Registration fees ......................................................... 3,913
Legal ..................................................................... 2,018
Other ..................................................................... 3,104
--------
Total expenses before reductions .......................................... 244,219
Expense reductions (Note C) ............................................... (70,832)
--------
Expenses, net ............................................................. 173,387
---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 808,335
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $808,335
---------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 -- Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED
1996 MARCH 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1996
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .............................................. $ 808,335 $ 1,734,560
Net realized loss from investment transactions ..................... -- (3,311)
------------ ------------
Net increase in net assets resulting from operations ............... 808,335 1,731,249
------------ ------------
Distributions to shareholders from net investment income ........... (808,335) (1,734,560)
------------ ------------
Fund share transactions at net asset value of $1.00 per share:
Shares sold ........................................................ 25,934,769 57,520,540
Net asset value of shares issued to shareholders in reinvestment of
distributions .................................................... 709,304 1,503,912
Shares redeemed .................................................... (29,479,749) (55,556,958)
------------ ------------
Net increase (decrease) in net assets from Fund share
transactions ..................................................... (2,835,676) 3,467,494
------------ ------------
INCREASE (DECREASE) IN NET ASSETS .................................. (2,835,676) 3,464,183
Net assets at beginning of period .................................. 58,413,879 54,949,696
------------ ------------
NET ASSETS AT END OF PERIOD ........................................ $ 55,578,203 $ 58,413,879
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 -- Scudder New York Tax Free Money Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<CAPTION>
FOR THE PERIOD
SIX MONTHS MAY 28, 1987
ENDED (COMMENCEMENT
SEPTEMBER 30, YEARS ENDED MARCH 31, OF OPERATIONS)
1996 TO MARCH 31,
(UNAUDITED) 1996 1995 1994 1993 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $1.000
--------------------------------------------------------------------------------------------
Net investment income .... .014 .031 .025 .017 .022 .035 .046 .052 .047 .033
Distributions from net
investment income ....... (.014) (.031) (.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 $1.000
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(a) ...... 1.41** 3.18 2.57 1.75 2.22 3.55 4.69 5.33 4.78 3.33**
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of
period ($ millions) .... 56 58 55 47 40 36 40 36 41 30
Ratio of operating
expenses, net to average
daily net assets(%) ..... .60* .60 .60 .60 .60 .60 .60 .60 .53 .50*
Ratio of operating
expenses before expense
reductions, to average
daily net assets(%) ..... .85* .86 .89 .97 .97 1.01 1.08 1.08 .98 1.19*
Ratio of net
investment income to
average daily net
assets(%) ............... 2.80* 3.13 2.56 1.73 2.19 3.46 4.57 5.21 4.76 4.08*
(a) Total returns are higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
</TABLE>
16 -- Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO as of September 30, 1996 (Unaudited)
<CAPTION>
PRINCIPAL CREDIT MARKET
AMOUNT($) RATING(b) VALUE($)
- ------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS 2.3%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW YORK
New York State Energy Research & Development Authority, Pollution Control,
Daily Demand Note, 3.75%, 6/1/29* ..................................... 1,500,000 A-1 1,500,000
New York City Municipal Water Authority, Series 1994G, Variable Rate
Demand Note, 3.75%, 6/15/24 (c)* ...................................... 2,800,000 A-1 2,800,000
New York City, NY, General Obligation, Unlimited Tax, Series A4,
Daily Demand Note, 3.9%, 8/1/21* ...................................... 100,000 A-1 100,000
- ------------------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (Cost $4,400,000) 4,400,000
- ------------------------------------------------------------------------------------------------------------
LONG-TERM MUNICIPAL INVESTMENTS 97.6%
- ------------------------------------------------------------------------------------------------------------
NEW YORK
34th Street Partnership Inc., NY, Capital Improvement, 5.5%, 1/1/14 ..... 1,900,000 A 1,806,406
Albany, NY, General Obligation, 7%, 1/15/08 (c) ......................... 485,000 AAA 529,421
Battery Park City Authority, NY, Revenue Refunding,
Series 1993A, 5%, 11/1/13(c) .......................................... 1,850,000 AAA 1,723,053
Battery Park City Authority, NY, 5.5%, 11/1/26 (c) ...................... 1,000,000 AAA 964,360
Chautauqua County, NY, 7.3%, 4/1/08 (c) ................................. 575,000 AAA 677,459
Chautauqua County, NY, 7.3%, 4/1/09 (c) ................................. 575,000 AAA 678,000
City University of New York, Certificates of Participation,
John Jay College, 5%, 8/15/09 (c) ..................................... 2,000,000 AAA 1,903,160
Development Authority of The North Country, NY, Solid Waste Management
Authority, Series 1992A:
6%, 7/1/97 .......................................................... 390,000 BAA 395,338
6.15%, 7/1/98 ....................................................... 980,000 BAA 1,006,243
Dutchess County, NY, Resource Agency Recovery, Solid Waste Management,
Series 1990A, 7.5%, 1/1/09 (c) ........................................ 1,000,000 AAA 1,093,960
Erie County, NY, General Obligation, Series A, 5.5%, 6/15/25 (c) ........ 500,000 AAA 484,530
Glen Cove Housing Authority, Series 96, 8.25%, 10/1/26 .................. 1,500,000 NR 1,499,835
Inverse Variable Rate Certificate Trust, Metropolitan Transit
Authority, Series 1993 B, 6.724%, 6/30/02 (c)** ....................... 8,000,000 NR 8,160,000
Islip, NY, Community Development Agency, Series 1996, 7.5%, 3/1/26 ...... 4,000,000 NR 4,044,840
Monroe County, NY, General Obligation, 6%, 6/1/06 ....................... 500,000 AA 537,925
Monroe County, NY, Airport Authority, Greater Rochester
International Airport, 5.375%, 1/1/19 (c) ............................. 6,550,000 AAA 6,161,061
Municipal Assistance Corporation for New York City,
Series 1996E, 6%, 7/1/05 .............................................. 2,500,000 AA 2,667,950
Nassau County, NY, General Obligation, Refunding Combined
Sewer Districts, Series 1993G, 5.4%, 1/15/10 (c) ...................... 1,655,000 AAA 1,656,721
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT MARKET
AMOUNT($) RATING(b) VALUE($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York City, NY, General Obligation:
Series 1991, 7.5%, 2/1/06 ............................................. 1,000,000 A 1,107,910
Series 1996 A, 7%, 8/1/05 ............................................. 5,000,000 BBB 5,406,150
Series 1996 A, 7%, 8/1/06 ............................................. 5,000,000 BBB 5,413,250
Series 1996 A, 6.25%, 8/1/09 .......................................... 5,175,000 BBB 5,239,222
Series B, 7.5%, 2/1/05 ................................................ 2,500,000 A 2,775,925
Series B, 8.25%, 6/1/06 ............................................... 2,750,000 A 3,308,690
Series B, 6.2%, 8/15/06 ............................................... 500,000 A 510,240
Series B, 7.25%, 8/15/07 .............................................. 2,250,000 A 2,477,183
Series B, 7.3%, 8/15/10 ............................................... 585,000 A 635,409
Series E, 8%, 8/1/05 (c) .............................................. 330,000 AAA 397,620
Series F, 8.25%, 11/15/16 ............................................. 200,000 A 228,066
New York City, NY, Industrial Development Agency:
Civil Facilities, USTA National Tennis Center:
FSA Insured, 6.1%, 11/15/04 ......................................... 1,215,000 AAA 1,307,462
FSA Insured, 6.25%, 11/15/06 ........................................ 3,000,000 AAA 3,258,420
Special Facility, Terminal One Group, 6%, 1/1/19 ...................... 2,480,000 A 2,434,938
Visy Paper Inc. Project, Series 1995, 7.95%, 1/1/28 ................... 2,250,000 NR 2,375,393
New York Housing Corp., Revenue, Series 1993, 5%, 11/1/13 (c) ........... 6,000,000 AAA 5,544,900
New York State Dormitory Authority Lease Revenue, Municipal
Health Facilities, FSA Insured:
5.5%, 5/15/16 ....................................................... 1,000,000 AAA 973,030
5.5%, 5/15/24 ....................................................... 1,000,000 AAA 960,190
New York State Dormitory Authority Revenue:
Bishop H.P. Hucles Nursing Home:
5.4%, 7/1/07 ........................................................ 1,000,000 AA 996,040
5.5%, 7/1/08 ........................................................ 1,100,000 AA 1,096,128
5.625%, 7/1/09 ...................................................... 1,000,000 AA 998,550
Capital Appreciation Insured, Canisius College:
5.4%, 7/1/10 ........................................................ 1,000,000 AAA 983,720
5.45%, 7/1/11 ....................................................... 1,000,000 AAA 983,010
City University:
Series 1995A, 5.625%, 7/1/16 ........................................ 2,750,000 BBB 2,662,192
Series B, 8.125%, 7/1/08 ............................................ 1,200,000 BBB 1,292,268
Series D, 8.2%, 7/1/12 .............................................. 2,000,000 BBB 2,156,280
Consolidated Revenue, Series A2, 5.75%, 7/1/09 (c) .................. 1,000,000 AAA 1,031,870
Consolidated Revenue, 6%, 7/1/10 .................................... 1,000,000 BBB 999,890
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT MARKET
AMOUNT($) RATING(b) VALUE($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Columbia University, 5%, 7/1/15 ....................................... 2,500,000 AAA 2,313,350
Crouse Irving Memorial Hospital, 10.5%, 7/1/17 ........................ 2,600,000 A 2,668,250
Department of Health, Roswell Cancer Center,
Series 1996, 5.75%, 7/1/17 .......................................... 4,000,000 BBB 3,840,560
Mental Health Services Facilities Improvement, Series 1996B:
6.5%, 2/15/10 ....................................................... 1,500,000 A 1,602,405
6.5%, 2/15/11 ....................................................... 1,000,000 A 1,064,530
6%, 2/15/12 ......................................................... 2,500,000 A 2,529,875
Mt. Sinai School of Medicine, Series B, 5.7%, 7/1/11 (c) .............. 1,825,000 AAA 1,865,095
Nyack Hospital:
Series 1996, 6.25%, 7/1/13 .......................................... 500,000 BBB 495,490
6%, 7/1/06 .......................................................... 1,000,000 BBB 1,001,350
Pooled Capital Program, 7.8%, 12/1/05 (c) ............................. 3,610,000 AAA 3,909,991
State University Educational Facility, Series A:
6.5%, 5/15/06 ....................................................... 2,000,000 BBB 2,144,680
7.125%, 5/15/09 ..................................................... 25,000 BBB 26,671
5.875%, 5/15/11 ..................................................... 2,250,000 BBB 2,257,493
State University Educational Facilities,
Series 1993A, 5.875%, 5/15/11 (c) ................................... 380,000 AAA 395,329
Upstate Community College, Series A, 5.8%, 7/1/06 ..................... 1,075,000 BBB 1,082,848
New York State Energy Research and Development Authority,
Western NY Nuclear Service Center, Series 1995:
5.5%, 4/1/05 ........................................................ 500,000 BBB 490,370
5.5%, 4/1/06 ........................................................ 300,000 BBB 291,576
New York State Environmental Facilities Corporation, Pollution
Control Revenue, Series 1994, 5.75%, 6/15/10 .......................... 1,750,000 AA 1,803,480
New York State Environmental Facilities Corporation, Pollution
Control Revenue, Water Revolving Fund, Series D, 6.9%, 5/15/15 ........ 2,370,000 AAA 2,679,972
New York State Housing Finance Agency Health Facilities,
Series 1996A, 6.375%, 11/1/04 ......................................... 2,000,000 BBB 2,091,640
New York State Housing Finance Agency, Service Contract,
Series F, 5.625%, 3/15/09 ............................................. 5,750,000 BBB 5,577,213
New York State Housing Finance Agency Refunding Bonds,
Series A, FSA Insured, 6.1%, 11/1/15 .................................. 4,250,000 AAA 4,302,575
New York State Local Government Assistance Corporation,
Series 1994A, 5.25%, 4/1/19 ........................................... 1,000,000 A 928,990
New York State Medical Care Facility Financing Agency:
Mental Health Center, Series A, 8.875%, 8/15/07 ....................... 395,000 BBB 418,285
North Shore University, Glen Cove, Series A, 5.125%, 11/1/12 (c) ...... 1,450,000 AAA 1,364,479
New York State Mortgage Agency Revenue, Homeowner Mortgage,
Series 44, 6.8%, 10/1/05 .............................................. 1,000,000 AA 1,055,740
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT MARKET
AMOUNT($) RATING(b) VALUE($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York State Mortgage Agency Revenue, Homeowner Mortgage,
Series FF, 7.95%, 10/1/14 ............................................ 250,000 AA 260,700
New York State Power Authority, General Purpose Revenue:
Series 1993 CC, 5.125%, 1/1/11 ........................................ 1,500,000 AA 1,434,945
Series CC, 5.125%, 1/1/11 (c) ......................................... 6,500,000 AAA 6,310,720
New York State Thruway Authority, Service Contract Revenue,
Local Highway and Bridge Building:
5.125%, 4/1/07 ...................................................... 3,000,000 BBB 2,863,920
5.75%, 4/1/08 ....................................................... 1,000,000 BBB 1,000,000
New York State Urban Development Corporation Attica Correctional
Facilities, Series 1995, 6.25%, 4/1/06 ................................ 500,000 BBB 520,335
New York State Urban Development Corporation, State Facilities,
Series 1995, 5.7%, 4/1/09 ............................................. 2,500,000 BBB 2,476,675
New York State Urban Development Corporation Revenue Correctional
Capital Facilities:
Series 1995, 5.375%, 1/1/15 (c) ..................................... 2,000,000 AAA 1,935,460
Series 1995, 5.375%, 1/1/25 (c) ..................................... 4,000,000 AAA 3,812,760
Series 6, 6%, 1/1/04 ................................................ 1,870,000 BBB 1,928,494
Series A, 5.5%, 1/1/14 .............................................. 2,000,000 BBB 1,918,100
New York State Urban Development Corporation Revenue,
Onondaga County Convention Center, 6%, 1/1/06 ......................... 1,630,000 BBB 1,664,621
Niagara County, NY, General Obligation, 7.1%, 2/15/11 (c) ............... 500,000 AAA 583,090
Niagara Falls, NY, Water Treatment Plant:
7%, 11/1/03 (c) ....................................................... 2,260,000 AAA 2,532,511
8.5%, 11/1/05 (c) ..................................................... 2,140,000 AAA 2,649,598
8.5%, 11/1/06 (c) ..................................................... 1,240,000 AAA 1,551,277
Port Authority of New York & New Jersey, Special Obligation,
Series 1996, 7%, 10/1/07 .............................................. 1,500,000 NR 1,593,705
Saint Lawrence County Industrial Development Civic Facility
Revenue-Saint Lawrence University, Series 1996, 5.5%, 7/1/04 (c) ...... 250,000 AAA 259,070
Shenendehowa Central School District, NY, Clifton Park:
6.85%, 6/15/08 (c) .................................................... 350,000 AAA 399,539
6.85%, 6/15/09 (c) .................................................... 350,000 AAA 399,039
Valley Central School District, Montgomery, NY, 7.15%, 6/15/08 (c) ...... 625,000 AAA 729,613
PUERTO RICO
Puerto Rico Commonwealth Infrastructure Finance Authority:
Series A, 7.9%, 7/1/07 ................................................ 1,000,000 BBB 1,078,090
Series A, 7.75%, 7/1/08 ............................................... 920,000 BBB 989,534
</TABLE>
The accompanying notes are an integral part of the financial statements.
20 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT MARKET
AMOUNT($) RATING(b) VALUE($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VIRGIN ISLANDS
Virgin Islands, Special Tax Bonds, Hugo Bonds, 7.75%, 10/1/06 ........... 1,410,000 NR 1,525,451
Virgin Islands Public Finance Authority, General Obligation,
Mortgage Fund Loan Notes, Series A, 7%, 10/1/02 ....................... 500,000 BBB 536,581
- ------------------------------------------------------------------------------------------------------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (Cost $176,387,481) 182,700,273
- ------------------------------------------------------------------------------------------------------------
PURCHASED OPTIONS 0.1% CONTRACTS
- ------------------------------------------------------------------------------------------------------------
Call option on Chicago Board of Trade Municipal Bond Index Future, ------------
strike price 115, expiration date 12/23/96 (Cost $165,063) ............ 100 154,688
------------
- ------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0% (Cost $180,952,544)(a) 187,254,961
- ------------------------------------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $180,952,544. At September 30,
1996, net unrealized appreciation for all securities based on tax cost was
$6,302,417. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $6,878,762 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$576,345.
(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. Unrated securities
(NR) 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.
** 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, 1996.
</TABLE>
The accompanying notes are an integral part of the financial statements.
21 -- Scudder New York Tax Free Fund
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
Statement of Assets and Liabilities
as of September 30, 1996 (Unaudited)
<CAPTION>
<S> <C>
ASSETS
- --------------------------------------------------------------------------------------------------
Investments, at market (identified cost $180,952,544) (Note A) .......... $187,254,961
Receivable for investments sold ......................................... 1,121,160
Interest receivable ..................................................... 3,090,382
Receivable on Fund shares sold .......................................... 1,019,984
Other assets ............................................................ 2,737
------------
Total assets ............................................................ 192,489,224
LIABILITIES
- --------------------------------------------------------------------------------------------------
Payable for investments purchased ....................................... 4,377,080
Dividends payable ....................................................... 259,846
Payable for Fund shares redeemed ........................................ 77,757
Accrued management fee (Note C) ......................................... 95,083
Other accrued expenses (Note C) ......................................... 166,359
------------
Total liabilities ....................................................... 4,976,125
----------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE $187,513,099
----------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation on investments .................................. $ 6,302,417
Accumulated net realized loss ........................................... (9,468,913)
Shares of beneficial interest ........................................... 175,529
Additional paid-in capital .............................................. 190,504,066
----------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE $187,513,099
----------------------------------------------------------------------------------------
NET ASSET VALUE
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per share
($187,513,099/17,552,903 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares ------------
authorized) ........................................................... $10.68
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
Statement of Operations
six months ended September 30, 1996 (Unaudited)
<CAPTION>
<S> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------
Income:
Interest ................................................................ 5,472,167
-----------
Expenses:
Management fee (Note C) ................................................. $ 583,187
Services to shareholders (Note C) ....................................... 85,736
Custodian and accounting fees (Note C) .................................. 48,160
Trustees' fees and expenses (Note C) .................................... 9,103
Auditing ................................................................ 19,037
Reports to shareholders ................................................. 15,859
Legal ................................................................... 3,863
Registration fees ....................................................... 3,130
Other ................................................................... 6,004
-----------
774,079
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 4,698,088
----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------------------------
Net realized loss from:
Investments ............................................................. (1,519,525)
Futures ................................................................. (44,144)
-----------
(1,563,669)
Net unrealized appreciation during the period on investments ............ 1,747,748
-----------
Net gain on investment .................................................. 184,079
----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,882,167
----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED
1996 MARCH 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .......................................... $ 4,698,088 $ 9,538,315
Net realized loss from investment transactions ................. (1,563,669) (514,745)
Net unrealized appreciation on investment transactions ......... 1,747,748 5,871,555
------------ ------------
Net increase in net assets resulting from operations ........... 4,882,167 14,895,125
------------ ------------
Distributions to shareholders from net investment income ....... (4,698,088) (9,538,315)
------------ ------------
Fund share transactions:
Proceeds from shares sold ...................................... 13,107,823 26,487,697
Net asset value of shares issued to shareholders in
reinvestment of distributions ................................ 3,094,867 6,276,457
Cost of shares redeemed ........................................ (20,526,957) (40,000,573)
------------ ------------
Net decrease in net assets from Fund share transactions ........ (4,324,267) (7,236,419)
------------ ------------
DECREASE IN NET ASSETS ......................................... (4,140,188) (1,879,609)
Net assets at beginning of period .............................. 191,653,287 193,532,896
------------ ------------
NET ASSETS AT END OF PERIOD .................................... $187,513,099 $191,653,287
------------ ------------
OTHER INFORMATION
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ...................... 17,964,551 18,645,871
------------ ------------
Shares sold .................................................... 1,239,808 2,462,070
Shares issued to shareholders in reinvestment of distributions . 292,415 585,375
Shares redeemed ................................................ (1,943,871) (3,728,765)
------------ ------------
Net decrease in Fund shares .................................... (411,648) (681,320)
------------ ------------
Shares outstanding at end of period ............................ 17,552,903 17,964,551
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24 -- Scudder New York Tax Free Money Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
The following table includes selected data for a share outstanding throughout each period and other performance information
derived from the financial statements.
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
1996
(UNAUDITED) 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, ------------------------------------------------------------------------------------------------
beginning of period .... $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39 $11.43 $11.19
------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income ... .27 .53 .52 .54 .61 .65 .67 .69 .72 .73 .75
Net realized and
unrealized gain
(loss) on investment
transactions ........... .01 .29 .11 (.35) 1.03 .50 .13 .16 .14 (.84) .39
Total from investment ------------------------------------------------------------------------------------------------
operations ............. .28 .82 .63 .19 1.64 1.15 .80 .85 .86 (.11) 1.14
------------------------------------------------------------------------------------------------
Less distributions:
From net investment
income ................. (.27) (.53) (.52) (.54) (.61) (.65) (.67) (.69) (.72) (.73) (.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 ..... (.27) (.53) (.57) (1.27) (1.22) (.90) (.67) (.78) (.72) (.93) (.90)
------------------------------------------------------------------------------------------------
Net asset value, ------------------------------------------------------------------------------------------------
end of period .......... $10.68 $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39 $11.43
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) ........ 2.63** 7.95 6.39 1.31 15.60 11.11 7.79 8.18 8.55 (.61) 10.71
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end of
period ($ millions) .... 188 192 194 207 201 159 142 132 123 116 154
Ratio of operating
expenses to average
daily net assets (%) ... .83* .82 .82 .82 .82 .87 .91 .89 .89 .95 .88
Ratio of net
investment income
to average daily
net assets (%) ......... 5.01* 4.91 5.13 4.80 5.36 5.96 6.29 6.39 6.89 7.05 6.70
Portfolio turnover
rate (%) ............... 56.2* 80.5 83.8 158.0 201.4 168.2 224.9 114.3 132.1 44.2 71.9
* Annualized
** Not annualized
</TABLE>
25 -- Scudder New York Tax Free Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (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 Funds' 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 Funds in the
preparation of their financial statements.
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 months
ended September 30, 1996, the Tax Free Fund purchased interest rate futures to
manage the duration of the portfolio. Additionally, during the six months ended
September 30, 1996, the Tax Free Fund sold interest rate futures to hedge
against declines in the value of portfolio securities.
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.
OPTIONS. An option contract is a contract in which the writer of the option
grants the buyer of the option the right to purchase from (call option), or sell
to (put option), the writer a designated instrument at a specified price within
a specified period of time. Certain options, including options on indices, will
require cash settlement by the Fund if the option is exercised. During
26 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
the six months ended September 30, 1996, the Tax Free Fund purchased call
options on interest rate futures to manage the duration of the portfolio.
If the Fund writes an option and the option expires unexercised, the Fund will
realize income, in the form of a capital gain, to the extent of the amount
received for the option (the "premium"). If the Fund elects to close out the
option it would recognize a gain or loss based on the difference between the
cost of closing the option of the premium paid. If the Fund elects to close out
the option it would recognize a gain or loss equal to the difference between the
cost of acquiring the option and the amount realized upon the sale of the
option.
The gain or loss recognized by the Fund upon the exercise of a written call or
purchased put option is adjusted for the amount of option premium. If a written
put or purchased call option is exercised the Fund's cost basis of the acquired
security or currency would be the exercise price adjusted for the amount of the
option premium.
The liability representing the Fund's obligation under an exchange traded
written option or investment in a purchased option is valued at the last sale
price or, in the absence of a sale, the mean between the closing bid and asked
price or at the most recent asked price (bid for purchased options) if no bid
and asked price are available. Over-the-counter written or purchased options are
valued using dealer supplied quotations.
When the Fund writes a covered call option, the Fund foregoes, in exchange for
the premium, the opportunity to profit during the option period from an increase
in the market value of the underlying security or currency above the exercise
price. When the Fund writes a put option it accepts the risk of a decline in the
market value of the underlying security or currency below the exercise price.
Over-the-counter options have the risk of the potential inability of
counterparties to meet the terms of their contracts. The Fund's maximum exposure
to purchased options is limited to the premium initially paid. In addition,
certain risks may arise upon entering into option contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out an
option contract prior to the expiration date and, that a change in the value of
the option contract may not correlate exactly with changes in the value of the
securities or currencies hedged.
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, 1996, the Tax Free Money Fund had a net tax basis capital loss
carryforward of approximately $53,000 which may be applied against any realized
net taxable capital gains of each succeeding year until fully utilized or until
March 31, 2000 ($1,000), March 31, 2001 ($2,000), March 31, 2002 ($4,000),
March 31, 2003 ($43,000), and March 31, 2004 ($3,000), the respective
expiration dates, whichever occurs first.
At March 31, 1996, the Tax Free Fund had a net tax basis capital loss
carryforward of approximately $6,317,000 which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until March 31, 2003 ($3,937,000) and March 31, 2004 ($2,380,000), the
respective expiration dates, whichever occurs first.
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.
27 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
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, 1996, purchases and sales of long-term
municipal securities aggregated $55,587,121 and $48,396,602, respectively, for
Tax Free Fund.
The aggregate face value of futures contracts both opened and closed during the
six months ended September 30, 1996 amounted to $50,606,063, 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, 1996, the fee for Tax Free Fund pursuant to the
Agreement amounted to $583,187, which was equivalent to an annual effective rate
of .62% of the Fund's average daily net assets.
28 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
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, 1997 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, 1996, the
Adviser did not impose a portion of its fee amounting to $70,832, and the
portion imposed amounted to $73,239.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records for the Tax Free Money Fund and Tax
Free Fund. For the six months ended September 30, 1996, SFAC imposed fees
amounting to $15,000 and $26,195 of which $2,500 and $4,415 are unpaid at
September 30, 1996 for the Tax Free Money Fund and Tax Free Fund, respectively.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend-paying and shareholder service agent for the Funds. For the
six months ended September 30, 1996, $29,243 and $58,503 were charged by SSC to
Tax Free Money Fund and Tax Free Fund, of which $4,872 and $9,646 were unpaid at
September 30, 1996, 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,
1996, Trustees' fees aggregated $7,859 and $9,103 for both the Tax Free Money
Fund and Tax Free Fund, respectively.
29 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds
- --------------------------------------------------------------------------------
Money Market
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
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 California Tax Free Fund*
Scudder High Yield Tax Free Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term
Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder Medium Term Tax Free Fund
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Income
Scudder Emerging Markets Income Fund
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Bond Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Growth
Scudder Capital Growth Fund
Scudder Classic Growth Fund
Scudder Development Fund
Scudder Emerging Markets Growth Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Micro Cap Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder 21st Century Growth Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
- --------------------------------------------------------------------------------
IRAs
Keogh Plans
Scudder Horizon Plan*+++ (a variable annuity)
401(k) Plans
403(b) Plans
SEP-IRAs
Profit Sharing and Money Purchase
Pension Plans
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.
Institutional Cash Management
- --------------------------------------------------------------------------------
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(TM)++
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.
30-Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
How to Contact Scudder
Account Service and Information
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291
Visit the Scudder World Wide Web Site at:
- --------------------------------------------------------------------------------
http://funds.scudder.com
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 New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale
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.
* 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.
31-Scudder New York Tax Free Money Fund
Scudder New York 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.
