[Image] Scudder New York 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 New York Tax Free Fund seeks to provide New York taxpayers
with income exempt from New York state and New York City personal
income taxes and regular federal income tax.
2. What Does The Fund Invest In?
The Fund invests in municipal securities, including municipal bonds
(general obligation and revenue bonds) and notes of issuers located in
New York 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 New York
municipal securities. The Fund invests primarily in long-term (i.e.,
maturities more than 10 years) New York municipal securities. The Fund
may also invest in New York municipal securities with short- and
medium-term maturities as well, including municipal notes and variable
rate demand instruments.
Normally, at least 75% of the intermediate- and long-term securities
purchased by the Fund 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, or securities issued or guaranteed
by the U.S. Government. The Fund may also invest up to 25% of total
assets in fixed-income securities rated as low as B by Moody's, S&P or
Fitch (i.e., "junk bonds"), or if unrated, judged by the adviser to be
of equivalent quality at the time of purchase. The Fund expects to
invest principally in securities rated A or better by Moody's, S&P or
Fitch or their equivalent.
The Fund may invest up to 20% of its total assets in securities
subject to the alternative minimum tax. The Fund may also, for
temporary defensive purposes, invest more than 20% of net assets in
taxable securities.
3. What Are The Risks Of Investing In The Fund?
The Fund is more susceptible to factors adversely affecting issuers of
New York municipal securities than is a comparable municipal bond fund
that does not focus on investments of New York issuers. Changes in the
financial condition or market assessment of the financial condition of
these entities could have a significant adverse impact on the Fund.
Political events, changes in the perceived creditworthiness of issuers
and changes in interest rates will affect the Fund's 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. 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 New York 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.
In addition, because it is non-diversified, the Fund will be able to
invest in a smaller number of issuers, which will subject it to
greater market and credit risks than a diversified fund. Furthermore,
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 from both New York state and New York City 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 New York state and New York City 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 New York 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 0.62%
12b-1 fees None
Other expenses 0.21%
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Total Fund operating expenses 0.83%
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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 $26 $46 $103
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 over the past 10 years,
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 4.26%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: 1986 14.29%
1987 -0.73
1988 10.89
1989 10.01
1990 4.28
1991 14.41
1992 10.22
1993 12.92
1994 -7.19
1995 17.94
1996 3.28
The Fund's Average Annual Total Return
for the period ended September 30, 1997
One Year 9.52%
Five Years 6.90%
Ten Years 8.59%
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 managed by a team of Scudder
investment professionals who each play an important role in the Fund's
management process.
Jeremy L. Ragus, Lead Portfolio Manager, has had responsibility for
the Fund's day-to-day operations since he joined Scudder in 1990. Mr.
Ragus has 16 years of experience in municipal investing. Donald C.
Carleton, Portfolio Manager, has over 25 years of investment
management experience and has worked on the Fund's team since he
arrived at Scudder in 1983.
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 New York municipal securities
are not subject to New York state or New York City personal income
taxes or 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 gain distributions,
if any, are taxable as long-term capital gains for federal, New York
state and New York City personal 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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