Scudder
New York
Tax Free Money Fund
Scudder
New York
Tax Free Fund
Semiannual Report
September 30, 1997
Pure No-Load(TM) Funds
For investors seeking triple-tax-free income exempt from New York state and New
York City personal income taxes and regular federal income taxes.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Funds' President
Scudder New York
Tax Free Money Fund
6 Portfolio Management Discussion
11 Investment Portfolio
14 Financial Statements
17 Financial Highlights
Scudder New York
Tax Free Fund
4 Performance Update
5 Portfolio Summary
7 Portfolio Management Discussion
18 Investment Portfolio
23 Financial Statements
26 Financial Highlights
10 Glossary of Investment Terms
27 Notes to Financial Statements
32 Officers and Trustees
33 Investment Products and Services
34 Scudder Solutions
In Brief
Scudder New York
Tax Free Money Fund
o Scudder New York Tax Free Money Fund offered a seven-day effective yield of
3.29% on September 30, 1997, equivalent to a 5.85% 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 4.26% 30-day net annualized SEC
yield on September 30, 1997. For shareholders subject to the 43.74% maximum
combined federal and state income tax rate, the Fund's yield was equal to a
taxable yield of 7.57%.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
30-Day Net Annualized SEC Yield
on September 30, 1997
BAR CHART DATA:
Taxable yield
Scudder New York needed to equal
Tax Free Fund the Fund's yield
------------- ----------------
4.26% 7.57%
2 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Letter from the Funds' President
Dear Shareholders,
We are pleased to report to you on Scudder New York Tax Free Fund's
performance over its most recent semiannual period ended September 30, 1997. The
Fund posted a 4.26% 30-day net annualized SEC yield as of September 30,
equivalent to a taxable yield of 7.57% for investors in the top New York tax
bracket. In addition, the Fund earned a total return of 7.29% for the six months
ended September 30.
Scudder New York Tax Free Money Fund posted a 5.85% tax equivalent yield
based on the maximum federal and state tax rates at the close of the period.
Please read the portfolio management discussions beginning on page 6 for more
information.
For those interested in other offerings from Scudder, we would like to take
this opportunity to tell you about a recent addition to Scudder's family of
funds -- Scudder International Growth and Income Fund. The Fund employs a
yield-oriented approach to international investing and seeks to provide
long-term growth of capital plus current income. Investors who desire exposure
to overseas equities but who wish to take a more conservative approach to
international investing may appreciate the Fund's emphasis on the dividend
paying stocks of established companies listed on foreign exchanges. For a
complete listing of Scudder's mutual fund offerings, see page 33.
Please call a Scudder Investor Information representative at 1-800-225-2470
if you have questions about your account or any Scudder fund. Page provides more
information on how to contact Scudder. Thank you for choosing Scudder's New York
Tax Free Funds to help meet your investment needs.
Sincerely,
/s/David S. Lee
David S. Lee
President,
Scudder New York Tax Free 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, 1997
- -------------------------------------------
Fund Index Comparisons
- -------------------------------------------
Total Return
- -------------------------------------------
Period Ended Growth of Average
9/30/97 $10,000 Cumulative Annual
- -------------------------------------------
Scudder New York Tax Free Fund
Ticker Symbol: SCYTX
- -------------------------------------------
1 Year $10,952 9.52% 9.52%
5 Year $13,959 39.59% 6.90%
10 Year $22,790 127.90% 8.59%
- -------------------------------------------
Lehman Brothers Municipal Bond Index
- -------------------------------------------
1 Year $10,904 9.04% 9.04%
5 Year $14,140 41.40% 7.17%
10 Year $23,182 131.82% 8.76%
- -------------------------------------------
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
- ---------------------
'87 $10,000
'88 $11,236
'89 $12,242
'90 $12,697
'91 $14,589
'92 $16,326
'93 $18,725
'94 $17,809
'95 $19,755
'96 $20,809
'97 $22,790
Lehman Brothers Municipal
Bond Index
Year Amount
- ---------------------
'87 $10,000
'88 $11,296
'89 $12,227
'90 $13,113
'91 $14,842
'92 $16,395
'93 $18,484
'94 $18,033
'95 $20,051
'96 $21,260
'97 $23,182
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>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
--------------------------------------------------------------------------------
Net Asset Value $10.52 $10.73 $10.36 $11.06 $11.36 $11.60 $10.10 $10.65 $10.68 $11.14
Income Dividends $ .73 $ .71 $ .68 $ .66 $ .64 $ .58 $ .53 $ .52 $ .53 $ .52
Capital Gains and
Other Distributions $ -- $ -- $ .09 $ .13 $ .32 $ .75 $ .44 $ -- $ -- $ .01
Fund Total
Return (%) 12.36 8.95 3.72 14.90 11.91 14.69 -4.89 10.92 5.34 9.52
Index Total
Return (%) 12.98 8.68 6.80 13.19 10.45 12.74 -2.44 11.18 6.04 9.04
</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, 1997
- -------------------------------
Diversification
- -------------------------------
Core Cities/Lease 19%
Higher Education 11%
County General
Obligation/Lease 11%
Water/Sewer Revenue 10%
State General Obligation 9%
Other General
Obligation/Lease 8%
Hospital/Health 7%
Pollution Control/
Industrial Development 6%
Sales/Special Tax 6%
Miscellaneous Municipal 13%
- -------------------------------
100%
- -------------------------------
The Fund continues to invest in
a broad selection of New York
municipal bonds, including
city-issued general obligation
or lease bonds, higher education
bonds, and county-issued general
obligation or lease bonds.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- ------------------------------
Quality
- ------------------------------
AAA 47%
AA 8%
A 13%
BBB 19%
Not Rated 13%
- ------------------------------
100%
- ------------------------------
Weighted average quality: AA
Overall portfolio quality remains
high, with over 65% of portfolio
securities rated A or better.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- ------------------------------
Effective Maturity
- ------------------------------
1-5 years 5%
5-10 years 45%
10-15 years 34%
Greater than 15 years 16%
- ------------------------------
100%
- ------------------------------
Weighted average effective maturity:
11.03 years
We continue to focus on the purchase
of noncallable bonds with maturities
of 15 years or less as a means of
locking in a substantial income
stream for the Fund over time.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
For more complete details about the Fund's investment portfolio, see page 18.
5 - Scudder New York Tax Free Fund
<PAGE>
Portfolio Management Discussion
Scudder New York Tax Free Money Fund
Dear Shareholders,
During the six-month period ended September 30, 1997, New York tax-free money
market securities enjoyed a period of relative stability as the Federal Reserve
stayed on the sidelines, refraining from raising interest rates. Continued low
U.S. inflation and a lack of strong supply or demand pressure also contributed
to the calm market environment. During this period, New York tax-exempt one-year
notes offered the most attractive value, offering yields as high as any
available nationally. Our strategy was to purchase New York tax-exempt one-year
notes and balance them with shorter-term securities to lock in attractive yields
without overextending the Fund's average maturity (55 days as of September 30,
1997).
The Fund's 7-day effective yield as of September 30 was 3.29%. For investors in
the highest combined state and federal income tax bracket, the Fund's yield
equaled a 5.85% compounded taxable yield, higher than the 5.02% average for
taxable money funds, according to IBC Financial Data, Inc., an independent firm
that tracks money fund performance. The Fund provided a total return of 1.56%
for the six month period ended September 30, assuming reinvestment of all income
distributions, which totaled $0.015 per share during the most recent semiannual
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,
For the six months ended September 30, 1997, Scudder New York Tax Free Fund
posted a strong 7.29% total return as bonds continued to rack up solid gains. As
some analysts proclaimed a "New Era" of noninflationary growth, the bond market
inched its way upward, as any one statistical announcement that might imply a
resurgence of inflation was met by two others that more than allayed such fears.
The Fund's 7.29% total return for the period consisted of a $0.51 increase in
net asset value to $11.14, and income distributions of $0.26 per share. This
return outpaced the 6.53% average of 96 similar funds tracked by Lipper over the
six-month period. As shown in the chart below, the Fund's average annual total
returns also exceeded the average return of its peer group for one-, three-,
five-, and ten-year periods ended September 30, 1997.
On September 30, 1997, the Fund's 30-day net annualized SEC yield was 4.26%,
equivalent to a taxable yield of 7.57% for shareholders subject to the 43.74%
maximum combined state and federal income tax rate. The Fund's tax equivalent
yield is significantly higher than current yields available from taxable
investments of similar maturity and credit quality.
Consistently Exceeding the Averages
(Average annual returns for periods ended September 30,
1997)
-------------------------------------------------------
Scudder Lipper Number
New York average of
Tax Free Fund annual Funds
Period return return Rank tracked
-------------------------------------------------------
1 Year 9.52% 8.47% 10 of 92
3 Years 8.57% 7.87% 17 of 69
5 Years 6.90% 6.42% 13 of 44
10 Years 8.59% 8.32% 13 of 27
Past performance does not guarantee future results.
New York Update
The State of New York finally passed a budget for its 1998 fiscal year on August
4, 1997, the State's thirteenth consecutive late budget. Despite the delay, New
York continues to benefit from the strength of the local and national economies.
As expected, the State finished its 1997 fiscal year with a General Fund surplus
of $1.4 billion, or 4% of revenues. Higher than expected income tax revenues and
lower than expected social service costs accounted for the surplus. New York
used almost $900 million of the surplus to finance expenditures in the 1998
budget. The State's budget for its 1998 fiscal year projects General Fund
expenditures to total $34.6 billion, a 5% increase over the previous year. New
7 - Scudder New York Tax Free Fund
<PAGE>
York's ability to limit expenditure growth has helped to rein in previously
anticipated budget gaps.
New York State's economy continues to grow at a modest rate, below that of the
national economy. The State's unemployment rate through August was 6.5%,
compared with the national average of 5%. Currently, the underlying strength of
New York's economy is represented by the financial, insurance, and real estate
sectors, though they make up only 9% of the State's employment market and are
experiencing minimal job growth. In addition, financial companies on Wall Street
have been reaping tremendous profits, resulting in higher salaries and even
higher year-end bonuses for their employees. In 1996 the State's per capita
income was $26,782, 18% higher than the national average.
The State's debt burden is high; its annual debt service obligation is over $2
billion per year, with debt per capita of $2,922, or 61% above the national
average. Due to the size of the State's budget and its high wealth levels,
however, we believe that the current and proposed debt burden is within the
means of the State.
Intermediate Noncallable Bonds Still a Focus
As a means of locking in a substantial income stream for Scudder New York Tax
Free Fund over time, we continue to focus on the purchase of noncallable bonds
with maturities of 15 years or less. As of September 30, over 80% of the Fund's
securities had maturities in this range. We also continue to look for
opportunities to add high yielding BBB-rated and non-rated bonds to the
portfolio. Higher yielding bonds, while carrying some additional credit risk,
generally exhibit less interest rate sensitivity than municipal bonds rated A or
above. The Fund held 32% of its assets in bonds in these two categories as of
the end of September. (For a summary of the Fund's quality, diversification, and
maturity structure, see page 5.)
Overall portfolio quality remains high, with over 65% of portfolio securities
rated A or better at the close of the period. We continue to invest in a broad
selection of New York municipal bonds, including city-issued general obligation
or lease bonds, higher education bonds, and county-issued general obligation or
lease bonds.
The Fund seeks to provide investors with a competitive level of federal and
state tax-exempt income as well as the best possible total return performance.
Our long-term investment strategy focuses on four basic elements: (1) purchasing
bonds with effective maturities of less than 20 years; (2) purchasing
noncallable bonds at yields close to those of callable bonds with comparable
maturities; (3) purchasing high-yielding callable bonds, and (4) diversifying
investments based on careful credit selection.
Outlook
As a rising stock market continued to shatter records, the past six months also
witnessed increased activity in the bond market, as large and small investors
seeking additional diversification rebalanced their portfolios by adding bonds.
Amid Federal Reserve Chairman Greenspan's warnings about wage pressures, the
shrinking supply of labor, and the possible runout of the "peace dividend," it's
8 - Scudder New York Tax Free Fund
<PAGE>
difficult to predict whether the Fed will continue to refrain from raising
interest rates in the near future and whether the currently favorable economic
and market conditions will prevail over the coming months. We do know, however,
that yields and prices of municipal bonds are currently attractive compared with
Treasuries, and that the continued low level of U.S. inflation -- aided by
business' strong investment in technological advances as well as subdued
economic activity in much of the rest of the world -- is a boon to investors.
Over the coming months we will continue our focus on bonds with favorable call
structures as well as search for high yield bonds that meet our credit
standards. We will also continue to purchase premium noncallable intermediate
maturity bonds and to pay close attention to credit quality as we pursue
double-tax-free income and competitive total return 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>
Glossary of Investment Terms
BOND An interest-bearing security issued by the
federal, state, or local government or a
corporation that obligates the issuer to pay the
bondholder a specified amount of interest for a
stated period -- usually a number of years -- and
to repay the face amount of the bond at its
maturity date.
GENERAL OBLIGATION BOND A municipal bond backed by the "full faith and
credit" (including the taxing and further
borrowing power) of the city, state, or agency
that issues the bond. A general obligation bond is
repaid with the issuer's general revenue and
borrowings.
INFLATION An overall increase in the prices of goods and
services, as happens when business and consumer
spending increases relative to the supply of goods
available in the marketplace -- in other words,
when too much money is chasing too few goods. High
inflation has a negative impact on the prices of
fixed-income securities.
MUNICIPAL BOND An interest-bearing debt security issued by a
state or local government entity.
NET ASSET VALUE (NAV) The price per share of a mutual fund based on the
sum of the market value of all the securities
owned by the fund divided by the number of
outstanding shares.
TAXABLE EQUIVALENT YIELD The level of yield a fully taxable instrument
would have to provide to equal that of a tax-free
municipal bond on an after-tax basis.
30-DAY SEC YIELD The standard yield reference for bond funds, based
on a formula prescribed by the SEC. This
annualized yield calculation reflects the 30-day
average of the income earnings of every holding in
a given fund's portfolio, net of expenses,
assuming each is held to maturity.
TOTAL RETURN The most common yardstick to measure the
performance of a fund. Total return -- annualized
or compound -- is based on a combination of share
price changes plus income and capital gain
distributions, if any, expressed as a percentage
gain or loss in value.
(Sources: Scudder; Barron's Dictionary of Finance and Investment Terms)
10 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Investment Portfolio as of September 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal Credit Value ($)
Amount ($) Rating (b) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal Investments 100.0%
- ------------------------------------------------------------------------------------------------------------------------------
New York
Albany, NY, Industrial Development Authority, Davies Office Refurbishing,
Series 1997,Weekly Demand Note, 4.15%, 2/01/17* .............................. 2,300,000 A1 2,300,000
Erie County, NY, Water Authority, Waterworks Revenue, Weekly Demand Bonds,
4.05%, 12/01/16 (c)* ......................................................... 2,000,000 A1+ 2,000,000
Freeport Union Free School District, NY, Tax Anticipation Note, 4.25%, 6/29/98 . 1,500,000 SSC 1,502,678
Monroe County, NY, Industrial Development Agency, Office Building Associates,
Series 1992, Weekly Demand Note, 4.05%, 10/01/00* ............................ 1,499,000 P1 1,499,000
Municipal Assistance Corp. for the City of New York:
4.5%, 7/01/98 ................................................................ 1,500,000 AA 1,507,070
Series K1, Weekly Demand Note, 4.05%, 7/01/08* ............................... 2,000,000 A1+ 2,000,000
Tax Exempt Commercial Paper, 3.55%, 10/24/97 ................................. 1,500,000 VMIG1 1,500,000
Nassau County, NY, Bond Anticipation Note, Series 1997 C, 4.25%, 3/17/98 ....... 1,500,000 MIG1 1,503,384
New York City, Tax Exempt Commercial Paper, General Obligation:
3.7%, 10/15/97 ............................................................... 2,000,000 A1 2,000,000
3.75%, 1/12/98 ............................................................... 2,400,000 A1+ 2,400,000
3.75%, 1/22/98 ............................................................... 1,000,000 A1+ 1,000,000
New York City, Industrial Development Agency, Korean Airlines, Series 1997 A,
Weekly Demand Note, 4.1%, 11/01/24* .......................................... 2,000,000 VMIG1 2,000,000
New York State, Tax Exempt Commercial Paper:
3.55%, 11/18/97 .............................................................. 1,000,000 A1+ 1,000,000
3.7%, 12/11/97 ............................................................... 1,500,000 A1+ 1,500,000
New York State Dormitory Authority, Memorial Sloan-Kettering Cancer Center,
Tax Exempt Commercial Paper, 3.75%, 11/10/97 ................................. 1,500,000 A1+ 1,500,000
New York State Energy Research and Development Authority:
Daily Demand Note, 3.7%, 10/01/29* ........................................... 200,000 A1+ 200,000
PCR, Niagara Mohawk Power Co., Daily Demand Note, 4.1%, 7/01/27* ............. 200,000 A1+ 200,000
Rochester Gas and Electric Company, Monthly Reset Bonds, 4.5%, 10/01/14* ..... 1,000,000 SSC 1,000,000
New York State Environmental Facilities Corp., Tax Exempt Commercial Paper,
3.7%, 11/18/97 ............................................................... 1,000,000 A1+ 1,000,000
New York State Housing Finance Agency:
Hospital for Special Surgery, Variable Rate Demand Bonds, 3.7%, 11/01/10* .... 2,200,000 VMIG1 2,200,000
Housing Revenue Bonds, Liberty View Apartments Project, Weekly Demand Bond,
3.75%, 11/01/05* .......................................................... 1,200,000 VMIG1 1,200,000
Normandie Court 1 Housing Revenue, Variable Rate Demand Bond, 4%,
5/15/15* .................................................................. 1,900,000 VMIG1 1,900,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 - Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Credit Value ($)
Amount ($) Rating (b) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York State Job Development Authority:
Monthly Reset Bonds, Series 1985 C, 3.75%, 3/01/00* .......................... 890,000 VMIG1 890,000
Special Purpose:
Series A1-42, Daily Demand Note, 4%, 3/01/05* ............................... 400,000 VMIG1 400,000
Series B1-21, Daily Demand Note, 4%, 3/01/05* ............................... 500,000 VMIG1 500,000
Variable Rate Demand Bond, Series F, 3.8%, 3/01/99* .......................... 590,000 VMIG1 590,000
New York State Local Government Assistance Corporation, Series 1993 A,
Weekly Demand Note, 3.95%, 4/01/22* .......................................... 1,000,000 VMIG1 1,000,000
New York State Medical Care Facilities, Finance Agency, Children's Hospital of
Buffalo, Variable Rate Weekly Demand Bond, 4%, 11/01/05* ..................... 2,500,000 VMIG1 2,500,000
New York State Pollution Control Revenue, Orange & Rockland Energy Research and
Development Project, Weekly Demand Notes, 4.05%, 10/01/14* ................... 2,100,000 VMIG1 2,100,000
Onondaga County, NY, Industrial Development Agency, Southern Container Corp.,
Variable Rate Weekly Demand Note, 4.15%, 8/01/07* ............................ 1,500,000 SSC 1,500,000
Port Authority of New York & New Jersey, Tax Exempt Commercial Paper:
3.65%, 10/21/97 .............................................................. 1,000,000 A1+ 1,000,000
3.65%, 12/15/97 .............................................................. 1,340,000 A1+ 1,340,000
Rochester, NY, Bond Anticipation Note, Series 111, 1996, 4.5%, 10/30/97 ........ 1,000,000 SSC 1,000,574
Schenectady, NY, 3.85%, 6/01/09* ............................................... 2,070,000 P1 2,070,000
Seneca County, NY, Industrial Development Agency, 1991 Civic Facility, New York
Chiropractic College, Weekly Demand Bond, 4%, 10/01/21* ...................... 500,000 A1+ 500,000
Triborough Bridge and Tunnel Authority, NY, Special Obligation, Variable Rate
Demand Bonds, 4.05%, 1/01/24 (c)* ............................................ 3,000,000 VMIG1 3,000,000
Tuxedo Park, NY, Bond Anticipation Note, Series 1996 B, 4.25%, 12/18/97 ........ 1,611,000 SSC 1,612,990
Ulster County, NY, Bond Anticipation Note, 4.5%, 5/15/98 ....................... 1,908,000 SSC 1,912,537
West Babylon Union Free School District, NY, Tax Anticipation Note, 4.25%,
6/25/98 ...................................................................... 1,500,000 SSC 1,503,161
- ------------------------------------------------------------------------------------------------------------------------------
Total Municipal Investments (Cost $56,331,394) 56,331,394
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0% (Cost $56,331,394) (a) 56,331,394
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 - Scudder New York Tax Free Money Fund
<PAGE>
- --------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $56,331,394.
(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.
13 - Scudder New York Tax Free Money Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of September 30, 1997 (Unaudited)
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at value (identified cost $56,331,394) .............. $ 56,331,394
Cash ............................................................. 41,090
Receivable on investments sold ................................... 250,405
Interest receivable .............................................. 376,912
Receivable on Fund shares sold ................................... 167,901
Reimbursement from Adviser ....................................... 69,519
Other assets ..................................................... 1,565
----------------
Total assets ..................................................... 57,238,786
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ................................. 140,053
Dividends payable ................................................ 18,299
Accrued management fee ........................................... 82,275
Other payables and accrued expenses .............................. 36,192
----------------
Total liabilities ................................................ 276,819
--------------------------------------------------------------------------------------------
Net assets, at value $ 56,961,967
--------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized loss .................................... (52,501)
Paid-in capital .................................................. 57,014,468
--------------------------------------------------------------------------------------------
Net assets, at value $ 56,961,967
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($56,961,967 / 56,965,637 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares ----------------
authorized) ................................................... $1.00
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder New York Tax Free Money Fund
<PAGE>
Statement of Operations
six months ended September 30, 1997 (Unaudited)
<TABLE>
<S> <C>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------
Income:
Interest ......................................................... $ 1,104,295
-----------------
Expenses:
Management fee ................................................... 149,292
Services to shareholders ......................................... 41,717
Custodian and accounting fees .................................... 22,507
Trustees' fees and expenses ...................................... 6,954
Auditing ......................................................... 12,267
Reports to shareholders .......................................... 6,400
Registration fees ................................................ 2,611
Legal ............................................................ 2,926
Other ............................................................ 4,537
-----------------
Total expenses before reductions ................................. 249,211
Expense reductions ............................................... (69,519)
-----------------
Expenses, net .................................................... 179,692
---------------------------------------------------------------------------------------------
Net investment income 924,603
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 924,603
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15 - Scudder New York Tax Free Money Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
September 30, Year Ended
1997 March 31,
Increase (Decrease) in Net Assets (Unaudited) 1997
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ....................................... $ 924,603 $ 1,613,526
---------------- ---------------
Distributions to shareholders from net investment income .... (924,603) (1,613,526)
---------------- ---------------
Fund share transactions at net asset value of $1.00 per share:
Proceeds from shares sold ................................... 28,455,439 52,781,839
Net asset value of shares issued to shareholders in
reinvestment of distributions ............................ 793,328 1,405,013
Cost of shares redeemed ..................................... (31,825,452) (53,062,079)
---------------- ---------------
Net increase (decrease) in net assets from Fund share
transactions ............................................. (2,576,685) 1,124,773
---------------- ---------------
Increase (decrease) in net assets ........................... (2,576,685) 1,124,773
Net assets at beginning of period ........................... 59,538,652 58,413,879
---------------- ---------------
Net assets at end of period ................................. $59,961,967 $59,538,652
---------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 - Scudder New York Tax Free Money 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
May 28, 1987
Six Months (commencement
Ended of
September 30, operations)
1997 Years Ended March 31, to March 31,
(Unaudited) 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $1.000
--------------------------------------------------------------------------------------------------------
Net investment
income ............. .015 .028 .031 .025 .017 .022 .035 .046 .052 .047 .033
Distributions from
net investment
income ............. (.015) (.028) (.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 $1.000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) .. 1.56** 2.85 3.18 2.57 1.75 2.22 3.55 4.69 5.33 4.78 3.33**
Ratios and Supplemental
Data
Net assets, end of
period
($ millions) ....... 57 60 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 .60 .53 .50*
Ratio of operating
expenses before
expense reductions,
to average daily net
assets (%) ......... .83* .85 .86 .89 .97 .97 1.01 1.08 1.08 .98 1.19*
Ratio of net investment
income to average
daily net
assets (%) ......... 3.09* 2.81 3.13 2.56 1.73 2.19 3.46 4.57 5.21 4.76 4.08*
</TABLE>
(a) Total returns would have been lower had certain expenses not been reduced.
* Annualized
** Not annualized
17 - Scudder New York Tax Free Money Fund
<PAGE>
Investment Portfolio as of September 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal Credit Market
Amount ($) Rating (b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Short-Term Municipal Investments 0.1%
New York
New York City, NY, General Obligation, Series A-4, Daily Demand Note, -----------
3.8%, 8/01/22* (Cost $200,000) ............................................... 200,000 VMIG1 200,000
-----------
Long-Term Municipal Investments 99.9%
- ------------------------------------------------------------------------------------------------------------------------------
New York
34th Street Partnership Inc., NY, Capital Improvement, 5.5%, 1/01/14 ........... 1,900,000 A 1,903,192
Albany County Airport Revenue:
Series 1997, 5.375%, 12/15/17 (c) ............................................ 1,000,000 AAA 984,780
Series 1997, 5.5%, 12/15/19 (c) .............................................. 1,000,000 AAA 994,830
Albany, NY, General Obligation, 7%, 1/15/08 (c) ................................ 485,000 AAA 522,486
Canandaigua, NY, School District, General Obligation:
6.4%, 6/01/08 ................................................................ 500,000 AAA 571,995
6.5%, 6/01/11 ................................................................ 550,000 AAA 637,478
Chautauqua County, NY:
7.3%, 4/01/08 (c) ............................................................ 575,000 AAA 699,413
7.3%, 4/01/09 (c) ............................................................ 575,000 AAA 703,794
Series 1990, 7.3%, 4/01/07 (c) ............................................... 465,000 AAA 560,218
Series 1990, 6.4%, 9/15/08 (c) ............................................... 520,000 AAA 596,466
Dutchess County, NY, Res Rec, 7.5%, 1/01/09 (c) ................................ 1,000,000 AAA 1,084,730
Erie County, New York, Public Improvement General Obligation Unlimited,
Series 1992, 6.125%, 1/15/12 (c) ............................................. 590,000 AAA 661,012
Glen Cove HSB Authority, 8.25%, 10/01/26 ....................................... 1,500,000 NR 1,604,580
Inverse Variable Rate Certificate Trust, Metropolitan Transit Authority,
Series 1993 B, 5.51%, 6/30/02** .............................................. 8,000,000 NR 8,630,000
Islip New York Community Development Agency, 7.5%, 3/01/26 ..................... 4,000,000 NR 4,274,680
Jamestown, New York, General Obligation:
Series 1991 A, 7%, 3/15/07 (c) ............................................... 725,000 AAA 857,827
Series 1991 A, 7%, 3/15/08 (c) ............................................... 600,000 AAA 714,618
Monroe County, NY, General Obligation:
Series 1996, 6%, 6/01/06 ..................................................... 500,000 AA 554,450
Unlimited, Series 1996, 6%, 3/01/13 .......................................... 1,050,000 AA 1,165,479
Unlimited, Series 1996, 6%, 3/01/14 .......................................... 1,040,000 AA 1,153,027
Unlimited, Series 1996, 6%, 3/01/17 .......................................... 1,410,000 AA 1,555,949
Municipal Assistance Corp. for New York City Revenue, Series I, 6.25%, 7/01/07 . 1,575,000 AA2 1,770,662
</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>
Nassau County, NY, General Obligation:
Series A, 6%, 7/01/11 ........................................................ 1,000,000 AAA 1,106,920
Series 1993G, 5.4%, 1/15/10 .................................................. 1,655,000 AAA 1,735,284
New York City Municipal Assistance Corp. NC Series 1996E, 6%, 7/01/05 .......... 2,500,000 AA 2,737,800
New York City Housing Authority, Multi-family Revenue:
Series A, 5.35%, 7/01/07 ..................................................... 500,000 A 506,400
Series A, 5.65%, 7/01/10 ..................................................... 1,000,000 A 1,022,330
New York City Municipal Water Finance Authority, Water & Sewer System:
Series A, 5.125%, 6/15/21 .................................................... 1,000,000 A 951,840
1993 Series A, 5.875%, 6/15/13 (c) ........................................... 2,750,000 AAA 3,000,030
New York City, Industrial Development Agency, Civil Facility Revenue:
Civil Facilities, USTA National Tennis Center:
6.1%, 11/15/04 (c) .......................................................... 1,215,000 AAA 1,330,753
6.25%, 11/15/06 (c) ......................................................... 3,000,000 AAA 3,344,910
Japan Air Lines, Series 1996, 6%, 11/01/15 (c) ............................... 1,000,000 AAA 1,050,410
Visy Paper Inc. Project, Series 1995, 7.95%, 1/01/28 ......................... 2,250,000 NR 2,543,873
YMCA Greater New York Project:
Series 1997, 5.85%, 8/01/08 ................................................. 600,000 BBB 632,562
Series 1997, 6%, 8/01/06 .................................................... 580,000 BBB 618,837
Series 1997, 5.8%, 8/01/16 .................................................. 1,000,000 BBB 1,015,350
New York City, NY, General Obligation:
6.25%, 4/15/07 (c) ........................................................... 2,000,000 AAA 2,232,860
7.25%, 8/15/07 ............................................................... 2,250,000 AAA 2,635,403
6%, 4/15/09 (c) .............................................................. 2,000,000 A 2,134,460
NC Series 1996 A, 6.25%, 8/01/09 ............................................. 5,175,000 BBB 5,612,598
Series 1994 B, 7.3%, 8/15/10 ................................................. 45,000 A 51,530
Series 1996 A, 7%, 8/01/05 ................................................... 5,000,000 BBB 5,683,000
Series 1996 A, 7%, 8/01/06 ................................................... 5,000,000 BBB 5,726,000
Series B, 8.25%, 6/01/06 ..................................................... 2,750,000 A 3,379,200
Series B, 7.5%, 2/01/05 ...................................................... 2,500,000 A 2,787,550
Series E, 8%, 8/01/05 (c) .................................................... 330,000 AAA 403,333
Series L, 5.625%, 8/01/07 .................................................... 4,000,000 A 4,182,600
New York State Dormitory Authority:
City University NC, 5.625%, 7/01/16 .......................................... 2,750,000 BBB 2,835,278
City University System Series 1995 A, 5.625%, 7/01/16 (c) .................... 1,100,000 AAA 1,166,352
College and University Pooled Capital Program, 7.8%,12/01/05 (c) ............. 3,220,000 AAA 3,421,958
</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>
Columbia University NY, Revenue, 6%, 7/01/10 ................................. 1,000,000 BAA 1,065,170
FSA Lease Revenue, 5.5%, 5/15/24 (c) ......................................... 1,000,000 AAA 999,930
Ithaca College, Series 1997, 5.25%, 7/01/26 (c) .............................. 2,000,000 AAA 1,953,420
Nyack Hospital:
Series 1996, 6.25%, 7/01/13 ................................................. 500,000 BAA 523,220
NC Series 1996, 6%, 7/01/06 ................................................. 1,000,000 BAA 1,059,920
Revenue:
6.5%, 5/15/06 ............................................................... 2,000,000 BBB 2,224,240
5.75%, 7/01/09 .............................................................. 1,000,000 AAA 1,085,430
6.5%, 2/15/10 ............................................................... 1,500,000 A 1,690,860
6.5%, 2/15/11 ............................................................... 1,000,000 A 1,128,230
6%, 2/15/12 2,500,000 A 2,697,925
Columbia University, 5%, 7/01/15 ............................................ 2,500,000 AAA 2,447,975
Mental Health Services Facilities Series 1997 B, 5.625%, 2/15/21 ............ 500,000 AAA 503,935
Mentefiore Medical Center:
Series 1996, 6%, 8/01/08 (c) .............................................. 2,000,000 AAA 2,211,480
Series 1996, 6%, 2/01/09 (c) .............................................. 2,000,000 AAA 2,209,640
Mt. Sinai School of Medicine, Series B, 5.7%, 7/01/11 (c) ................... 1,825,000 AAA 1,971,584
Pace University:
6.5%, 7/01/08 (c) ......................................................... 1,360,000 AAA 1,564,666
6.5%, 7/01/09 (c) ......................................................... 555,000 AAA 641,652
Rochester Institute of Technology, 5.25%, 7/01/22 (c) ....................... 1,925,000 AAA 1,880,513
Saint Josephs Hospital, Series 1997, 5.25%, 7/01/18 (c) ..................... 1,000,000 AAA 980,110
State University Educational Facility:
Series A, 7.125%, 5/15/09 ................................................. 25,000 BBB 26,493
Series A, 5.875%, 5/15/11 ................................................. 2,250,000 BBB 2,415,015
Upstate Community College, 5.8%, 7/01/06 .................................... 1,075,000 BBB 1,143,101
State University Series 1993 A, 5.875%, 5/15/11 (c) .......................... 380,000 AAA 415,697
New York State Environmental Facilities Corporation:
NC Series 1994, 5.75%, 6/15/10 ............................................... 1,750,000 AA 1,879,028
State Water Revolving Fund, Series D, 6.9%, 5/15/15 .......................... 1,655,000 AAA 1,901,297
Special Obligation Revenue, Riverbank State Park:
Series 1996, 6.25%, 4/01/07 ................................................. 2,055,000 AAA 2,305,237
Series 1996, 6.25%, 4/01/08 ................................................. 2,185,000 AAA 2,463,216
New York State Health Facilities Authority, 6.375%, 11/01/04 ................... 2,000,000 BBB 2,189,740
New York State Medical Care Facilities Finance Agency, Mental Health Center,
Series A, 8.875%, 8/15/07 .................................................... 160,000 BBB 163,877
</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>
New York State Mortgage Agency Revenue:
Homeowner Mortgage, Series FF, 7.95%, 10/01/14 ............................... 250,000 AA 255,495
Series 1994, 6.8%, 10/01/05 .................................................. 1,000,000 AA 1,060,680
New York State Throughway Authority General Revenue, Capital Appreciation
Special Obligation, Series 1991 A, 1/01/06 ................................... 2,905,000 NR 1,927,932
New York State Urban Development Corp. Revenue:
5.7%, 4/01/09 ................................................................ 4,250,000 AAA 4,604,663
5.5%, 1/01/14 ................................................................ 2,000,000 AAA 2,101,080
Correctional Capital Facilities, NC Series 95, 5.375%, 1/01/15 (c) ........... 2,000,000 AAA 2,011,580
Series 1996 A, 6.25%, 4/01/05 (c) ............................................ 1,375,000 AAA 1,521,259
Niagara County, NY, General Obligation, 7.1%, 2/15/11 (c) ...................... 500,000 AAA 607,510
Niagara Falls, NY, Water Treatment Plant:
7%, 11/01/03 (c) ............................................................. 2,260,000 AAA 2,568,061
8.5%, 11/01/05 (c) ........................................................... 2,140,000 AAA 2,685,786
8.5%, 11/01/06 (c) ........................................................... 1,240,000 AAA 1,582,476
Orange County, NY, Series 1997, 5.125%, 9/01/14 ................................ 2,000,000 AA2 1,998,340
Oswego County, NY, General Obligation, Series 1991, 6.7%, 6/15/12 .............. 1,100,000 A 1,291,741
Port Authority of New York & New Jersey:
Special Obligation Revenue, JFK International Air Terminal:
6.25%, 12/01/10 (c) ......................................................... 2,500,000 AAA 2,808,925
6.25%, 12/01/11 (c) ......................................................... 2,500,000 AAA 2,811,625
Split Amount NC Series 1996, 7%, 10/01/07 .................................... 3,500,000 NR 3,919,825
Shenendehowa Central School District, NY, Clifton Park:
6.85%, 6/15/08 (c) ........................................................... 350,000 AAA 414,341
6.85%, 6/15/09 (c) ........................................................... 350,000 AAA 416,441
Suffolk County, NY, Industrial Development Agency, Southwest Sewer System,
6%, 2/01/07 (c) .............................................................. 500,000 AAA 548,235
Troy, New York, Municipal Assistance Corporation:
Series 1996 A, 1/15/07 (c) ................................................... 650,000 AAA 422,897
Series 1996 A, 7/15/07 (c) ................................................... 650,000 AAA 413,231
Series 1996 A, 1/15/08 (c) ................................................... 750,000 AAA 461,243
Series 1996 A, 1/15/09 (c) ................................................... 650,000 AAA 376,701
Series 1996 A, 7/15/09 (c) ................................................... 350,000 AAA 197,999
Series 1996 A, 7/15/10 (c) ................................................... 600,000 AAA 319,404
Series 1996 A, 5%, 1/15/16 (c) ............................................... 500,000 AAA 479,700
Series 1996 A, 5%, 1/15/22 (c) ............................................... 2,130,000 AAA 2,029,123
</TABLE>
The accompanying notes are an integral part of the financial statements.
21 - Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Principal Credit Market
Amount ($) Rating (b) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Valley Central School District, Montgomery, NY, 7.15%, 6/15/08 (c) ............. 625,000 AAA 754,388
Virgin Islands
Virgin Islands Public Finance Authority, General Obligation, Mortgage Fund Loan
Notes, Series 1992 A, 7%, 10/01/02 ........................................... 500,000 BBB 548,175
Virgin Islands, Special Tax Bonds, Hugo Bonds, 7.75%, 10/01/06 ................. 1,410,000 NR 1,547,428
- ------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Municipal Investments (Cost $171,122,583) 182,479,972
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $171,322,583) (a) 182,679,972
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $171,325,955. At September
30, 1997, net unrealized appreciation for all securities based on tax cost
was $11,354,017. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax
cost of $11,359,558 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$5,541.
(b) All of the securities held have been determined to be of appropriate
credit quality as required by the Fund's investment objectives. Credit
ratings shown are assigned by either Standard & Poor's Ratings Group,
Moody's Investors Service, Inc. or Fitch Investors Service, Inc. Unrated
securities (NR) have been determined to be of comparable quality to rated
eligible securities.
(c) Bond is insured by one of these companies: AMBAC, CAPMAC, FGIC, FSA, FHA,
MBIA/BIG, or MBIA.
* Floating rate and monthly, weekly, or daily demand notes are securities
whose yields vary with a designated market index or market rate, such as
the coupon-equivalent of the Treasury bill rate. Variable rate demand
notes are securities whose yields are periodically reset at levels that
are generally comparable to tax-exempt commercial paper. These securities
are payable on demand within seven calendar days and normally incorporate
an irrevocable letter of credit from a major bank. These notes are
carried, for purposes of calculating average weighted maturity, at the
longer of the period remaining until the next rate change or to the extent
of the demand period.
** Inverse floating rate notes are instruments whose yields have an inverse
relationship to benchmark interest rates. These securities are shown at
their rate as of September 30, 1997.
Transactions in written call options on interest rate futures for the six months
ended September 30, 1997 were as follows:
<TABLE>
<CAPTION>
Number of Contracts Premiums Received ($)
------------------- ---------------------
<S> <C> <C>
Outstanding at March 31, 1997 ...... -- --
Contracts written .................. 100 39,925
Contracts closed ................... (100) (39,925)
-----------------------------------------------------------------------------------
Outstanding at September 30, 1997 .. -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
22 - Scudder New York Tax Free Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of September 30, 1997 (Unaudited)
<TABLE>
<S> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $171,322,583) ................ $ 182,679,972
Cash ................................................................. 56,219
Receivable for investments sold ...................................... 2,528,970
Interest receivable .................................................. 3,018,122
Receivable on Fund shares sold ....................................... 14,874
Other assets ......................................................... 6,163
----------------
Total assets ......................................................... 188,304,320
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Dividends payable .................................................... 246,696
Payable for Fund shares redeemed ..................................... 338,786
Accrued management fee ............................................... 95,803
Other payables and accrued expenses .................................. 64,468
----------------
Total liabilities .................................................... 745,753
--------------------------------------------------------------------------------------------
Net assets, at market value $ 187,558,567
--------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation on investments ............................... 11,357,389
Accumulated net realized loss ........................................ (6,832,598)
Paid-in capital ...................................................... 183,033,776
--------------------------------------------------------------------------------------------
Net assets, at market value $ 187,558,567
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($187,558,567 / 16,834,227 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares authorized) .. $11.14
</TABLE>
The accompanying notes are an integral part of the financial statements.
23 - Scudder New York Tax Free Fund
<PAGE>
Statement of Operations
six months ended September 30, 1997 (Unaudited)
<TABLE>
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------------------------------------------------
Income:
Interest ............................................................. 5,126,514
-----------------
Expenses:
Management fee ....................................................... 575,991
Services to shareholders ............................................. 88,889
Custodian and accounting fees ........................................ 48,609
Trustees' fees and expenses .......................................... 10,407
Auditing ............................................................. 17,931
Reports to shareholders .............................................. 17,692
Legal ................................................................ 2,479
Registration fees .................................................... 5,994
Other ................................................................ 8,613
-----------------
776,605
---------------------------------------------------------------------------------------------
Net investment income ................................................ 4,349,909
---------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments .......................................................... 433,412
Futures .............................................................. (23,750)
Options .............................................................. (9,050)
-----------------
400,612
Net unrealized appreciation during the period on investments ......... 8,151,364
---------------------------------------------------------------------------------------------
Net gain on investments 8,551,976
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 12,901,885
---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24 - Scudder New York Tax Free Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
September 30, Year Ended
1997 March 31,
Increase (Decrease) in Net Assets (Unaudited) 1997
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ..................................... $ 4,349,909 $ 9,246,365
Net realized gains (loss) from investment transactions .... 400,612 1,006,614
Net unrealized appreciation (depreciation) on investment
transactions ........................................... 8,151,364 (1,348,644)
---------------- ---------------
Net increase in net assets resulting from operations ...... 12,901,885 8,904,335
---------------- ---------------
Distributions to shareholders from net investment income .. (4,349,909) (9,246,365)
---------------- ---------------
Distributions to shareholders from net realized gains ..... -- (174,661)
---------------- ---------------
Fund share transactions:
Proceeds from shares sold ................................. 19,580,751 29,307,330
Net asset value of shares issued to shareholders in
reinvestment of distributions .......................... 2,816,330 6,202,562
Cost of shares redeemed ................................... (24,037,647) (45,999,331)
---------------- ---------------
Net decrease in net assets from Fund share transactions ... (1,640,566) (10,489,439)
---------------- ---------------
Decrease in net assets .................................... 6,911,410 (11,006,130)
Net assets at beginning of period ......................... 180,647,157 191,653,287
---------------- ---------------
Net assets at end of period ............................... $ 187,558,567 $ 180,647,157
---------------- ---------------
Other Information
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period ................. 16,986,861 17,964,551
---------------- ---------------
Shares sold ............................................... 1,792,960 2,742,130
Shares issued to shareholders in reinvestment of
distributions .......................................... 257,082 580,341
Shares redeemed ........................................... (2,202,676) (4,300,161)
---------------- ---------------
Net decrease in Fund shares ............................... (152,634) (977,690)
---------------- ---------------
Shares outstanding at end of period ....................... 16,834,227 16,986,861
---------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
25 - Scudder New York 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>
Six Months
Ended
September 30,
1997 Years Ended March 31,
(Unaudited) 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning ---------------------------------------------------------------------------------------------------
of period .................. $10.63 $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39 $11.43
---------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income ......... .26 .53 .53 .52 .54 .61 .65 .67 .69 .72 .73
Net realized and unrealized
gain (loss) on investment
transactions ............... .51 (.03) .29 .11 (.35) 1.03 .50 .13 .16 .14 (.84)
---------------------------------------------------------------------------------------------------
Total from investment
operations ................. .77 .50 .82 .63 .19 1.64 1.15 .80 .85 .86 (.11)
---------------------------------------------------------------------------------------------------
Less distributions:
From net investment income .... (.26) (.53) (.53) (.52) (.54) (.61) (.65) (.67) (.69) (.72) (.73)
From paid-in capital .......... -- -- -- -- -- -- -- -- (.08) -- --
From net realized gains ....... -- (.01) -- -- (.67) (.61) (.25) -- (.01) -- (.20)
In excess of net realized
gains ...................... -- -- -- (.05) (.06) -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Total distributions ........... (.26) (.54) (.53) (.57) (1.27) (1.22) (.90) (.67) (.78) (.72) (.93)
---------------------------------------------------------------------------------------------------
Net asset value, end of ---------------------------------------------------------------------------------------------------
period ..................... $11.14 $10.63 $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (%) .............. 7.29** 4.76 7.95 6.39 1.31 15.60 11.11 7.79 8.18 8.55 (.61)
Ratios and Supplemental Data
Net assets, end of period
($ millions) ............... 188 181 192 194 207 201 159 142 132 123 116
Ratio of operating expenses
to average daily net
assets (%) ................. .84* .83 .82 .82 .82 .82 .87 .91 .89 .89 .95
Ratio of net investment
income to average daily
net assets (%) ............. 4.72* 4.95 4.91 5.13 4.80 5.36 5.96 6.29 6.39 6.89 7.05
Portfolio turnover rate (%) ... 28.13* 71.03 80.5 83.8 158.0 201.4 168.2 224.9 114.3 132.1 44.2
</TABLE>
* Annualized
** Not annualized
26 - 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 original 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. Money market investments purchased with an original 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, 1997, the Tax Free Fund purchased interest rate futures to
manage the duration of the portfolio. Additionally, during the six months ended
September 30, 1997, 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
27 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
time. Certain options, including options on indices, will require cash
settlement by the Fund if the option is exercised. During the six months ended
September 30, 1997, the Tax Free Fund purchased call options on interest rate
futures to manage the duration of the portfolio. In addition, during the period
the Tax Free Fund wrote call options on interest rate futures as a hedge against
potential adverse price movements in the value of portfolio assets.
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, 1997, 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, 1997, the Tax Free Fund had a net tax basis capital loss
carryforward of approximately $6,304,000 which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until March 31, 2003 ($3,924,000) and March 31, 2004 ($2,380,000), the
respective expiration dates, whichever occurs first.
28 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Distribution of Income and Gains. All of the net investment income of the Funds
is declared as dividends to shareholders of record as of the close of business
each day and is paid to shareholders monthly.
During any particular year, net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Funds if
not distributed and, therefore, will be distributed to shareholders. An
additional distribution may be made to the extent necessary to avoid the payment
of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined in accordance with federal tax regulations which
may differ from generally accepted accounting principles. These differences
relate primarily to investments in futures contracts.
As a result, net investment income and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from distributions
during such period. Accordingly, the Funds may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Funds.
The Funds use the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
Other. Investment transactions are accounted for on a trade date basis.
Distributions of net realized gains to shareholders are recorded on the
ex-dividend date. Interest income is accrued pro rata to the earlier of the call
or maturity date.
B. Purchases and Sales of Securities
During the six months ended September 30, 1997, purchases and sales of long-term
municipal securities aggregated $29,995,083 and $25,101,974, respectively, for
Tax Free Fund.
The aggregate face value of futures contracts both opened and closed during the
six months ended September 30, 1997 amounted to $13,855,850 and $13,855,850,
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. For the six months
ended September 30, 1997, the fee for Tax Free Fund pursuant to the Agreement
amounted to $575,991, which was equivalent to an annual effective rate of 0.625%
of the Fund's average daily net assets.
29 - 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, 1998 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, 1997, the
Adviser did not impose a portion of its fee amounting to $69,519, and the
portion imposed amounted to $79,773.
On June 26, 1997, the Adviser entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Adviser, and the Adviser will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close in the fourth quarter of 1997.
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, 1997, SFAC imposed fees
amounting to $15,000 and $26,011 of which $2,500 and $4,371 are unpaid at
September 30, 1997 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, 1997, $29,027 and $61,555 were charged by SSC to
Tax Free Money Fund and Tax Free Fund, of which $4,740 and $11,321 were unpaid
at September 30, 1997, 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,
1997, Trustees' fees aggregated $6,954 and $10,407 for both the Tax Free Money
Fund and Tax Free Fund, respectively.
30 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
This Page
intentionally
left blank.
31 - Scudder New York Tax Free Money Fund
Scudder New York 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
E. Michael Brown*
Trustee
Dawn-Marie Driscoll
Trustee; Executive Fellow, Center
for Business Ethics; President,
Driscoll Associates
Peter B. Freeman
Trustee; Corporate Director and
Trustee
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration, Northeastern
University
Daniel Pierce*
Trustee
Jean C. Tempel
Trustee; Managing Partner,
Technology Equity Partners
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
*Scudder, Stevens & Clark, Inc.
32 - 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 U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
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 Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income 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
Scudder S&P 500 Index Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Retirement Programs
- -------------------
IRA
SEP 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 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 Spain and Portugal 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
in order from expected least risk to most risk. Certain Scudder funds may not be
available for purchase or exchange. +A portion of the income from the tax-free
funds may be subject to federal, state, and local taxes. *A class of shares of
the Fund. **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.
33 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which you designate Lets you purchase Scudder fund shares
the purchase details and the bank account, and money is electronically, avoiding potential mailing delays;
electronically debited from that account monthly to designate a bank account and the transaction
regularly purchase fund shares and "dollar cost average" details, and money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from that account.
fewer when it's higher, which can reduce your average
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you designate.
DistributionsDirect
Automatically deposits your fund distributions into the
bank account you designate within three business days
after each distribution is paid.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
34 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 6,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
- ------------------------------------------------------------------------------------------------------------------------------
New From Scudder: Scudder International Growth and Income Fund
Scudder International Growth and Income Fund takes a yield-oriented approach to investing in international equities. The
Fund seeks to provide long-term growth of capital plus current income. Investors who desire international exposure but
who wish to take a more conservative approach may appreciate the Fund's emphasis on the dividend paying stocks of
well-established companies outside the United States.
- ------------------------------------------------------------------------------------------------------------------------------
The share price of Scudder International Growth and Income Fund will fluctuate. International investing involves special
risks including currency fluctuation and political instability. Contact Scudder Investor Services, Inc., Distributor,
for a prospectus which contains more complete information, including management fees and other expenses. Please read it
carefully before you invest or send money.
</TABLE>
35 - 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.
SCUDDER
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