[Image] Scudder Massachusetts Tax Free Fund Profile [Image]
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The fund profile, a supplement to the full prospectus, is designed as
an easy-to-read summary of fund risks, fees, and objectives. You can
click on any question to link to the Fund's prospectus and get more
information on that topic. Or, if you wish, you can proceed directly
to the Fund's prospectus. Once you have read the prospectus and
considered your investment goals, you can proceed to a Scudder Funds
application.
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Fund Profile
December 1, 1997
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1. What Is The Fund's Objective?
Scudder Massachusetts Tax Free Fund seeks to provide Massachusetts
taxpayers with income exempt from both Massachusetts personal income
tax and regular federal income tax.
2. What Does The Fund Invest In?
The Fund invests primarily (at least 80% of net assets) in
investment-grade municipal securities of issuers located in
Massachusetts and other qualifying issuers (including Puerto Rico, the
U.S. Virgin Islands and Guam). Under normal market conditions, the
Fund expects that 100% of its portfolio securities will be
Massachusetts municipal securities. The Fund invests principally in
long-term (i.e., maturities more than 10 years) Massachusetts
municipal bonds, which include general obligation and revenue bonds.
However, the Fund may also invest in securities with short- and
intermediate-term maturities, including municipal notes and variable
rate demand instruments.
The Fund seeks a higher level of income than normally provided by
tax-free money market or tax-free short-term investments. The Fund
purchases securities that it believes are attractive and competitive
values in terms of quality, yield and the relationship of current
price to maturity value. Normally, at least 75% of the Fund's
municipal securities will be investment-grade: rated Aaa, Aa, A or Baa
by Moody's Investors Service Inc. or AAA, AA, A or BBB by Standard &
Poor's or Fitch Investors Service, Inc., or if unrated, judged by the
Fund's investment adviser, Scudder, Stevens & Clark, Inc. to be of
equivalent quality. The Fund may invest up to 25% of its total assets
in fixed-income securities rated as low as B by Moody's, S&P or Fitch
(i.e., "junk bonds"), or unrated securities judged by the adviser to
be of equivalent quality.
The Fund may invest more than 20% of its net assets in taxable
securities during periods which require a defensive position. The Fund
may also invest up to 20% of its total assets in securities subject to
the alternative minimum tax.
3. What Are The Risks Of Investing In The Fund?
The Fund is more susceptible to factors adversely affecting issuers of
Massachusetts municipal securities than a comparable municipal bond
fund that does not emphasize these issuers to this degree. Political
events, changes in the perceived creditworthiness of issuers and
changes in interest rates will affect the Fund's yield and share
price, which is likely to vary from day to day. In addition, the
potential for price fluctuation is generally greater the longer the
maturity of the municipal security.
While the Fund invests primarily in investment-grade bonds, the Fund
is still exposed to market risk and changes in interest rates. There
is also a possibility the rating of a security held by the Fund may be
downgraded after it is purchased. This decrease in rating may be the
result of the inability of the state of Massachusetts or any of its
local government entities to meet its financial obligations. You incur
principal risk when you invest because your shares, when sold, may be
worth more or less than what you paid for them.
Because it is non-diversified, the Fund may invest in a smaller number
of issuers, which will subject it to greater market and credit risks
than a diversified fund.
The Fund's holdings in unrated securities and securities rated below
investment-grade (i.e., "junk bonds"), carry a greater risk of default
and more price volatility than securities rated investment-grade.
4. For Whom Is This Fund Appropriate?
You may wish to consider this Fund if you are seeking double tax-free
income -- exempt both from Massachusetts personal income tax and
regular federal income tax. Depending on your tax bracket and
individual situation, you may earn a substantially higher after-tax
return from the Fund than from comparable investments that pay income
subject to both Massachusetts state personal income tax and regular
federal income tax. Before investing, you should compare the Fund's
yield to the after-tax yield you would receive from a comparable
investment paying taxable income.
5. What Are The Fund's Expenses And Fees?
There are two kinds of expenses that a shareholder may incur, directly
or indirectly, by investing in a mutual fund. These types of expenses,
as they relate to Scudder Massachusetts Tax Free Fund are:
Shareholder transaction expenses --
Expenses charged directly to your account for various transactions.
Please note that there is a $5 service fee if you request redemption
proceeds via wire.
Sales Commission None
Commissions to Reinvest Dividends None
Redemption Fee None
Exchange Fee None
Annual Fund operating expenses --
Expenses paid by the Fund before it distributes its net investment
income, expressed as a percentage of the Fund's average daily net
assets. Figures below are for the fiscal year ended March 31, 1997.
Investment management fee 0.60%
12b-1 fees None
Other expenses 0.16%
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Total Fund operating expenses 0.76%
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Example:
Assuming a 5% annual return and redemption at the end of each
period, the total expenses relating to a $1,000 investment would be:
1 Year 3 Years 5 Years 10 Years
$8 $24 $42 $94
This example assumes reinvestment of all dividends and distributions
and that the total Fund operating expenses listed above remain the
same each year. This example should not be considered a representation
of past or future expenses or return. Actual Fund expenses and return
vary from year to year and may be higher or lower than those shown.
6. How Has The Fund Performed Historically?
This chart shows how the Fund has performed since it commenced
operations on May 28, 1987, assuming reinvestment of all
distributions. Performance is historical and may not be indicative of
future results. Total return and principal value will fluctuate. The
Fund's 30-day net annualized SEC yield on September 30, 1997 was
4.41%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: 1988 12.39%
1989 9.83
1990 6.33
1991 12.24
1992 10.84
1993 14.28
1994 6.19
1995 17.90
1996 4.07
The Fund's Average Annual Total Return
for the period ended September 30, 1997
One Year 8.38%
Five Years 7.39%
Life of Fund 9.05%
7. Who Manages The Fund?
The Fund's investment adviser is Scudder, Stevens & Clark, Inc., a
leading provider of U.S. and international investment management for
clients throughout the world. The Fund is each managed by a team of
Scudder investment professionals who play an important role in the
Fund's management process.
Philip G. Condon, Lead Portfolio Manager of the Fund, joined Scudder
in 1983 and has 17 years of experience in municipal investing and
portfolio management. Mr. Condon has had responsibility for the Fund
since 1989. Kathleen A. Meany, Portfolio Manager, has worked on the
Fund since 1988. Ms. Meany joined Scudder in 1988 and has 20 years of
municipal investment and portfolio management experience.
8. How Can I Invest?
To make it easy for you to open an account, you may invest by mail,
phone, fax, or in person. The minimum initial investment is $2,500,
except that shareholders may open an account with at least $1,000 if
an automatic investment plan of $100/month is established. Scudder
retirement plans and certain other accounts have similar or lower
minimum share balance requirements. A shareholder who maintains a
nonfiduciary account balance of less than $2,500 without establishing
an automatic investment plan, will be assessed an annual fee of
$10.00, payable to the Fund. Retirement accounts and certain other
accounts will not be assessed the $10.00 charge. You may also exchange
Fund shares free of charge within the Scudder Family of Funds.
9. How Can I Redeem Shares?
You may redeem shares at the current share price on any business day
by telephone, fax, or mail.
10. When Are Distributions Made?
Dividends are declared daily and distributed monthly. Capital gains
distributions, if any, will be made in November or December. You may
elect to receive distributions in cash or have them reinvested in
additional shares of the Fund.
Distributions derived from interest on Massachusetts municipal
securities are not subject to regular federal income taxes, except for
the possible applicability of the federal alternative minimum tax. For
federal income tax purposes, a portion of the Fund's income may be
taxable to shareholders as ordinary income. Long-term capital gains
distributions, if any, are taxable as long-term capital gains for
federal income tax purposes, regardless of the length of time
shareholders have owned their shares. Short-term capital gains and any
other taxable income distributions are taxable as ordinary income.
Distributions of tax-exempt income are taken into consideration in
computing the portion, if any, of Social Security and railroad
retirement benefits subject to federal and, in some cases, state
taxes.
11. What Services Does Scudder Provide?
As a shareholder, you'll enjoy:
o professional service from representatives who can answer your
questions and execute your transactions
o automated toll-free touchtone access to account information,
share prices and yields, and to perform transactions
o Scudder's quarterly shareholder newsletter, Scudder Perspectives
o regular, informative reports about the performance of your Fund
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[Image]Scudder wants you to make informed investment decisions. This
Fund Profile contains key information about the Fund. If you would
like more information before you invest, please consult the Fund's
accompanying prospectus. For details about the Fund's holdings or
recent investment strategies, please review the Fund's most recent
annual or semiannual report. The reports are free and may be ordered
by calling 1-800-225-2470.
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