[Image] Scudder Pennsylvania Tax Free Fund Profile
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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
February 1, 1998
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1. What Is The Fund's Objective?
Scudder Pennsylvania Tax Free Fund seeks to provide Pennsylvania
taxpayers with income exempt from both Pennsylvania personal income
tax and regular federal income tax.
2. What Does The Fund Invest In?
The Fund invests in investment-grade municipal securities, including
municipal bonds (general obligation and revenue bonds), of issuers
located in Pennsylvania and other qualifying issuers (including Puerto
Rico, the U.S. Virgin Islands and Guam). Under normal market
conditions, the Fund will have at least 80% of its net assets invested
in Pennsylvania municipal securities. The Fund expects to invest
principally in Pennsylvania municipal securities with long-term
maturities (i.e., more than 10 years). The Fund may also invest in
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 municipal
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 Kemper Investments,
Inc. to be of equivalent quality, or issued or guaranteed by the U.S.
Government.The Fund may also 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 expects to invest principally in securities rated A or better
by Moody's, S&P or Fitch, or unrated securities judged by the adviser
to be of equivalent quality at the time of purchase.
The Fund may, for temporary defensive purposes, invest more than 20%
of net assets in taxable securities. 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
Pennsylvania 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 Pennsylvania 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. 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 both from Pennsylvania 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 Pennsylvania 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 Pennsylvania 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 (after expense maintenance) --
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,
during which Scudder maintained the total annualized expenses of the
Fund at 0.60% of average daily net assets. Had Scudder not done so,
total operating expenses would have amounted to 0.92%, including
0.60% for management fees. Scudder will continue this expense
maintenance until July 31, 1998.
Investment management fee (after waiver) 0.28%
12b-1 fees None
Other expenses 0.32%
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Total Fund operating expenses (after waiver) 0.60%
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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
$6 $19 $33 $75
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 is no guarantee of future results. Total return and principal
value will fluctuate. The Fund's 30-day net annualized SEC yield on
December 31, 1997 was 4.36%.
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART TITLE: Total returns for years ended December 31:
BAR CHART DATA: 1988 13.49%
1989 10.11
1990 5.82
1991 12.44
1992 9.06
1993 13.13
1994 -5.89
1995 17.38
1996 3.52
1997 8.96
The Fund's Average Annual Total Return
for the period ended December 31, 1997
One Year 8.96%
Five Years 7.11%
Ten Years 8.62%
If the adviser had not maintained the Fund's expenses, average annual
total return for the one year, five year and ten year periods would
have been lower.
7. Who Manages The Fund?
The Fund's investment adviser is Scudder Kemper Investments, Inc., one
of the nation's most experienced investment management firms. The Fund
is managed by a team of Scudder investment professionals, who each
play an important role in the Fund's management process.
Lead Portfolio Manager Philip G. Condon assumed responsibilities for
the Fund's day-to-day management and investment strategies in January
1998. Mr. Condon joined the Adviser in 1983 and has more than 17 years
of experience in municipal investing and portfolio management. Mr.
Condon has served as a portfolio manager on this team since 1988.
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 Pennsylvania 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 Kemper 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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