Scudder
New York Tax Free Money Fund
Scudder
New York Tax Free Fund
Annual Report
March 31, 1997
Pure No-Load(TM) Funds
For investors seeking triple-tax-free income exempt from New York City, state,
and regular federal income taxes.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER
<PAGE>
Table of Contents
2 In Brief
3 Letter from the Fund's President
Scudder New York
Tax Free Fund
4 Performance Update
5 Portfolio Summary
8 Portfolio Management Discussion
18 Investment Portfolio
23 Financial Statements
26 Financial Highlights
Scudder New York
Tax Free Money Fund
6 Portfolio Management Discussion
11 Investment Portfolio
14 Financial Statements
17 Financial Highlights
27 Notes to Financial Statements
31 Report of Independent Accountants
32 Tax Information
36 Officers and Trustees
37 Investment Products and Services
38 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
2.93% on March 31, 1997, equivalent to a 5.21% 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 4.60% 30-day net annualized SEC
yield on March 31, 1997.
o 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 8.18%.
THE PRINTED VERSION CONTAINS A BAR CHART HERE
BAR CHART TITLE:
30-Day Yield on March 31, 1997
BAR CHART DATA:
Scudder New York Tax Free Fund 4.60%
Taxable Equivalent Yield 8.18%
2 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
Letter From the Fund's President
Dear Shareholders,
We are pleased to report to you on Scudder New York Tax Free Fund's
performance over its most recent fiscal year ended March 31, 1997. The Fund
posted a 4.60% 30-day net annualized SEC yield as of March 31, which is
equivalent to a taxable yield of 8.18% for investors in the top New York tax
bracket. The Fund also earned a total return of 4.76% for the 12 months ended
March 31.
In addition, Scudder New York Tax Free Money Fund posted a 5.21% 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.
As part of Scudder's ongoing efforts to meet the needs of investors, last
fall we launched an innovative new product called Scudder Pathway Series. A
"fund of funds," Pathway Series is a collection of four distinct portfolios --
Conservative, Balanced, Growth, and International -- that offers flexibility,
diversification, and simplicity. Each portfolio invests in a diverse mix of
Scudder funds, and each is geared toward people with different investment goals
and risk tolerances. Moreover, a team of Scudder's investment professionals
rebalances the mix within the portfolios as market conditions warrant.
Before closing, we'd like to take this opportunity to tell you that the
Scudder Family of Funds was recently recognized by Morningstar* for stability in
management and conformity to investment style. The mutual fund rating service
ranked Scudder 4th among 20 leading mutual fund companies for overall management
consistency. We are pleased with this superior track record and will strive to
maintain our reputation for consistency going forward. Please see pages 37
through 39 for more information on Scudder products and services. As always,
please call a Scudder Investor Information representative at 1-800-225-2470 if
you have questions about your account or any Scudder fund. 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
* Morningstar Investor, February 1997
3 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
PERFORMANCE UPDATE as of March 31, 1997
- ----------------------------------------------------------------
Fund Index Comparisons
- ----------------------------------------------------------------
Total Return
Period Growth --------------
Ended of Average
3/31/97 $10,000 Cumulative Annual
- --------------------------------------------
Scudder New York Tax Free Fund
- --------------------------------------------
1 Year $ 10,476 4.76% 4.76%
5 Year $ 14,091 40.91% 7.10%
10 Year $ 19,699 96.99% 7.01%
- --------------------------------------------
Lehman Brothers Municipal Bond Index
- --------------------------------------------
1 Year $ 10,545 5.45% 5.45%
5 Year $ 14,137 41.37% 7.16%
10 Year $ 20,634 106.34% 7.51%
- --------------------------------------------
- -----------------------------------------------------------------
Growth of a $10,000 Investment
- -----------------------------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
SCUDDER NEW YORK TAX FREE FUND
Year Amount
- ----------------------
87 $10,000
88 $ 9,939
89 $10,789
90 $11,672
91 $12,582
92 $13,980
93 $16,161
94 $16,373
95 $17,419
96 $18,804
97 $19,938
LEHMAN BROTHERS MUNICIPAL BOND INDEX
Year Amount
- ----------------------
87 $10,000
88 $10,251
89 $10,989
90 $12,149
91 $13,269
92 $14,596
93 $16,425
94 $16,805
95 $18,054
96 $19,567
97 $20,634
YEARLY PERIODS ENDED MARCH 31
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 MARCH 31
<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... $ 10.39 $ 10.53 $ 10.60 $ 10.73 $ 10.98 $ 11.40 $ 10.32 $ 10.38 $ 10.67 $ 10.63
INCOME DIVIDENDS.. $ .73 $ .72 $ .69 $ .67 $ .65 $ .61 $ .54 $ .52 $ .53 $ .53
CAPITAL GAINS
AND OTHER
DISTRIBUTIONS..... $ .20 $ - $ .09 $ - $ .25 $ .61 $ .73 $ .05 $ - $ .01
FUND TOTAL
RETURN (%)........ -.61 8.55 8.18 7.79 11.11 15.60 1.31 6.39 7.95 4.76
INDEX TOTAL
RETURN (%)........ 2.52 7.21 10.56 9.22 10.02 12.52 2.32 7.43 8.38 5.45
</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 March 31, 1997
- ---------------------------------------------------------------------------
Diversification
- ---------------------------------------------------------------------------
Core Cities/Lease 16%
Water/Sewer Revenue 13%
State General Obligation 12%
Higher Education 9%
Hospital/Health 8%
County General Obligation/Lease 8%
Other General Obligation/Lease 8%
Pollution Control/
Industrial Development 5%
Sales/Special Tax 5%
Miscellaneous Municipal 16%
- --------------------------------------
100%
- --------------------------------------
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
Diversification remains an
important strategy for the Fund,
allowing us to spread risk over a
large number of sectors and
maturities.
- --------------------------------------------------------------------------
Quality
- --------------------------------------------------------------------------
AAA 48%
AA 6%
A 11%
BBB 22%
Not Rated 13%
- --------------------------------------
100%
- --------------------------------------
Weighted average quality: AA
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
The Fund's overall quality remains
high, with 65% of portfolio
securities rated A or better.
- --------------------------------------------------------------------------
Effective Maturity
- --------------------------------------------------------------------------
Less than 1 year 6%
1-5 years 7%
5-10 years 32%
10-15 years 35%
Greater than 15 years 20%
- --------------------------------------
100%
- --------------------------------------
Weighted average effective maturity: 11.10 years
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
To take advantage of
opportunities to lock in a
substantial income stream, we
purchased premium noncallable
intermediate maturity bonds.
- -----------------------------------------------------------------------------
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,
Scudder New York Tax Free Money Fund's most recent fiscal year marked a change
in the short-term debt market's stance from anticipating a "Fed ease" (lower
yields) to anticipating a "Fed tightening" (higher yields) due to stronger than
expected labor market statistics. The Federal Reserve raised the federal funds
rate by one quarter of a percentage point on March 25 in an attempt to slow down
the economy and ward off wage inflation. The effect on short-term New York
tax-exempt yields has been somewhat muted, however, because of limited supply in
this market. Our strategy over the past fiscal year was to use commercial paper
as an effective tool for managing the average maturity of the fund in a
potentially volatile market by "locking in" yields for one to three months. We
also maintained a substantial variable rate demand bond position to provide
stability for the fund given the uncertainty of the market. These securities
maintain their principal value and accrue a current market interest rate that
resets daily, weekly or monthly.
During the period we sought a relatively high yield by maintaining an average
maturity slightly longer than Scudder New York Tax Free Money Fund's peers. As
of March 31, 1997, the Fund's average maturity was 52 days, compared with 69
days as of March 31, 1996. The Fund's seven-day effective yield as of March 31
was 2.93%. For investors in the highest combined state and federal income tax
bracket, the Fund's yield equaled a 5.21% compounded taxable yield, higher than
the 4.84% 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 2.85% for the 12-month period ended March 31, assuming
reinvestment of all income distributions, which totaled $0.028 per share during
the most recent fiscal year.
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>
Scudder New York Tax Free Money Fund:
A Team Approach to Investing
Scudder New York Tax Free Money Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Rebecca Wilson has had responsibility for Scudder New
York Tax Free Money Fund's day-to-day management since 1987. Ms. Wilson, who
joined Scudder in 1986, has 11 years of experience in municipal investing and
research. K. Sue Cote, Portfolio Manager, has been a member of Scudder New York
Tax Free Money Fund's team since 1987 and has 13 years of short-term
fixed-income investment experience.
Your Portfolio Management Team: Rebecca Wilson and K. Sue Cote
7 -- Scudder New York Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
Scudder New York Tax Free Fund
Dear Shareholders,
Scudder New York Tax Free Fund performed well over a fiscal year that witnessed
mixed performance for New York municipal bonds, and ended with an interest rate
hike by the Federal Reserve. On March 31, 1997, the Fund's 30-day net annualized
SEC yield was 4.60%, equivalent to a taxable yield of 8.18% 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.
During a 12-month period that saw little price movement in the
intermediate-maturity municipal bonds the Fund primarily invests in, the Fund's
share price declined $0.04 to $10.63 per share. The modest decline in the Fund's
share price along with distributions during the fiscal year of $0.53 in interest
income and $0.01 in short-term capital gains combined to produce a total return
of 4.76% for the Fund over the fiscal year ended March 31, 1997. This
performance was roughly in keeping with the 4.82% average total return of 94
similar funds tracked by Lipper Analytical Services over the same period. Longer
term, the Fund placed in the top one third of similar New York tax free funds
tracked by Lipper for total return performance over three-, five-, and 10-year
periods.
New York Update
The April 1 deadline passed for the thirteenth consecutive year without a signed
budget for the State of New York. This year the major delay in the budget was
rooted in a political disagreement over the size and disposition of the fiscal
1997 budget surplus. Meanwhile, the New York State economy continued to grow at
a modest rate, though slower than the pace of the nation as a whole. The State's
unemployment rate was 6.2% in 1996, 15% higher than the national average.
Although they represent only 9.1% of the state's job market and are experiencing
minimal job growth, the financial, insurance, and real estate sectors continue
to play a leading role in the State's strong financial position. Financial
companies on Wall Street have been reaping tremendous profits resulting in
higher salaries and even higher year-end bonuses for their employees. The recent
performance of these sectors has caused business and personal income tax
receipts to exceed fiscal year 1997 projections. In 1996 the State's per capita
income was $26,782, or 18% higher than the national average. The State's debt
burden is high, but manageable, given New York's high wealth levels.
8 -- Scudder New York Tax Free Money Fund
<PAGE>
Municipals Outperform
Treasuries
Scudder New York Tax Free Fund's most recent fiscal year witnessed a healthy
U.S. economy spurred on by increased consumer spending with continued low
inflation. The economy experienced real (inflation-adjusted) Gross Domestic
Product (GDP) growth of 2.4% during 1996, and at the close of the first quarter
was on track for GDP growth of 2.5% or higher in 1997. The stock market scaled
unprecedented heights until mid-March, and the bond market struggled
unsuccessfully to keep up. In the midst of this healthy environment for
corporate profits and the stock market, bond market participants continued to
closely monitor indicators for signs of economic overheating and accelerating
inflation. Their worry was reflected in the performance of the Treasury market
over the Fund's most recent fiscal year, where yields of 10-year Treasury bonds
rose almost one half of a percentage point, and prices declined 3.64%. Concern
over the Federal Reserve Open Market Committee's decision to raise the Fed Funds
rate by one quarter of a percentage point on March 25 was balanced by the
feeling in some quarters that this and any further increases had already been
priced into the market.
Municipals outperformed Treasuries during the 12-month period, as yields of
10-year municipals rose only one tenth of a percentage point, and prices
declined 0.66%. Municipal bond prices were supported by shrinking overall supply
as large numbers of bonds were called away in June and July, a moderate level of
new issuance, and steady demand from both individuals and institutions such as
insurance companies.
Focus on Intermediate
Noncallable Bonds
Our portfolio strategy over the Fund's most recent fiscal year has been to take
advantage of opportunities to lock in a substantial income stream for the Fund
over time by purchasing premium noncallable intermediate maturity bonds (those
with maturities of 15 years or less). As of March 31, 80% of the Fund's
securities had maturities in this range. We also looked for opportunities to add
higher-yielding BBB-rated and non-rated bonds to the portfolio, including New
York City bonds. These issues, while carrying some additional credit risk,
generally exhibit less interest rate sensitivity than municipal bonds rated A or
above. The Fund held 35% of bonds in these two categories and 16% in New York
City Bonds as of March 31. (For a summary of the Fund's quality,
diversification, and maturity structure, see page 5.)
The Fund's overall quality remains high, with more than 65% of portfolio
securities rated A or better as of March 31. We continue to invest in a broad
selection of New York municipal bonds, including water and sewer revenue,
hospital/health care, and general obligation 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 longer-term investment strategy continues to focus on four basic elements:
(1) purchasing bonds with effective maturities of less than 20 years; (2)
purchasing noncallable bonds at
9 -- Scudder New York Tax Free Fund
<PAGE>
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.
Our Outlook
Though it is possible that the national economy's favorable momentum will carry
over for the remainder of 1997, we believe that a slight slowdown could occur in
the spring or summer. U.S. consumers, the major drivers of the country's
economic growth, continue to be overextended: Credit card defaults recently
matched levels last seen just after the 1989-90 recession. Deregulation of key
industries worldwide, the globalization of economic activity, and technological
advances continue to dampen any resurgence of inflation, and any signs that the
economy is slowing even slightly could soothe the bond market and diminish
upward pressure on rates coming from the Federal Reserve or market participants.
In the near term, we will continue to focus on bonds with favorable call
structures as well as search for high yield bonds that meet our credit
standards. We will 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
Scudder New York
Tax Free Fund:
A Team Approach to Investing
Scudder New York Tax Free Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management process.
Team members work together to develop investment strategies and select
securities for the Fund's portfolio. They are supported by Scudder's large staff
of economists, research analysts, traders, and other investment specialists who
work in Scudder's offices across the United States and abroad. We believe our
team approach benefits Fund investors by bringing together many disciplines and
leveraging Scudder's extensive resources.
Lead Portfolio Manager Jeremy L. Ragus has had responsibility for Scudder New
York Tax Free Fund's day-to-day management since 1990. Mr. Ragus, who joined
Scudder in 1990, has 16 years of experience in municipal investing. Donald C.
Carleton, Portfolio Manager, has been a member of Scudder New York Tax Free
Fund's team since 1983 and has over 25 years of investment experience. Your
Portfolio Management Team: Jeremy L. Ragus and Donald C. Carleton
10 -- Scudder New York Tax Free Fund
<PAGE>
Investment Portfolio as of March 31, 1997
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------------
Municipal Investments 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York
Albany, New York, Industrial Development Authority, Davies Office Refurbishing,
Series 1997, Weekly Demand Note, 3.4%, 2/1/17* ....................................... 1,000,000 A1 1,000,000
Central Islip New York, Union Free School District Tax Anticipation Notes,
4.5%, 6/30/97 ........................................................................ 1,500,000 SS&C 1,501,598
Erie County, NY, Water Authority, Waterworks Revenue, Weekly Demand Bonds,
3.3%, 12/1/16 (c)* ................................................................... 2,000,000 A1+ 2,000,000
Farmingdale New York, Union Free School District Tax Anticipation Note,
General Obligation, Series 1996 S, 4.5%, 6/26/97 ..................................... 1,500,000 SS&C 1,501,707
Long Beach New York, Central School District Tax Anticipation Note,
General Obligation, Series 1996 S, 4.5%, 6/26/97 ..................................... 1,500,000 SS&C 1,501,440
Monroe County, NY, Industrial Development Agency, Office Building Associates,
Series 1992, Weekly Demand Note, 3.3%, 10/1/00* ...................................... 1,549,000 A1 1,549,000
Nassau County, NY, General Obligation Notes, Series 1996, 4.25%, 8/15/97 ............... 1,000,000 MIG1 1,002,529
New York City Municipal Water Finance Authority, Variable Rate Demand Note,
3.85%, 6/15/24 (c)* .................................................................. 100,000 MIG1 100,000
New York City General Obligation:
Daily Demand Note, 3.85%, 8/1/23* .................................................... 100,000 MIG1 100,000
Revenue Anticipation Notes, Series 1996 A, 4.5%, 4/15/97 ............................. 1,000,000 SP1+ 1,000,309
Revenue Anticipation Notes, Series 1996 B, 4.5%, 6/30/97 ............................. 1,000,000 MIG1 1,002,312
Series 1994 B3, Daily Demand Note, 4%, 8/15/04 (c)* .................................. 400,000 A1+ 400,000
Series 1994 H-3, Tax Exempt Commercial Paper, 3.45%, 6/26/97 (c) ..................... 2,000,000 A1 2,000,000
Series H4, Tax Exempt Commercial Paper, 3.5%, 9/11/97 (c) ............................ 1,000,000 A1+ 1,000,000
New York City, Industrial Development Agency, Korean Airlines, Series 1997 A,
Weekly Demand Note, 3.45%, 11/1/24* .................................................. 2,000,000 MIG1 2,000,000
New York City, Municipal Assistance Corporation, Series F, Tax Exempt Commercial
Paper, 3.55%, 4/4/97 (c) ............................................................. 1,000,000 MIG1 1,000,000
New York State Dormitory Authority:
Memorial Sloan Kettering Cancer Center, Series 1996, Tax Exempt Commercial
Paper, 3.4%, 7/17/97 .............................................................. 1,300,000 A1+ 1,300,000
Memorial Sloan-Kettering Cancer Center Revenue, Series C,
Commercial Paper, 3.45%, 6/26/97 .................................................. 750,000 A1 750,000
New York State Energy Research & Development Authority,
Pollution Control Revenue:
Orange & Rockland Utilities Project, Weekly Demand Note, 3.6%, 8/1/15 (c)* .......... 1,000,000 MIG1 1,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11 -- Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Niagara Mohawk Power Co., Daily Demand Bonds:
3.85%, 12/1/23* .................................................................. 700,000 A1+ 700,000
3.85%, 7/1/27* ................................................................... 1,600,000 A1+ 1,600,000
Rochester Gas and Electric Company, Monthly Reset Bonds, 3.3%, 10/1/14* .............. 1,000,000 A1 1,000,000
New York State Housing Finance Agency:
Housing Revenue Bonds, Liberty View Apartments Project, Weekly Demand Bond,
3.2%, 11/1/05* .................................................................... 1,200,000 MIG1 1,200,000
Hospital for Special Surgery, Variable Rate Demand Bonds, 3.15%, 11/1/10* ............ 2,200,000 MIG1 2,200,000
Normandie Court 1 Housing Revenue, Variable Rate Demand Bond, 3.4%,
5/15/15* .......................................................................... 1,900,000 MIG1 1,900,000
New York State Job Development Authority:
Variable Rate Demand Bond, Series F, 355%, 3/1/99* ................................... 590,000 MIG1 590,000
Monthly Reset Bonds, Series 1985 C, 3.55%, 3/1/00* ................................... 890,000 MIG1 890,000
Special Purpose, Series A1-13, Daily Demand Note, 4%, 3/1/02* ........................ 485,000 MIG1 485,000
New York State Local Government Assistance Corporation, Series 1993 A,
Weekly Demand Note, 3.35%, 4/1/22* ................................................... 1,000,000 MIG1 1,000,000
New York State Medical Care Facilities, Finance Agency, Children's Hospital
of Buffalo, Variable Rate Weekly Demand Bond, 3.15%, 11/1/05* ........................ 2,700,000 MIG1 2,700,000
New York State Pollution Control Revenue, Orange & Rockland Energy Research
and Development Project, Weekly Demand Notes, 3.3%, 10/1/14* ......................... 2,100,000 MIG1 2,100,000
New York State, Environmental Facilities Corp., Series 1987A, Solid Waste Revenue,
General Electric Corp., CP, 3.4%, 5/20/97 ............................................ 1,000,000 A1+ 1,000,000
New York State, Environmental Quality, General Obligation, Series 1997A, Tax Exempt
Commercial Paper, 3.4%, 5/20/97 ...................................................... 1,500,000 A1+ 1,500,000
New York and New Jersey Port Authority, Series 1996, Tax Exempt Commercial Paper,
3.4%, 7/24/97 ........................................................................ 1,000,000 A1+ 1,000,000
New York and New Jersey, Port Authority, Series 1996, Tax Exempt Commercial Paper,
3.45%, 5/20/97 ....................................................................... 1,320,000 A1+ 1,320,000
New York State Environmental Facilities Corp., Series 1987A, Solid Waste Revenue,
General Electric Co., Commercial Paper, 3.45%, 7/15/97 ............................... 1,000,000 A1+ 1,000,000
North Hempstead, NY, Solid Waste Management Revenue Refunding, Series 1993 A,
Weekly Demand Note, 3.45%, 2/1/12* ................................................... 1,100,000 MIG1 1,100,000
Rochester, NY, Bond Anticipation Note, Series 111, 1996, 4.5%, 10/30/97 ................ 1,000,000 SS&C 1,004,193
Royalton-Hartland, New York, Central School District Series 1997 A, 4.5%,
8/15/97 .............................................................................. 2,500,000 SS&C 2,504,065
SAG Harbor, New York Union Free School District Tax Anticipation Note NC,
Series 1996, 4.5%, 6/30/97 ........................................................... 1,500,000 SS&C 1,501,795
</TABLE>
The accompanying notes are an integral part of the financial statements.
12 -- Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schenectady County, NY, Industrial Development Revenue, Scotia Industrial Park
Project, Weekly Demand Bonds, 3.3%, 6/1/09* .......................................... 2,170,000 A1 2,170,000
Seneca County, NY, Industrial Development Agency, 1991 Civic Facility,
New York Chiropractic College, Weekly Demand Bond, 3.3%, 10/1/21* .................... 500,000 A1+ 500,000
Triborough Bridge and Tunnel Authority, NY, Special Obligation, Variable Rate
Demand Bonds, 3.45%, 1/1/24 (c)* ..................................................... 3,000,000 MIG1 3,000,000
Trust for the Cultural Resources of the City of New York, Museum of Natural History,
Weekly Demand Bond, 3.3%, 4/1/21 (c)* ................................................ 1,600,000 MIG1 1,600,000
Tuxedo Park, NY, Bond Anticipation Note, Series 1996 B, 4.25%, 12/18/97 ................ 1,611,000 SS&C 1,617,658
- ------------------------------------------------------------------------------------------------------------------------------------
Total Municipal Investments (Cost $58,891,606) 58,891,606
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $58,891,606) (a) 58,891,606
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $58,891,606
(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 March 31, 1997
<TABLE>
<CAPTION>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (identified cost $58,891,606) .................... $ 58,891,606
Cash ................................................................... 11,540
Receivable on investments sold ......................................... 70,000
Interest receivable .................................................... 461,918
Receivable on Fund shares sold ......................................... 361,984
Other assets ........................................................... 1,765
----------------
Total assets ........................................................... 59,798,813
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ...................................... 173,301
Dividends payable ..................................................... 17,201
Accrued management fee ................................................ 23,436
Other accrued expenses ................................................ 46,223
----------------
Total liabilities ..................................................... 260,161
-------------------------------------------------------------------------------------------
Net assets, at value $ 59,538,652
-------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized loss .......................................... (52,501)
Paid-in capital ........................................................ 59,591,153
--------------------------------------------------------------------------------------------
Net assets, at value $ 59,538,652
--------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($59,538,652 /
59,542,322 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
year ended March 31, 1997
<TABLE>
<CAPTION>
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Interest ............................................................... $ 1,957,622
-----------------
Expenses:
Management fee ......................................................... 286,728
Services to shareholders ............................................... 82,111
Custodian and accounting fees .......................................... 45,986
Trustees' fees and expenses ............................................ 15,059
Auditing ............................................................... 25,247
Reports to shareholders ................................................ 16,072
Registration fees ...................................................... 3,523
Legal .................................................................. 6,118
Other .................................................................. 7,043
-----------------
Total expenses before reductions ....................................... 487,887
Expense reductions ..................................................... (143,791)
-----------------
Expenses, net .......................................................... 344,096
--------------------------------------------------------------------------------------------
Net investment income 1,613,526
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 1,613,526
--------------------------------------------------------------------------------------------
</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>
Years Ended March 31,
Increase (Decrease) in Net Assets 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ...................................... $ 1,613,526 $ 1,734,560
Net realized loss from investment transactions ............. -- (3,311)
---------------- ---------------
Net increase in net assets resulting from operations ....... 1,613,526 1,731,249
---------------- ---------------
Distributions to shareholders from net investment income ... (1,613,526) (1,734,560)
---------------- ---------------
Fund share transactions at net asset value of $1.00 per share:
Shares sold ................................................ 52,781,839 57,520,540
Net asset value of shares issued to shareholders in
reinvestment of distributions ............................ 1,405,013 1,503,912
Shares redeemed ............................................ (53,062,079) (55,556,958)
---------------- ---------------
Net increase (decrease) in net assets from Fund share
transactions ............................................. 1,124,773 3,467,494
---------------- ---------------
Increase (decrease) in net assets .......................... 1,124,773 3,464,183
Net assets at beginning of period .......................... 58,413,879 54,949,696
---------------- ---------------
Net assets at end of period ................................ $59,538,652 $58,413,879
---------------- ---------------
</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
(commencement of
operations) to
Years Ended March 31, March 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning ------------------------------------------------------------------------------------------
of period .............. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------------------------------------------------------------------------------------------
Net investment income ..... .028 .031 .025 .017 .022 .035 .046 .052 .047 .033
Distributions from net
investment income ...... (.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 $1.000
-----------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ...... 2.85 3.18 2.57 1.75 2.22 3.55 4.69 5.33 4.78 3.33**
Ratios and Supplemental
Data
Net assets, end of period
($ millions) ........... 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 .53 .50*
Ratio of operating
expenses before
expense reductions,
to average daily net
assets (%) ............. .85 .86 .89 .97 .97 1.01 1.08 1.08 .98 1.19*
Ratio of net investment
income to average
daily net assets (%) ... 2.81 3.13 2.56 1.73 2.19 3.46 4.57 5.21 4.76 4.08*
</TABLE>
(a) Total returns are higher due to maintenance of the Fund's expenses.
* Annualized
** Not annualized
17 -- Scudder New York Tax Free Money Fund
<PAGE>
Investment Portfolio as of March 31, 1997
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Short-Term Municipal Investments 5.1%
- ------------------------------------------------------------------------------------------------------------------------------------
New York
New State Energy Research & Development Daily Demand Note, 3.65%, 6/1/29* .............. 100,000 A1+ 100,000
New York City Municipal Water Finance Authority, Variable Rate Demand Note,
3.85%, 6/15/24 (c)* .................................................................. 5,900,000 MIG1 5,900,000
New York City, Series B, Daily Demand Note, 3.8%, 8/15/22 (c)* ......................... 1,700,000 A1+ 1,700,000
New York City, General Obligation Daily Demand Note, 4%, 8/1/16* ....................... 1,475,000 A1+ 1,475,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Municipal Investments (Cost $9,175,000) 9,175,000
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Municipal Investments 94.9%
- ------------------------------------------------------------------------------------------------------------------------------------
New York
34th Street Partnership Inc., NY, Capital Improvement, 5.5%, 1/1/14 .................... 1,900,000 A 1,796,450
Albany County Airport Revenue, Series 1997:
5.375%, 12/15/17 (c) ................................................................. 1,000,000 AAA 921,920
5.5%, 12/15/19 ....................................................................... 1,000,000 AAA 934,820
Albany, NY, General Obligation, 7%, 1/15/08 (c) ........................................ 485,000 AAA 519,542
Buffalo, New York, General Obligation, 5%, 2/1/07 (c) .................................. 2,000,000 AAA 1,958,820
Chautauqua County, NY:
7.3%, 4/1/08 (c) ..................................................................... 575,000 AAA 674,239
7.3%, 4/1/09 (c) ..................................................................... 575,000 AAA 675,148
Chautauqua County, New York, Series 1990:
7.3%, 4/1/07 (c) ..................................................................... 465,000 AAA 540,595
6.4%, 9/15/08 (c) .................................................................... 520,000 AAA 571,589
Development Authority of The North Country, NY, Solid Waste
Management Authority:
6%, 7/1/97 .......................................................................... 175,000 A 175,665
6.15%, 7/1/98 ....................................................................... 440,000 A 447,181
Dutchess County, NY, Resource Recovery, Solid Waste Management, Series 1990 A,
7.5%, 1/1/09 (c) ..................................................................... 1,000,000 AAA 1,077,350
Erie County, New York, Public Improvement General Obligation Unlimited,
Series 1992, 6.125%, 1/15/12 (c) ..................................................... 590,000 AAA 630,020
Glen Cove Housing Authority, Series 96, 8.25%, 10/1/26 ................................. 1,500,000 NR 1,502,310
Inverse Variable Rate Certificate Trust, Metropolitan Transit Authority,
Series 1993 B, 5.467%, 6/30/02** ..................................................... 8,000,000 NR 8,140,000
Islip New York Community Development Agency, Series 1996, 7.5%, 3/1/26 ................. 4,000,000 NR 4,133,600
Jamestown, New York, General Obligation, Series 1991 A:
7%, 3/15/07 (c) ...................................................................... 725,000 AAA 826,609
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7%, 3/15/08 (c) ...................................................................... 600,000 AAA 686,508
Monroe County, NY, General Obligation, Series 1996:
6%, 6/1/06 ........................................................................... 500,000 AA 532,205
6%, 3/1/13 ........................................................................... 1,050,000 AA 1,096,064
6%, 3/1/14 ........................................................................... 1,040,000 AA 1,081,569
6%, 3/1/17 ........................................................................... 1,410,000 AA 1,454,796
Nassau County, NY, General Obligation, Refunding Combined Sewer Districts,
Series 1993G, 5.4%, 1/15/10 .......................................................... 1,655,000 AAA 1,655,166
New York City Municipal Assistance Corp. NC Series 1996E, 6%, 7/1/05 ................... 2,500,000 AA 2,651,475
New York City Municipal Water Finance Authority, Water & Sewer System,
1993 Series A, 5.875%, 6/15/13 (c) ................................................... 2,750,000 AAA 2,847,433
New York City, Industrial Development Agency:
Civil Facilities, USTA National Tennis Center:
6.1%, 11/15/04 (c) .................................................................. 1,215,000 AAA 1,294,485
6.25%, 11/15/06 (c) ................................................................. 3,000,000 AAA 3,240,450
Civil Facility Revenue, YMCA Greater New York Project, Series 1997:
6%, 8/1/06 .......................................................................... 580,000 BBB 591,148
5.85%, 8/1/08 ....................................................................... 600,000 BBB 597,096
5.8%, 8/1/16 ........................................................................ 1,000,000 BBB 960,530
Japan Air Lines, Series 1996, 6%, 11/1/15 (c) ........................................ 1,000,000 AAA 1,002,420
New York City, NY General Obligation:
7.25%, 8/15/07 ....................................................................... 2,250,000 A 2,495,475
Series 1991, 7.5%, 2/1/06 ............................................................ 1,000,000 A 1,104,270
Series 1996 A:
7%, 8/1/05 .......................................................................... 5,000,000 BBB 5,436,300
7%, 8/1/06 .......................................................................... 5,000,000 BBB 5,446,050
6.25%, 8/1/09 ....................................................................... 5,175,000 BBB 5,275,499
Series B:
7.5%, 2/1/05 ........................................................................ 2,500,000 A 2,760,675
8.25% 6/1/06 ........................................................................ 2,750,000 A 3,227,125
Series E, 8%, 8/1/05 (c) ............................................................. 330,000 AAA 393,287
Visy Paper Inc. Project, Series 1995, 7.95%, 1/1/28 .................................. 2,250,000 NR 2,406,420
New York Housing Corp, 5%, 11/1/13 (c) ................................................. 6,000,000 AAA 5,534,820
New York State Dormitory Authority:
City University Series 1995 A, 5.625%, 7/1/16 ........................................ 2,750,000 BBB 2,635,930
City University System Series 1995 A, 5.625%, 7/1/16 (c) ............................. 1,100,000 AAA 1,090,320
</TABLE>
The accompanying notes are an integral part of the financial statements.
19 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
College and University Pooled Capital Program, 7.8%, 12/1/05 (c) ..................... 3,610,000 AAA 3,872,591
Columbia University 6%, 7/1/10 ....................................................... 1,000,000 A 1,002,320
FSA Lease Revenue:
5.5%, 5/15/16 ....................................................................... 1,000,000 AAA 948,940
5.5%, 5/15/24 ....................................................................... 1,000,000 AAA 932,100
Ithaca College, Series 1997, 5.25%, 7/1/26 (c) ....................................... 2,000,000 AAA 1,824,860
Nyack Hospital Series 1996, 6.25%, 7/1/13 ............................................ 500,000 A 504,685
Nyack Hospital NC Series 1996, 6%, 7/1/06 ............................................ 1,000,000 A 997,090
Revenue:
6.5%, 2/15/11 ....................................................................... 1,000,000 A 1,064,030
Columbia University, 5%, 7/1/15 ..................................................... 2,500,000 AAA 2,294,875
Library Facilities Service Contract, Series 1996, 5.25%, 7/1/19 (c) ................. 1,000,000 AAA 908,450
Mental Health Services Facilities, Series 1997 B, 5.5%, 8/15/17 ..................... 1,000,000 A 925,000
Saint Josephs Hospital, Series 1997, 5.250%, 7/1/18 (c) ............................. 1,000,000 AAA 929,760
State University Educational Facilities, Series 1996, 5.5%, 5/15/26 ................. 1,375,000 BBB 1,254,468
Upstate Community College, 5.8%, 7/1/06 ............................................. 1,075,000 BBB 1,084,073
5.75%, 7/1/09 ....................................................................... 1,000,000 AAA 1,031,880
6%, 2/15/12 ......................................................................... 2,500,000 A 2,529,275
6.5%, 2/15/10 ....................................................................... 1,500,000 A 1,598,385
Mentefiore Medical Center, Series 1996:
6%, 8/1/08 (c) ................................................................... 2,000,000 AAA 2,107,500
6%, 2/1/09 (c) ................................................................... 2,000,000 AAA 2,101,960
5.25%, 2/1/15 (c) ................................................................ 1,000,000 AAA 935,080
Mt. Sinai School of Medicine, Series B, 5.7%, 7/1/11 (c) ............................ 1,825,000 AAA 1,855,496
State University Educational Facility, Series A:
5.875%, 5/15/11 ..................................................................... 2,250,000 BBB 2,246,625
7.125%, 5/15/09 ..................................................................... 25,000 BBB 26,448
6.5%, 5/15/06 ....................................................................... 2,000,000 BBB 2,124,120
State University Series 1993A, 5.875%, 5/15/11 (c) ................................... 380,000 AAA 394,030
New York State Energy Research and Development Authority, Series 1995B:
5.5%, 4/1/05 ......................................................................... 500,000 BBB 495,225
5.5%, 4/1/06 ......................................................................... 300,000 BBB 294,993
New York State Environmental Facilities Corporation:
NC Series 1994, 5.75%, 6/15/10 ....................................................... 1,750,000 AA 1,797,145
</TABLE>
The accompanying notes are an integral part of the financial statements.
20 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
State Water Revolving Fund, Series D, 6.9%, 5/15/15 .................................. 2,345,000 AAA 2,643,776
Special Obligation Revenue, Riverbank State Park, Series 1996:
6.25%, 4/1/07 ....................................................................... 2,055,000 AAA 2,218,290
6.25%, 4/1/08 ....................................................................... 2,185,000 AAA 2,373,456
New York State Health Facilities Authority, 6.375%, 11/1/04 ............................ 2,000,000 BBB 2,098,360
New York State Medical Care Facilities Finance Agency:
North Shore University, Glen Cove, Series A, 5.125%, 11/1/12 (c) ..................... 450,000 AAA 423,491
Mental Health Center, Series A, 8.875%, 8/15/07 ...................................... 395,000 BBB 409,445
New York State Mortgage Agency Revenue:
Series 1994, 6.8%, 10/1/05 ........................................................... 1,000,000 AA 1,047,920
Homeowner Mortgage, Series FF, 7.95%, 10/1/14 ........................................ 250,000 AA 257,843
New York State Power Authority, General Purpose Revenue, Series CC,
5.125%, 1/1/11, Zero Coupon (c) ...................................................... 3,500,000 AAA 3,384,710
New York State Throughway Authority General Revenue, Capital Appreciation
Special Obligation, Series 1991 A, Zero Coupon, 1/1/06 ............................... 2,905,000 NR 1,734,721
New York State Urban Development Corporation:
Attica Correctional Facilities NC, 6.25%, 4/1/06 ..................................... 500,000 BBB 522,015
Series 1995, 5.7%, 4/1/09 ............................................................ 4,250,000 BBB 4,242,690
Series 1996 A, 6.25%, 4/1/05 ......................................................... 1,375,000 AAA 1,474,083
Revenue, Correctional Capital Facilities:
NC Series 95, 5.375%, 1/1/15 (c) .................................................... 2,000,000 AAA 1,921,360
Series A, 5.5%, 1/1/14 .............................................................. 2,000,000 BBB 1,893,020
Niagara County, NY, General Obligation, 7.1%, 2/15/11 (c) .............................. 500,000 AAA 579,215
Niagara Falls, NY, Water Treatment Plant:
7%, 11/1/03 (c) ..................................................................... 2,260,000 AAA 2,510,770
8.5%, 11/1/05 (c) ................................................................... 2,140,000 AAA 2,621,307
8.5%, 11/1/06 (c) ................................................................... 1,240,000 AAA 1,534,550
Port Authority of New York & New Jersey Special Obligation, Series 1996,
7%, 10/1/07 .......................................................................... 3,500,000 NR 3,755,675
Shenendehowa Central School District, NY, Clifton Park, 6.85%:
6/15/08 (c) .......................................................................... 350,000 AAA 398,608
6/15/09 (c) .......................................................................... 350,000 AAA 398,535
Suffolk County, NY, Industrial Development Agency, Southwest Sewer System,
6%, 2/1/07 (c) ....................................................................... 500,000 AAA 532,030
Troy, New York, Municipal Assistance Corporation, Series 1996A:
1/15/07, Zero Coupon (c) ............................................................. 650,000 AAA 392,132
</TABLE>
The accompanying notes are an integral part of the financial statements
21 -- Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7/15/07, Zero Coupon (c) ............................................................. 650,000 AAA 382,135
1/15/08, Zero Coupon (c) ............................................................. 750,000 AAA 425,198
1/15/09, Zero Coupon (c) ............................................................. 650,000 AAA 345,631
7/15/09, Zero Coupon (c) ............................................................. 350,000 AAA 181,188
7/15/10, Zero Coupon (c) ............................................................. 600,000 AAA 291,378
5%, 1/15/16 (c) ...................................................................... 500,000 AAA 454,545
5%, 1/15/22 (c) ...................................................................... 1,000,000 AAA 887,020
Valley Central School District, Montgomery, NY, 7.15%, 6/15/08 ......................... 625,000 AAA 726,931
Yonkers, NY, General Obligation, Series 1996:
5.125%, 8/1/09 (c) ................................................................... 1,000,000 AAA 967,090
5.125%, 8/1/10 (c) ................................................................... 1,000,000 AAA 955,714
Puerto Rico
Puerto Rico Commonwealth Infrastructure Finance Authority, Series A,
7.75%, 7/1/08 ........................................................................ 920,000 BBB 974,998
Virgin Islands
Virgin Islands, Special Tax Bonds, Hugo Bonds, 7.75%, 10/1/06 .......................... 1,410,000 NR 1,517,837
Virgin Islands Public Finance Authority, General Obligation, Mortgage Fund
Loan Notes, Series 1992 A, 7%, 10/1/02 ............................................... 500,000 BBB 533,230
- ------------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Municipal Investments (Cost $165,909,650) 169,115,675
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $175,084,650) (a) 178,290,675
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $175,088,022. At March 31,
1997, net unrealized appreciation for all securities based on tax cost was
$3,202,653. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost of
$4,228,749 and aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over market value of $1,026,096.
(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, 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 March 31, 1997.
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 March 31, 1997
<TABLE>
<CAPTION>
Assets
--------------------------------------------------------------------------------------------------------
<S> <C>
Investments, at market (identified cost $175,084,650) ........... $ 178,290,675
Cash ............................................................ 13,655
Interest receivable ............................................. 2,891,774
Receivable on Fund shares sold .................................. 44,533
Other assets .................................................... 6,855
-------------
Total assets .................................................... 181,247,492
Liabilities
- --------------------------------------------------------------------------------------------------------
Dividends payable ............................................... 254,445
Payable for Fund shares redeemed ................................ 182,089
Accrued management fee .......................................... 92,063
Other accrued expenses .......................................... 71,738
-------------
Total liabilities ............................................... 600,335
--------------------------------------------------------------------------------
Net assets, at market value $ 180,647,157
--------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation on investments .......................... 3,206,025
Accumulated net realized loss ................................... (7,233,210)
Paid-in capital ................................................. 184,674,342
--------------------------------------------------------------------------------
Net assets, at market value $ 180,647,157
--------------------------------------------------------------------------------
Net Asset Value
- --------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($180,647,157/16,986,861 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares -------------
authorized) ................................................... $ 10.63
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23 -- Scudder New York Tax Free Fund
<PAGE>
Statement of Operations
year ended March 31, 1997
<TABLE>
<CAPTION>
Investment Income
- --------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Interest ................................................... 10,801,992
------------
Expenses:
Management fee ............................................. 1,165,330
Services to shareholders ................................... 172,131
Custodian and accounting fees .............................. 100,356
Trustees' fees and expenses ................................ 14,995
Auditing ................................................... 35,665
Reports to shareholders .................................... 38,904
Legal ...................................................... 10,102
Registration fees .......................................... 7,973
Other ...................................................... 10,171
------------
1,555,627
--------------------------------------------------------------------------
Net investment income 9,246,365
--------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- --------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ................................................ 982,172
Futures .................................................... (30,673)
Options .................................................... 55,115
------------
1,006,614
Net unrealized depreciation during the period on investments (1,348,644)
--------------------------------------------------------------------------
Net loss on investments (342,030)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 8,904,335
--------------------------------------------------------------------------
</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>
Years Ended March 31,
Increase (Decrease) in Net Assets 1997 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................. $ 9,246,365 $ 9,538,315
Net realized gains (loss) from investment transactions . 1,006,614 (514,745)
Net unrealized appreciation (depreciation) on investment
transactions ......................................... (1,348,644) 5,871,555
------------- -------------
Net increase in net assets resulting from operations ... 8,904,335 14,895,125
------------- -------------
Distributions to shareholders from net investment income (9,246,365) (9,538,315)
------------- -------------
Distributions to shareholders from net realized gains .. (174,661) --
------------- -------------
Fund share transactions:
Proceeds from shares sold .............................. 29,307,330 26,487,697
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................ 6,202,562 6,276,457
Cost of shares redeemed ................................ (45,999,331) (40,000,573)
------------- -------------
Net decrease in net assets from Fund share transactions (10,489,439) (7,236,419)
------------- -------------
Decrease in net assets ................................. (11,006,130) (1,879,609)
Net assets at beginning of period ...................... 191,653,287 193,532,896
------------- -------------
Net assets at end of period ............................ $ 180,647,157 $ 191,653,287
------------- -------------
Other Information
- ----------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .............. 17,964,551 18,645,871
------------- -------------
Shares sold ............................................ 2,742,130 2,462,070
Shares issued to shareholders in reinvestment of
distributions ........................................ 580,341 585,375
Shares redeemed ........................................ (4,300,161) (3,728,765)
------------- -------------
Net decrease in Fund shares ............................ (977,690) (681,320)
------------- -------------
Shares outstanding at end of period .................... 16,986,861 17,964,551
------------- -------------
</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>
Years Ended March 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of -----------------------------------------------------------------------------------------
period ..................... $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 .53 .53 .52 .54 .61 .65 .67 .69 .72 .73
Net realized and unrealized
gain (loss) on investment
transactions ............... (.03) .29 .11 (.35) 1.03 .50 .13 .16 .14 (.84)
Total from investment -----------------------------------------------------------------------------------------
operations ................. .50 .82 .63 .19 1.64 1.15 .80 .85 .86 (.11)
-----------------------------------------------------------------------------------------
Less distributions:
From net investment income .... (.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 ........... (.54) (.53) (.57) (1.27) (1.22) (.90) (.67) (.78) (.72) (.93)
-----------------------------------------------------------------------------------------
Net asset value, end of -----------------------------------------------------------------------------------------
period ..................... $10.63 $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (%) .............. 4.76 7.95 6.39 1.31 15.60 11.11 7.79 8.18 8.55 (.61)
Ratios and Supplemental Data
Net assets, end of period
($ millions) ............... 181 192 194 207 201 159 142 132 123 116
Ratio of operating expenses to
average daily net assets (%) .83 .82 .82 .82 .82 .87 .91 .89 .89 .95
Ratio of net investment income
to average daily net assets. 4.95 4.91 5.13 4.80 5.36 5.96 6.29 6.39 6.89 7.05
Portfolio turnover rate (%) ... 71.03 80.5 83.8 158.0 201.4 168.2 224.9 114.3 132.1 44.2
</TABLE>
26 -- Scudder New York Tax Free Fund
<PAGE>
Notes to Financial Statements
A. Significant Accounting Policies
Scudder New York Tax Free Money Fund ("Tax Free Money Fund"), a nondiversified
fund, and Scudder New York Tax Free Fund ("Tax Free Fund"), a diversified fund,
are two series of Scudder State Tax Free Trust (the "Trust"). The Trust,
currently consisting of six separate series, is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company.
The Funds' financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Funds in the
preparation of their financial statements.
Security Valuation. Tax Free Money Fund values all portfolio securities
utilizing the amortized cost method permitted in accordance with Rule 2a-7 under
the 1940 Act and pursuant to which Tax Free Money Fund must adhere to certain
conditions. Under this method, which does not take into account unrealized gains
and losses on securities, an instrument is initially valued at its cost and
thereafter assumes a constant accretion/amortization to maturity of any
discount/premium.
Tax Free Fund's portfolio debt securities with remaining maturities greater than
sixty days are valued by pricing agents approved by the Officers of the Fund,
which quotations reflect broker/dealer-supplied valuations and electronic data
processing techniques. If the pricing agents are unable to provide such
quotations, the most recent bid quotation supplied by a bona fide market maker
shall be used. Short-term investments having a maturity of sixty days or less
are valued at amortized cost. All other debt securities are valued at their fair
value as determined in good faith by the Valuation Committee of the Trustees.
Futures Contracts. A futures contract is an agreement between a buyer or seller
and an established futures exchange or its clearinghouse in which the buyer or
seller agrees to take or make a delivery of a specific amount of an item at a
specified price on a specific date (settlement date). During the year ended
March 31, 1997, the Tax Free Fund purchased interest rate futures to manage the
duration of the portfolio. Additionally, during the year ended March 31, 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 time. Certain options, including options on indices, will
require cash settlement by the Fund if the option is exercised. During
27 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
the year ended March 31, 1997, the Tax Free Fund purchased call options on
interest rate futures to manage the duration of the portfolio.
If the Fund writes an option and the option expires unexercised, the Fund will
realize income, in the form of a capital gain, to the extent of the amount
received for the option (the "premium"). If the Fund elects to close out the
option it would recognize a gain or loss based on the difference between the
cost of closing the option of the premium paid. If the Fund elects to close out
the option it would recognize a gain or loss equal to the difference between the
cost of acquiring the option and the amount realized upon the sale of the
option.
The gain or loss recognized by the Fund upon the exercise of a written call or
purchased put option is adjusted for the amount of option premium. If a written
put or purchased call option is exercised the Fund's cost basis of the acquired
security or currency would be the exercise price adjusted for the amount of the
option premium.
The liability representing the Fund's obligation under an exchange traded
written option or investment in a purchased option is valued at the last sale
price or, in the absence of a sale, the mean between the closing bid and asked
price or at the most recent asked price (bid for purchased options) if no bid
and asked price are available. Over-the-counter written or purchased options are
valued using dealer supplied quotations.
When the Fund writes a covered call option, the Fund foregoes, in exchange for
the premium, the opportunity to profit during the option period from an increase
in the market value of the underlying security or currency above the exercise
price. When the Fund writes a put option it accepts the risk of a decline in the
market value of the underlying security or currency below the exercise price.
Over-the-counter options have the risk of the potential inability of
counterparties to meet the terms of their contracts. The Fund's maximum exposure
to purchased options is limited to the premium initially paid. In addition,
certain risks may arise upon entering into option contracts including the risk
that an illiquid secondary market will limit the Fund's ability to close out an
option contract prior to the expiration date and, that a change in the value of
the option contract may not correlate exactly with changes in the value of the
securities or currencies hedged.
Amortization and Accretion. All premiums and original issue discounts are
amortized/accreted for both tax and financial reporting purposes.
Federal Income Taxes. The Funds' policy is to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment companies
and to distribute all of their taxable and tax-exempt income to their
shareholders. Accordingly, the Funds paid no federal income taxes and no
provisions for federal income taxes were required.
At March 31, 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.
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.
28 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
During any particular year, net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Funds if
not distributed and, therefore, will be distributed to shareholders. An
additional distribution may be made to the extent necessary to avoid the payment
of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined in accordance with federal tax regulations which
may differ from generally accepted accounting principles. These differences
relate primarily to investments in futures contracts.
As a result, net investment income and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from distributions
during such period. Accordingly, the Funds may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Funds.
The Funds use the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes.
Other. Investment transactions are accounted for on a trade date basis.
Distributions of net realized gains to shareholders are recorded on the
ex-dividend date. Interest income is accrued pro rata to the earlier of the call
or maturity date.
B. Purchases and Sales of Securities
During the year ended March 31, 1997, purchases and sales of long-term municipal
securities aggregated $124,477,154 and $125,514,356, respectively, for Tax Free
Fund.
The aggregate face value of futures contracts both opened and closed during the
year ended March 31, 1997 amounted to $118,969,314 and $118,969,314,
respectively, for Tax Free Fund.
C. Related Parties
Each Fund has entered into an Investment Advisory Agreement (each an "Agreement"
and collectively the "Agreements") with Scudder, Stevens & Clark, Inc. (the
"Adviser"), under which each Fund agrees to pay the Adviser a fee computed and
accrued daily and paid monthly. The annual rate is 0.50% of the average daily
net assets of Tax Free Money Fund and 0.625% of the first $200,000,000 of the
average daily net assets, and 0.60% of such net assets in excess of $200,000,000
for Tax Free Fund.
As manager of the assets of Tax Free Money Fund and Tax Free Fund, the Adviser
directs the investments of Tax Free Money Fund and Tax Free Fund in accordance
with the investment objectives, policies, and restrictions of each Fund. The
Adviser determines the securities, instruments, and other contracts relating to
investments to be purchased, sold or entered into by each Fund. In addition to
portfolio management services, the Adviser provides certain administrative
services in accordance with the Agreements.
The Agreements also provide that if the Funds' expenses, exclusive of taxes,
interest and certain other expenses exceed specified limits, such excess, up to
the amount of the management fee, will be paid by the Adviser. For the year
ended March 31, 1997, the fee for Tax Free Fund pursuant to the Agreement
amounted to $1,165,330, which was equivalent to an annual effective rate of .62%
of the Fund's average daily net assets.
29 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
With respect to Tax Free Money Fund, the Adviser has agreed not to impose all or
a portion of its management fee until July 31, 1997 and during such period to
maintain the annualized expenses of Tax Free Money Fund at not more than 0.60%
of average daily net assets. For the year ended March 31, 1997, the Adviser did
not impose a portion of its fee amounting to $143,791, and the portion imposed
amounted to $142,937.
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 year ended March 31, 1997, SFAC imposed fees amounting to
$30,000 and $53,983 of which $2,500 and $4,587 are unpaid at March 31, 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
year ended March 31, 1997, $58,369 and $119,944 were charged by SSC to Tax Free
Money Fund and Tax Free Fund, of which $4,874 and $10,181 were unpaid at March
31, 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 year ended March 31, 1997,
Trustees' fees aggregated $15,059 and $14,995 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
<PAGE>
Report of Independent Accountants
To the Trustees of Scudder State Tax Free Trust and the Shareholders of Scudder
New York Tax Free Money Fund and Scudder New York Tax Free Fund:
We have audited the accompanying statements of assets and liabilities of Scudder
New York Tax Free Money Fund and Scudder New York Tax Free Fund, including the
investment portfolios, as of March 31, 1997 and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scudder New York Tax Free Money Fund and Scudder New York Tax Free Fund as of
March 31, 1997, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and their financial highlights for each of the periods indicated therein in
conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
May 19, 1997
31 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
TAX INFORMATION
Of the dividends paid by the New York Tax Free Money Fund and New York Tax Free
Fund from net investment income for the taxable year ended March 31, 1997, 100%
constituted exempt interest dividends for regular federal income tax and New
York State and New York City income tax purposes.
Please consult a tax adviser if you have any questions about federal or state
income tax laws, or on how to prepare your tax returns. If you have specific
questions about your Scudder Fund account, please call a Scudder Investor
Relations Representative at 1-800-225-5163.
32 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
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Scudder New York Tax Free
<PAGE>
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<PAGE>
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35 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<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; President, Driscoll Associates
Peter B. Freeman
Trustee; Corporate Director and Trustee
Dudley H. Ladd*
Trustee
Wesley W. Marple, Jr.
Trustee; Professor of Business Administration, Northeastern University
Daniel Pierce*
Trustee
Jean C. Tempel
Trustee; General Partner,
TL Ventures
Donald C. Carleton*
Vice President
Philip G. Condon*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Jeremy L. Ragus*
Vice President
Rebecca Wilson*
Vice President
Thomas F. McDonough*
Vice President and Secretary
Pamela A. McGrath*
Vice President and Treasurer
Edward J. O'Connell*
Vice President and Assistant Treasurer
*Scudder, Stevens & Clark, Inc.
36 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
Investment Products and Services
The Scudder Family of Funds
- --------------------------------------------------------------------------------
Money Market
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund
Tax Free Money Market+
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*
Tax Free+
Scudder California Tax Free Fund*
Scudder High Yield Tax Free Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term
Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder Medium Term Tax Free Fund
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*
Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund
Income
Scudder Emerging Markets Income Fund
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Bond Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Growth
Scudder Capital Growth Fund
Scudder Classic Growth Fund
Scudder Development Fund
Scudder Emerging Markets Growth Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Micro Cap Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder 21st Century Growth Fund
Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
- --------------------------------------------------------------------------------
IRAs
Keogh Plans
Scudder Horizon Plan*+++ (a variable annuity)
401(k) Plans
403(b) Plans
SEP-IRAs
Profit Sharing and Money Purchase
Pension Plans
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.
Institutional Cash Management
- --------------------------------------------------------------------------------
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(TM)++
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +A portion of the income from the tax-free funds may
be subject to federal, state, and local taxes. *Not available in all states.
+++A no-load variable annuity contract provided by Charter National Life
Insurance Company and its affiliate, offered by Scudder's insurance agencies,
1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark, Inc., are
traded on various stock exchanges. ++For information on Scudder Treasurers
Trust,(TM) an institutional cash management service that utilizes certain
portfolios of Scudder Fund, Inc. ($100,000 minimum), call 1-800-541-7703.
Convenient ways to invest, quickly and reliably
- --------------------------------------------------------------------------------
37 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<PAGE>
Scudder Solutions
<TABLE>
<S> <C> <C>
Convenient ways to invest, quickly and reliably:
- --------------------------------------------------------------------------------------------------------------------------
Automatic Investment Plan AutoBuy
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 higher and electronically debited from that account.
fewer when it's lower, 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 AutoSell
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
- --------------------------------------------------------------------------------------------------------------------------
38 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<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 Developed for investors who prefer the benefits of no-load
shareholders can take advantage of a Scudder Scudder funds but want ongoing professional assistance in
Brokerage account already reserved for them, with managing a portfolio. Personal Counsel(sm) is a highly
no minimum investment. For information about customized, fee-based asset management service for
Scudder Brokerage Services, call 1-800-700-0820. 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 Funds 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 Funds Centers. Check for a Funds 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: Pathway Series
In a complex financial world, Scudder Pathway Series is a refreshingly simple concept. With one
investment, Pathway gives you instant access to broad diversification in U.S. markets and
across the globe. Select from four Portfolios -- Conservative, Balanced, Growth, or
International -- each with a distinct investment objective that can match your goals. Each
Portfolio, rather than investing in individual securities, invests in carefully selected
Scudder mutual funds.
The share price of each Pathway Series portfolio will fluctuate and the risk associated with
each portfolio is determined by the securities held in each underlying Scudder fund. 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>
39 -- Scudder New York Tax Free Money Fund
Scudder New York Tax Free
<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
