Scudder
New York
Tax Free Money Fund
Scudder
New York
Tax Free Fund
Annual Report
March 31, 1998
Pure No-Load(TM) Funds
For investors seeking triple-tax-free income exempt from New York state and New
York City personal income taxes and regular federal income taxes.
A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
SCUDDER (logo)
<PAGE>
Scudder New York Tax Free Money Fund
- --------------------------------------------------------------------------------
Date of Inception: 5/28/87 Total Net Assets as of Ticker Symbol: SCNXX
3/31/98: $92.5 million
- --------------------------------------------------------------------------------
o Scudder New York Tax Free Money Fund offered a seven-day effective yield of
3.02% on March 31, 1998, equivalent to a 5.37% taxable yield for investors in
the top federal and state income tax brackets.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
7-Day Effective Yield on March 31, 1998
BAR CHART DATA:
-----------------------------------
Scudder New York Taxable
Tax Free Money Equivalent
Fund Yield
-----------------------------------
3.02% 5.37%
-----------------------------------
Table of Contents
4 Letter from the Fund's President 34 Report of Independent Accountants
7 Portfolio Management Discussion 35 Tax Information
12 Glossary of Investment Terms 36 Shareholder Meeting Results
13 Investment Portfolio 40 Officers and Trustees
16 Financial Statements 41 Investment Products and Services
19 Financial Highlights 42 Scudder Solutions
30 Notes to Financial Statements
2 - Scudder New York Tax Free Money Fund
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Scudder New York Tax Free Fund
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Date of Inception: 7/22/83 Total Net Assets as of Ticker Symbol: SCYTX
3/31/98: $195.7 million
- --------------------------------------------------------------------------------
o Scudder New York Tax Free Fund provided a 4.00% 30-day net annualized SEC
yield on March 31, 1998. For shareholders subject to the 43.74% maximum combined
federal and state income tax rate, the Fund's yield was equal to a taxable yield
of 7.11%. The Fund posted a solid 11.20% total return for its most recent fiscal
year ended March 31, 1998.
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
BAR CHART TITLE:
30-Day SEC Yield on March 31, 1998
BAR CHART DATA:
-----------------------------------
Taxable
Scudder New York Equivalent
Tax Free Fund Yield
-----------------------------------
4.00% 7.11%
-----------------------------------
Table of Contents
4 Letter from the Fund's President 30 Notes to Financial Statements
5 Performance Update 34 Report of Independent Accountants
6 Portfolio Summary 35 Tax Information
9 Portfolio Management Discussion 38 Shareholder Meeting Results
12 Glossary of Investment Terms 40 Officers and Trustees
20 Investment Portfolio 41 Investment Products and Services
26 Financial Statements 42 Scudder Solutions
29 Financial Highlights
3 - Scudder New York Tax Free Fund
<PAGE>
Letter from the Funds' President
Dear Shareholders,
We are pleased to report to you concerning the performance of Scudder New
York Tax Free Money Fund and Scudder New York Tax Free Fund over their most
recent fiscal year ended March 31, 1998. Scudder New York Tax Free Money Fund
posted a 5.37% tax equivalent yield based on the maximum federal and state tax
rates at the close of the period.
Scudder New York Tax Free Fund posted a 4.00% 30-day net annualized SEC
yield as of March 31, equivalent to a taxable yield of 7.11% for investors in
the top New York tax bracket. In addition, the Fund earned a solid total return
of 11.20% for the 12 months ended March 31. Please read the portfolio management
discussions beginning on page 7 for more information.
As of January 1, 1998, the Fund's investment adviser changed its name to
Scudder Kemper Investments, Inc., from Scudder, Stevens & Clark, Inc., pursuant
to the acquisition of a majority interest in Scudder, Stevens & Clark by Zurich
Insurance Company, and the combining of Scudder's business with that of Zurich
Kemper Investments, Inc. As of January 1 we also welcomed a new portfolio
management team for Scudder New York Tax Free Money Fund: Frank J. Rachwalski,
Jr., Lead Portfolio Manager, and Jerri I. Cohen, Portfolio Manager, with a
combined 42 years of investment industry experience.
For those of you interested in new Scudder products, we recently introduced
three industry sector funds as a part of our Choice Series: Scudder Financial
Services Fund, which seeks long-term growth by investing in financial services
companies in the United States and abroad; Scudder Health Care Fund, which seeks
long-term growth from health care companies located around the world; and
Scudder Technology Fund, which pursues long-term growth by investing in
companies that develop, produce, or distribute technology. In addition, April 6,
1998, marked the debut of our newest entrant in the growth and income category:
Scudder Real Estate Investment Fund, investing in equity securities of companies
in the real estate industry. Please see page 41 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 Fund. Page 42 provides more
information on how to contact Scudder. Thank you for choosing Scudder to help
meet your investment needs.
Sincerely,
/s/Daniel Pierce
Daniel Pierce
President,
Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
4 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Performance Update as of March 31, 1998
- -------------------------------------------
Fund Index Comparisons
- -------------------------------------------
Total Return
- -------------------------------------------
Period Ended Growth of Average
3/31/98 $10,000 Cumulative Annual
- -------------------------------------------
Scudder New York Tax Free Fund
- -------------------------------------------
1 Year $11,120 11.20% 11.20%
5 Year $13,554 35.54% 6.27%
10 Year $22,038 120.38% 8.22%
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Lehman Brothers Municipal Bond Index
- -------------------------------------------
1 Year $11,073 10.73% 10.73%
5 Year $13,911 39.11% 6.82%
10 Year $22,289 122.89% 8.34%
- -------------------------------------------
Growth of a $10,000 Investment
- -------------------------------------------
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Yearly periods ended March 31
Scudder New York
Tax Free Fund
Year Amount
- ---------------------
'88 $10,000
'89 $10,855
'90 $11,743
'91 $12,659
'92 $14,065
'93 $16,260
'94 $16,473
'95 $17,525
'96 $18,919
'97 $19,819
'98 $22,038
Lehman Brothers Municipal
Bond Index
Year Amount
- ---------------------
'88 $10,000
'89 $10,719
'90 $11,851
'91 $12,943
'92 $14,238
'93 $16,022
'94 $16,393
'95 $17,611
'96 $19,088
'97 $20,129
'98 $22,289
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>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
--------------------------------------------------------------------------------
Net Asset Value $10.53 $10.60 $10.73 $10.98 $11.40 $10.32 $10.38 $10.67 $10.63 $11.27
Income Dividends $ .72 $ .69 $ .67 $ .65 $ .61 $ .54 $ .52 $ .53 $ .53 $ .51
Capital Gains and
Other Distributions $ -- $ .09 $ -- $ .25 $ .61 $ .73 $ .05 $ -- $ .01 $ .02
Fund Total
Return (%) 8.55 8.18 7.79 11.11 15.60 1.31 6.39 7.95 4.76 11.20
Index Total
Return (%) 7.21 10.56 9.22 10.02 12.52 2.32 7.43 8.38 5.45 10.73
</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.
5 - Scudder New York Tax Free Fund
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Portfolio Summary as of March 31, 1998
- -------------------------------
Diversification
- -------------------------------
Core Cities/Lease 20%
State General Obligation 13%
Higher Education 11%
Water/Sewer Revenue 10%
Hospital/Health 9%
County General Obligation/
Lease 7%
Pollution Control/
Industrial Development 6%
Other General Obligation/
Lease 6%
Port/Airport Revenue 5%
Miscellaneous Municipal 13%
- -------------------------------
100%
- -------------------------------
The Fund invests in a broad
selection of New York tax-free
bonds.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- ------------------------------
Quality
- ------------------------------
AAA 47%
AA 6%
A 13%
BBB 21%
Not Rated 13%
- ------------------------------
100%
- ------------------------------
Weighted average quality: AA
Overall portfolio quality remains
high, with over 65% of portfolio
securities rated A or better as of
March 31.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- ------------------------------
Effective Maturity
- ------------------------------
Less than 1 year 2%
1-5 years 5%
5-10 years 48%
10-15 years 30%
Greater than 15 years 15%
- ------------------------------
100%
- ------------------------------
Weighted average effective maturity:
10.5 years
We continue to focus on the
purchase of noncallable bonds with
maturities of 15 years or less.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
For more complete details about the Fund's investment portfolio, see page 20.
6 - Scudder New York Tax Free Fund
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Portfolio Management Discussion
Scudder New York Tax Free Money Fund
Dear Shareholders,
During Scudder New York Tax Free Money Fund's most recent fiscal year, interest
rates of tax-exempt money fund instruments drifted downward in the face of
healthy demand for these securities, no action on interest rates by the Federal
Reserve, and a vibrant U.S. economy accompanied by low inflation. The Fund's
7-day effective yield as of March 31 was 3.02%. For investors in the highest
combined state and federal income tax bracket, the Fund's yield equaled a 5.37%
compounded taxable yield, higher than the 5.03% average for taxable money funds,
according to IBC Financial Data, Inc., an independent firm that tracks money
fund performance. Our strategy during this period was to purchase tax-exempt
commercial paper -- which enables the buyer to select a specific maturity date
- -- with three-, four-, and five-month maturities. We also attempted to obtain
attractive value by concentrating our purchases during periods of seasonal
market weakness.
With the State's economy continuing to grow, barring any downturn in the U.S.
economy caused by aftershocks from the Asian crisis we believe the New York
tax-free money market and the Fund should perform well over the coming months.
We will continue to seek to take advantage of seasonal market weakness, such as
in April, when last-minute
7 - Scudder New York Tax Free Money Fund
<PAGE>
taxpayers sell their securities and create a temporary surge of supply that
lasts into May. Our continuing goal is to provide New York Fund shareholders
with a competitive triple-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/Frank J. Rachwalski, Jr. /s/Jerri I. Cohen
Frank J. Rachwalski, Jr. Jerri I. Cohen
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 Kemper
Investments, Inc. (the "Adviser") 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 the Adviser's large staff of economists, research analysts,
traders, and other investment specialists who work in our offices across the
United States and abroad. We believe our team approach benefits Fund investors
by bringing together many disciplines and leveraging our extensive resources.
Lead Portfolio Manager Frank J. Rachwalski, Jr. assumed responsibility for the
Fund's day-to-day management in 1998. Mr. Rachwalski joined the Adviser in
1973 and he has 25 years of experience managing money market portfolios. Jerri
I. Cohen, Portfolio Manager, joined the Fund's team in January 1998. Ms.
Cohen, who has been with the Adviser since 1981, has 17 years of experience in
the financial industry including five years in tax-exempt money fund
investing.
8 - Scudder New York Tax Free Money Fund
<PAGE>
Portfolio Management Discussion
Scudder New York Tax Free Fund
Dear Shareholders,
For its most recent fiscal year ended March 31, 1998, Scudder New York Tax Free
Fund posted a solid total return as interest rates continued a slow and steady
decline against a backdrop of low inflation and healthy economic growth. The
Fund's 11.20% total return for the period consisted of a $0.64 increase in net
asset value per share to $11.27, income distributions of $0.51 per share, and a
short-term capital gain distribution of $0.02 per share. This return outpaced
the 10.49% average of 97 similar funds tracked by Lipper over the 12-month
period.
New York Update
New York State was without an approved state budget as of April 1, 1998 -- the
fourteenth consecutive year this deadline has passed unmet. The most contentious
issue preventing an agreement was how to allocate the State's $2 billion 1998
fiscal year General Fund surplus. Despite the lack of resolution on this front,
New York continues to benefit from the strength of its own economy as well as
that of the U.S. economy.
Higher than expected income tax revenues and lower than expected social service
costs accounted for New York's budget surplus. The State will use $800 million
of this surplus to finance expenditures in the 1999 fiscal year budget. The
State's economy continues to grow, though more slowly than the national economy.
New York's 1997 private sector job growth of 2%, or 115,300 jobs, was the
highest rate in ten years. The underlying strength of New York's economy
continues to lie in the finance, insurance, and real estate sectors. Companies
on Wall Street have been reaping tremendous profits resulting in higher salaries
and even higher year-end bonuses for their employees. In 1996, the State's per
capita income was $26,782 -- 18% higher than the national average.
Governor Pataki's proposed budget includes $1 billion in new debt financing for
various State projects, over one half of which is earmarked for school
construction. Due to the size of the State's budget and its high wealth levels,
we believe the State's growing debt burden and the Governor's proposed bond
issuance will not lead to a deterioration of New York's credit standing.
Steady Growth and
Low Inflation
The long-running U.S. economic scenario of moderate growth and low inflation
forges on. Asia, expected by many to export its way out of economic crisis and
in doing so derail U.S. growth, has so far increased exports only modestly. At
the same time, the U.S. bond market has benefited from Federal Reserve inaction
on interest rates, falling commodity prices, mixed economic statistics, and
portfolio rebalancing by investors who have acted to reduce the overweighting of
stocks in their portfolios. Moreover, the municipal bond market has enjoyed its
first significant increase in investor interest in four years. During the Fund's
most recent
9 - Scudder New York Tax Free Fund
<PAGE>
THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART TITLE:
Municipal Yields Compared with Inflation
March 31, 1995 - March 31, 1998
LINE CHART DATA:
-----------------------------------------------------
CPI 10-year
municipal bonds
-----------------------------------------------------
3/95 2.81 4.90
2.73 4.65
2.90 5.00
1/96 2.95 5.15
2.99 5.00
3.04 4.85
2.50 5.10
1/97 2.23 4.75
2.08 4.50
1.84 4.60
1.60 4.20
1.40 4.30
3/98 1.40 4.50
-----------------------------------------------------
(Chart indicates a 3.10% spread between the 10-year municipal bonds at 4.50%
(3/98) and the CPI at 1.40% (3/98).)
Municipal yields represented by 10-year, AAA-rated municipal bonds.
Inflation represented by CPI (Consumer Price Index).
Sources: Salomon Brothers; Datastream
- ----------
fiscal year, yields of 10-year Treasury bonds declined 1.3 percentage points and
their prices rose 9.3%, while yields of comparable municipal bonds declined
almost three quarters of a percentage point and their prices increased 5.2%.
It's important to note that in the current environment of lower municipal bond
yields, "real" interest rates -- interest rates minus increases in the CPI, a
recognized barometer of inflation -- have rarely been higher. Real interest
rates depict the level of income bondholders actually earn, taking into account
the erosion in value of their principal from inflation. The chart above
illustrates the widening gap between yield levels and inflation since March
1995.
Focus on Intermediate Noncallable Bonds
As a means of locking in a substantial income stream for Scudder New York Tax
Free Fund over time, we continue to focus on the purchase of noncallable bonds
with maturities of 15 years or less. As of March 31, over 80% of the Fund's
securities had maturities in this range. We also continue to look for
opportunities to add high yielding BBB-rated and non-rated bonds to the
portfolio. Higher yielding bonds, while carrying some additional credit risk,
generally exhibit less interest rate sensitivity than municipal bonds rated A or
above. During the most recent fiscal year, the Fund benefited from a credit
upgrade of New York City bonds from BBB to A3 by Moody's ratings service. (The
Fund previously increased its New York City holdings significantly in 1996.)
Many other New York municipal credits were also upgraded during the period,
including State lease bonds held by the Fund. (For a summary of the Fund's
quality, diversification, and maturity structure, see page 6.)
Overall portfolio quality remains high, with over 60% of portfolio securities
rated A or better at the close of the period. We continue to invest in a broad
selection of New York municipal bonds, including core cities/lease, general
obligation, and higher education bonds.
The Fund seeks to provide investors with a competitive level of federal and
state tax-exempt income as well as the best possible total return performance.
Our long-term investment strategy focuses on four basic elements: (1) purchasing
bonds with effective maturities of 15 years or less;
10 - Scudder New York Tax Free Fund
<PAGE>
(2) purchasing noncallable bonds at yields close to those of callable bonds with
comparable maturities; (3) purchasing high-yielding callable bonds, and (4)
diversifying investments based on careful credit selection.
Outlook
In the words of Federal Reserve Chairman Greenspan, the U.S. economy delivered
"exemplary performance" in 1997, with real GNP growth of 3.8%. We believe this
level of growth will be difficult to maintain in 1998 because of two current
drags on the economy -- burdensome consumer debt, and a high level of corporate
write-offs -- and one that still looms -- possible economic fallout from Asia's
troubles. Any slowdown from current levels of growth would provide a basis for a
sustained decline in interest rates and favorable bond market performance. At
the same time, we believe that the Fed will stand ready to raise interest rates
at the first sign of runaway growth.
We will continue our focus on noncallable municipal bonds with maturities of 15
years or less as we seek to boost yield and achieve attractive long-term returns
for our investors. In addition, we will attempt to limit volatility by
maintaining a neutral average maturity and high overall credit quality as we
pursue triple-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/Christopher J. Mier
Jeremy L. Ragus Christopher J. Mier
Scudder New York
Tax Free Fund:
A Team Approach to Investing
Scudder New York Tax Free Fund is managed by a team of Scudder Kemper
Investments, Inc. (the "Adviser") 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 the Adviser's large staff of economists, research analysts,
traders, and other investment specialists who work in our offices across the
United States and abroad. We believe our team approach benefits Fund investors
by bringing together many disciplines and leveraging our extensive resources.
Lead Portfolio Manager Jeremy L. Ragus has had responsibility for the Fund's
day-to-day management since 1990. Mr. Ragus, who joined the Adviser in 1990,
has 16 years of experience in municipal investing. Christopher J. Mier,
Portfolio Manager, joined the Fund's management team in 1998. Mr. Mier, who
has been with the Adviser since 1986, has more than 20 years of experience in
municipal investing and portfolio management.
11 - Scudder New York Tax Free Fund
<PAGE>
Glossary of Investment Terms
BOND An interest-bearing security issued by the
federal, state, or local government or a
corporation that obligates the issuer to pay
the bondholder a specified amount of interest
for a stated period -- usually a number of
years -- and to repay the face amount of the
bond at its maturity date.
GENERAL OBLIGATION BOND A municipal bond backed by the "full faith
and credit" (including the taxing and further
borrowing power) of the city, state, or
agency that issues the bond. A general
obligation bond is repaid with the issuer's
general revenue and borrowings.
INFLATION An overall increase in the prices of goods
and services, as happens when business and
consumer spending increases relative to the
supply of goods available in the marketplace
-- in other words, when too much money is
chasing too few goods. High inflation has a
negative impact on the prices of fixed-income
securities.
MUNICIPAL BOND An interest-bearing debt security issued by a
state or local government entity.
NET ASSET VALUE (NAV) The price per share of a mutual fund based on
the sum of the market value of all the
securities owned by the fund divided by the
number of outstanding shares.
TAXABLE EQUIVALENT YIELD The level of yield a fully taxable instrument
would have to provide to equal that of a
tax-free municipal bond on an after-tax
basis.
30-DAY SEC YIELD The standard yield reference for bond funds,
based on a formula prescribed by the SEC.
This annualized yield calculation reflects
the 30-day average of the income earnings of
every holding in a given fund's portfolio,
net of expenses, assuming each is held to
maturity.
TOTAL RETURN The most common yardstick to measure the
performance of a fund. Total return --
annualized or compound -- is based on a
combination of share price changes plus
income and capital gain distributions, if
any, expressed as a percentage gain or loss
in value.
(Sources: Scudder Kemper Investments, Inc.; Barron's Dictionary of Finance and
Investment Terms)
12 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Investment Portfolio as of March 31, 1998
<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, AMT, 3.55%, 2/1/17* ........................... 2,300,000 A1 2,300,000
Buffalo, NY, Revenue Anticipation Notes, 4.4%, 8/5/98 ........................... 1,000,000 SP1+ 1,001,953
Erie County, NY, Water Authority, Waterworks Revenue, Weekly Demand Bonds,
3.45%, 12/1/16 (c)* ........................................................... 2,000,000 A1+ 2,000,000
Freeport Union Free School District, NY, Tax Anticipation Note, 4.25%, 6/29/98 .. 1,500,000 SKI 1,500,880
Hempstead, NY, Industrial Development Agency, Trigen-Nassua Energy Corporation,
Weekly Demand Note, AMT, 3.55%, 9/15/15* ...................................... 1,000,000 A1+ 1,000,000
Monroe County, NY, General Obligation, Tax Exempt Commercial Paper, Series 1997,
3.25%, 5/11/98 ................................................................ 1,000,000 A1+ 1,000,000
Monroe County, NY, Industrial Development Agency, Office Building Associates,
Series 1992, Weekly Demand Note, 3.45%, 10/1/00* .............................. 1,499,000 P1 1,499,000
Municipal Assistance Corp. for New York City:
Series 1996G, 4.5%, 7/1/98 .................................................... 1,500,000 AA 1,502,357
Series K1, Weekly Demand Note, 3.5%, 7/1/08* .................................. 2,000,000 A1+ 2,000,000
Series K2, Adjustable Weekly, 3.5%, 7/1/08* ................................... 3,600,000 A1+ 3,600,000
Tax Exempt Commercial Paper, 3.45%, 5/5/98 .................................... 1,500,000 A1+ 1,500,000
Tax Exempt Commercial Paper, 3.45%, 5/18/98 ................................... 2,000,000 A1+ 2,000,000
Tax Exempt Commercial Paper, 3.3%, 6/15/98 .................................... 2,000,000 A1+ 2,000,000
Nassua County, NY, Tax Anticipation Note, 4.25%, 12/22/98 ....................... 1,000,000 SP1 1,002,934
New York City Health and Hospital Corporation Revenue, Series 1997 A, Weekly
Demand Note, 3.5%, 2/15/26* ................................................... 1,000,000 A1+ 1,000,000
New York City, Housing Development Corporation, Revenue Bonds, Weekly Demand
Note, 3.5%, 5/1/30* ........................................................... 1,000,000 A1 1,000,000
New York City, Industrial Development Agency, Korean Airlines, Series 1997 A,
Weekly Demand Note, 3.6%, 11/1/24* ............................................ 2,000,000 MIG1 2,000,000
New York City Municipal Water Finance Authority, Daily Demand Note:
3.85%, 6/15/22 (c)* ........................................................... 200,000 MIG1 200,000
3.85%, 6/15/24 (c)* ........................................................... 300,000 MIG1 300,000
New York City, NY, General Obligation:
Series 1993B, Daily Demand Note, 3.8%, 10/1/20 (c)* ........................... 200,000 A1+ 200,000
Series 1993B, Daily Demand Note, 3.8%, 10/1/22 (c)* ........................... 300,000 A1+ 300,000
Series 1994A-4, Daily Demand Note, 3.85%, 8/1/22* ............................. 200,000 MIG1 200,000
Series 1994B-2, Daily Demand Note, 3.85%, 8/15/03 (c)* ........................ 1,500,000 MIG1 1,500,000
New York City, NY, Revenue Anticipation Notes, Series 1997 A, 4.5%, 6/30/98 ..... 2,000,000 SP1+ 2,003,077
</TABLE>
The accompanying notes are an integral part of the financial statements.
13 - Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York City, NY, Tax Exempt Commercial Paper, General Obligation:
3.45%, 4/20/98 (c) ............................................................ 1,000,000 A1+ 1,000,000
3.45%, 5/11/98 ................................................................ 2,400,000 A1+ 2,400,000
New York Metropolitan Transportation Authority, Daily Demand Note, 3.85%,
1/1/18 (c)* ................................................................... 3,000,000 MIG1 3,000,000
New York State Energy Research and Development Authority:
Gas Facilities Revenue Bonds, Weekly Demand Note, 3.6%, 12/1/20 (c)* .......... 1,000,000 A1+ 1,000,000
Long Island Lighting Co., Weekly Demand Note, 3.55%, 12/1/27* ................. 4,000,000 MIG1 4,000,000
New York State Electric & Gas Co.:
1994 Series C, Daily Demand Note, 3.65%, 6/1/29* ............................. 1,565,000 A1+ 1,565,000
1994 Series D, Daily Demand Note, 3.65%, 10/1/29* ............................ 1,400,000 A1+ 1,400,000
Pollution Control Revenue, Niagara Mohawk Co.:
1985 Series A, Daily Demand Note, 3.95%, 7/1/15* ............................. 200,000 A1+ 200,000
1985 Series B, Daily Demand Note, 3.75%, 12/1/25* ............................ 200,000 P1 200,000
1985 Series C, Daily Demand Note, 3.75%, 12/1/25* ............................ 200,000 P1 200,000
1987 Series B, Daily Demand Note, AMT, 4%, 7/1/27* ........................... 300,000 A1+ 300,000
Pollution Control Revenue, Orange & Rockland Utilities, Weekly Demand Notes,
3.45%, 10/1/14 (c)* .......................................................... 2,100,000 MIG1 2,100,000
New York State Housing Finance Agency:
Hospital for Special Surgery, Weekly Demand Bonds, 3.3%, 11/1/10* ............. 2,110,000 MIG1 2,110,000
Normandie Court 1 Housing Revenue, Weekly Demand Bond, 3.5%, 5/15/15* ......... 3,900,000 MIG1 3,900,000
Tribeca Landing Housing, Revenue Bonds, Weekly Demand Note, AMT,
Series 1997A, 3.5%, 11/1/30* ................................................. 2,000,000 A1 2,000,000
New York State Job Development Authority:
Special Purpose, Series B1-21, Daily Demand Note, AMT, 3.8%, 3/1/05* .......... 830,000 MIG1 830,000
Variable Rate Demand Bond, Series 1984F, 4.1%, 3/1/99* ........................ 495,000 MIG1 495,000
New York State Local Government Assistance Corporation, Series 1993 A,
Weekly Demand Note, 3.45%, 4/1/22* ............................................ 1,000,000 MIG1 1,000,000
New York State Medical Care Facilities Finance Agency, Children's Hospital of
Buffalo, Weekly Demand Bond, 3.5%, 11/1/05* ................................... 2,500,000 MIG1 2,500,000
New York State, Tax Exempt Commercial Paper:
Bond Anticipation Notes, 3.65%, 6/18/98 ....................................... 2,000,000 A1 2,000,000
Dormitory Authority, 3.45%, 5/7/98 ............................................ 200,000 A1 200,000
Environmental Facilities Corp., 3.45%, 6/22/98 ................................ 2,000,000 A1+ 2,000,000
Environmental Quality, 3.6%, 4/9/98 ........................................... 1,500,000 A1+ 1,500,000
Environmental Quality Control, 3.4%, 6/8/98 ................................... 1,000,000 A1+ 1,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
14 - Scudder New York Tax Free Money Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Value ($)
Amount ($) (Unaudited) (Note A)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Environmental Quality Control, 3.5%, 6/3/98 ................................... 3,000,000 A1+ 3,000,000
Power Authority of New York, 3.25%, 5/6/98 .................................... 1,500,000 A1 1,500,000
Power Authority of New York, 3.5%, 5/11/98 .................................... 2,000,000 A1 2,000,000
Onondaga County, NY, Industrial Development Agency, Southern Container Corp.,
Weekly Demand Note, AMT, 3.55%, 8/1/07* ....................................... 1,500,000 SKI 1,500,000
Port Authority of New York and New Jersey, Tax Exempt Commercial Paper, AMT:
3.15%, 4/3/98 ................................................................. 1,370,000 A1+ 1,370,000
3.5%, 6/25/98 ................................................................. 960,000 A1+ 960,000
Schenectady, NY, Industrial Development Revenue, 3.5%, 6/1/09* .................. 2,070,000 P1 2,070,000
Suffolk County, NY, Tax Anticipation Notes, 4.25%, 8/13/98 ...................... 4,000,000 SP1+ 4,009,013
Triborough Bridge and Tunnel Authority, NY, Special Obligation, Weekly Demand
Bonds, 3.45%, 1/1/24 (c)* ..................................................... 4,600,000 MIG1 4,600,000
Ulster County, NY, Bond Anticipation Notes, 4.5%, 5/15/98 ....................... 1,908,000 SKI 1,908,883
West Babylon Union Free School District, NY, Tax Anticipation Notes,
4.25%, 6/25/98 ................................................................ 1,500,000 SKI 1,501,006
Puerto Rico
Commonwealth of Puerto Rico Tax and Revenue Anticipation Notes, Series 1997 A,
4.5%, 7/30/98 ................................................................. 4,000,000 SP1+ 4,011,355
- ------------------------------------------------------------------------------------------------------------------------------
Total Municipal Investments (Cost $97,940,458) 97,940,458
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $97,940,458) (a) 97,940,458
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $97,940,458.
(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 Kemper Investments, Inc. (SKI) have been
determined by the Adviser 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.
AMT: Alternative minimum tax
The accompanying notes are an integral part of the financial statements.
15 - Scudder New York Tax Free Money Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of March 31, 1998
<TABLE>
<S> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at value (identified cost $97,940,458) .................. $ 97,940,458
Cash ................................................................. 253,584
Interest receivable .................................................. 646,851
Receivable for Fund shares sold ...................................... 160,939
Other assets ......................................................... 1,368
----------------
Total assets ......................................................... 99,003,200
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed ..................................... 6,395,683
Dividends payable .................................................... 22,626
Accrued management fee ............................................... 46,042
Other payables and accrued expenses .................................. 24,809
----------------
Total liabilities .................................................... 6,489,160
-------------------------------------------------------------------------------------------
Net assets, at value $ 92,514,040
-------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Accumulated net realized gain (loss) ................................. (52,500)
Paid-in capital ...................................................... 92,566,540
-------------------------------------------------------------------------------------------
Net assets, at value $ 92,514,040
-------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($92,514,040 / 92,516,860 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.
16 - Scudder New York Tax Free Money Fund
<PAGE>
Statement of Operations
year ended March 31, 1998
<TABLE>
<CAPTION>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Interest ............................................................. $ 2,439,038
----------------
Expenses:
Management fee ....................................................... 337,692
Services to shareholders ............................................. 78,469
Custodian and accounting fees ........................................ 40,959
Trustees' fees and expenses .......................................... 16,816
Auditing ............................................................. 24,276
Reports to shareholders .............................................. 10,571
Legal ................................................................ 6,329
Registration fees .................................................... 5,905
Other ................................................................ 8,266
----------------
Total expenses before reductions ..................................... 529,283
Expense reductions ................................................... (122,374)
----------------
Expenses, net ........................................................ 406,909
-------------------------------------------------------------------------------------------
Net investment income 2,032,129
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 2,032,129
-------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17 - 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 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ....................................... $ 2,032,129 $ 1,613,526
---------------- ----------------
Distributions to shareholders from net investment
income .................................................... (2,032,129) (1,613,526)
---------------- ----------------
Fund share transactions at net asset value of $1.00
per share:
Shares sold ................................................. 133,210,045 52,781,839
Net asset value of shares issued to shareholders in
reinvestment of distributions ............................. 1,770,083 1,405,013
Shares redeemed ............................................. (102,004,740) (53,062,079)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions .............................................. 32,975,388 1,124,773
---------------- ----------------
Increase (decrease) in net assets ........................... 32,975,388 1,124,773
Net assets at beginning of period ........................... 59,538,652 58,413,879
---------------- ----------------
Net assets at end of period ................................. $92,514,040 $59,538,652
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 - 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>
Years Ended March 31,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------------------------------------
<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 ............ .030 .028 .031 .025 .017 .022 .035 .046 .052 .047
Distributions from net
investment income ............. (.030) (.028) (.031) (.025) (.017) (.022) (.035) (.046) (.052) (.047)
Net asset value, end of -----------------------------------------------------------------------------------
period ........................ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
-----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Total Return (%) (a) ............. 3.06 2.85 3.18 2.57 1.75 2.22 3.55 4.69 5.33 4.78
Ratios and Supplemental Data
Net assets, end of period
($ millions) .................. 93 60 58 55 47 40 36 40 36 41
Ratio of operating expenses, net
to average daily net
assets (%) .................... .60 .60 .60 .60 .60 .60 .60 .60 .60 .53
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) .......... .78 .85 .86 .89 .97 .97 1.01 1.08 1.08 .98
Ratio of net investment income to
average daily net assets (%) .. 3.00 2.81 3.13 2.56 1.73 2.19 3.46 4.57 5.21 4.76
</TABLE>
(a) Total returns would have been lower had certain expenses not been reduced.
19 - Scudder New York Tax Free Money Fund
<PAGE>
Investment Portfolio as of March 31, 1998
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
Short-Term Municipal Investments 2.2%
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York
New York City Municipal Water Finance Authority, Variable Rate Demand Note,
3.85%, 6/15/24* (c) .......................................................... 300,000 MIG1 300,000
New York City, NY, General Obligation:
Daily Demand Note, 3.85%, 8/1/23* ............................................ 1,100,000 MIG1 1,100,000
Series A-5, Daily Demand Note, 3.85%, 8/1/16* ................................ 700,000 A1+ 700,000
Series A-4, Daily Demand Note, 3.85%, 8/1/22* ................................ 500,000 MIG1 500,000
Series B, Daily Demand Note, 3.8%, 10/1/20 (c)* .............................. 100,000 A1+ 100,000
Series B, Floating Rate, 3.85%, 8/15/03 (c)* ................................. 100,000 MIG1 100,000
Series 1995B, 3.7%, 8/15/05 (c)* ............................................. 400,000 MIG1 400,000
New York State Energy Research & Development Daily Demand Note,
3.65%, 6/1/29* ............................................................... 1,000,000 A1+ 1,000,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Municipal Investments (Cost $4,200,000) 4,200,000
- ------------------------------------------------------------------------------------------------------------------------------
Long-Term Municipal Investments 97.8%
- ------------------------------------------------------------------------------------------------------------------------------
New York
34th Street Partnership Inc., NY, Capital Improvement, 5.5%, 1/1/14 ............ 1,900,000 A 1,930,856
Albany County Airport Revenue:
Series 1997, 5.375%, 12/15/17 (c) ............................................ 1,000,000 AAA 1,007,254
Series 1997, 5.5%, 12/15/19 (c) .............................................. 1,000,000 AAA 1,024,210
Albany, NY, General Obligation, 7%, 1/15/08 (c) ................................ 485,000 AAA 518,999
Canandaigua, NY, School District, General Obligation:
6.4%, 6/1/08 (c) ............................................................. 500,000 AAA 575,905
6.5%, 6/1/11 (c) ............................................................. 550,000 AAA 645,739
Chautauqua County, NY:
7.3%, 4/1/08 (c) ............................................................. 575,000 AAA 701,431
7.3%, 4/1/09 (c) ............................................................. 575,000 AAA 706,169
Series 1990, 7.3%, 4/1/07 (c) ................................................ 465,000 AAA 560,641
Series 1990, 6.4%, 9/15/08 (c) ............................................... 520,000 AAA 600,730
Dutchess County, NY, Resource Recovery, General Obligation, 7.5%, 1/1/09 (c) ... 1,000,000 AAA 1,073,450
Erie County, New York, Public Improvement Unlimited, Series 1992,
6.125%, 1/15/12 (c) .......................................................... 590,000 AAA 669,414
Glen Cove Housing Authority, Series 1996, AMT, 8.25%, 10/1/26 .................. 1,500,000 NR 1,672,965
Inverse Variable Rate Certificate Trust, Metropolitan Transit Authority,
Series 1993 B, 6.52%, 6/30/02 (c)** .......................................... 8,000,000 NR 8,760,000
Islip New York Community Development Agency, 7.5%, 3/1/26 ...................... 4,000,000 NR 4,435,600
</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>
Jamestown, New York, General Obligation:
Series 1991 A, 7%, 3/15/07 (c) ............................................... 725,000 AAA 857,958
Series 1991 A, 7%, 3/15/08 (c) ............................................... 600,000 AAA 717,156
Monroe County, NY, General Obligation:
Series 1996, 6%, 6/1/06 ...................................................... 500,000 AA 553,990
Series 1996, 6%, 3/1/13 ...................................................... 1,050,000 AA 1,179,486
Series 1996, 6%, 3/1/14 ...................................................... 1,040,000 AA 1,167,837
Series 1996, 6%, 3/1/17 ...................................................... 1,410,000 AA 1,592,285
Municipal Assistance Corp. for New York City Revenue, Series I, 6.25%, 7/1/07 .. 1,575,000 AA 1,782,821
Nassau County, NY, General Obligation:
Series A, 6%, 7/1/11 (c) ..................................................... 1,780,000 AAA 2,000,524
Series 1993G, 5.4%, 1/15/10 (c) .............................................. 1,655,000 AAA 1,761,913
New York State Dormitory Authority Revenue, 6.5%, 2/15/11 ...................... 1,000,000 AAA 1,150,320
New York City Housing Authority, Multi-Family Revenue:
Series A, 5.35%, 7/1/07 ...................................................... 500,000 A 514,400
Series A, 5.65%, 7/1/10 ...................................................... 1,000,000 A 1,036,150
New York City Municipal Water Finance Authority, Water & Sewer System:
Series A, 5.125%, 6/15/21 .................................................... 1,000,000 A 976,710
1993 Series A, 5.875%, 6/15/13 (c) ........................................... 2,750,000 AAA 3,053,628
New York City Transitional Finance Authority, Revenue Bonds, Series A,
5%, 8/15/27 .................................................................. 2,000,000 AA 1,928,320
New York City, Industrial Development Agency:
Brooklyn Navy Yard, Revenue Bonds, 6.2%, 10/1/22 ............................. 1,250,000 BBB 1,399,638
Civil Facility Revenue, YMCA Greater New York Project:
Series 1997, 6%, 8/1/06 ..................................................... 580,000 BBB 621,540
Series 1997, 5.85%, 8/1/08 .................................................. 600,000 BBB 638,226
Series 1997, 5.8%, 8/1/16 ................................................... 1,000,000 BBB 1,043,480
Japan Air Lines, Series 1996, 6%, AMT, 11/1/15 (c) ........................... 1,000,000 AAA 1,068,740
New York City, NY, General Obligation:
6.25%, 4/15/07 (c) ........................................................... 2,000,000 AAA 2,249,620
6%, 4/15/09 .................................................................. 2,000,000 AAA 2,167,400
7.25%, 8/15/07 ............................................................... 2,250,000 A 2,662,920
NC Series 1996 A, 6.25%, 8/1/09 .............................................. 5,175,000 BBB 5,737,264
Series 1996 A, 7%, 8/1/05 .................................................... 5,000,000 BBB 5,709,300
Series B, 7.5%, 2/1/05 ....................................................... 2,500,000 A 2,786,666
</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>
Series 1996 A, 7%, 8/1/06 .................................................... 5,000,000 BBB 5,770,050
Series B, 8.25%, 6/1/06 ...................................................... 2,750,000 A 3,391,410
Series B1, Prerefunded 7.3%, 8/15/10 ......................................... 45,000 AAA 52,933
Series E, 8%, 8/1/05 (c) ..................................................... 330,000 AAA 402,818
Series L, 5.625%, 8/1/07 ..................................................... 3,250,000 A 3,459,625
New York City, NY, Industrial Development Agency:
Civil Facilities, USTA National Tennis Center:
6.1%, 11/15/04 (c) .......................................................... 1,215,000 AAA 1,339,805
6.25%, 11/15/06 (c) ......................................................... 3,000,000 AAA 3,358,800
Visy Paper Inc. Project, Series 1995, 7.95%, 1/1/28 .......................... 2,250,000 NR 2,622,533
New York State Dormitory Authority Revenue:
6.5%, 5/15/06 ................................................................ 2,000,000 BBB 2,256,440
5.75%, 7/1/09 (c) ............................................................ 1,000,000 AAA 1,097,270
6.5%, 2/15/10 ................................................................ 1,500,000 A 1,719,840
6%, 2/15/12 .................................................................. 2,500,000 A 2,747,800
College and University Pooled Capital Program, 7.8%,12/1/05 (c) .............. 3,220,000 AAA 3,353,855
Columbia University, 5%, 7/1/15 .............................................. 2,500,000 AAA 2,471,350
Columbia University, NY, Revenue, 6%, 7/1/10 ................................. 1,000,000 A 1,083,530
City University Series 1995A, 5.625%, 7/1/16 ................................. 2,750,000 BBB 2,906,475
City University System Series 1995 A, 5.625%, 7/1/16 (c) ..................... 1,100,000 AAA 1,187,076
Mental Health Services Facilities Series 1997 B, 5.625%, 2/15/21 (c) ......... 500,000 AAA 519,130
Montefiore Medical Center, Series 1996:
6%, 8/1/08 (c) .............................................................. 2,000,000 AAA 2,231,580
6%, 2/1/09 (c) .............................................................. 2,000,000 AAA 2,231,220
Mt. Sinai School of Medicine, Series B, 5.7%, 7/1/11 (c) ..................... 1,825,000 AAA 2,001,441
Nyack Hospital:
NC, Series 1996, 6%, 7/1/06 ................................................. 1,000,000 A 1,078,050
Series 1996, 6.25%, 7/1/13 .................................................. 500,000 A 536,735
Pace University:
6.5%, 7/1/08 (c) ............................................................ 1,360,000 AAA 1,576,417
6.5%, 7/1/09 (c) ............................................................ 555,000 AAA 646,225
Saint Josephs Hospital, Series 1997, 5.25%, 7/1/18 (c) ....................... 1,000,000 AAA 999,910
State University Educational Facility, Series A, 5.875%, 5/15/11 ............. 2,250,000 BBB 2,460,353
State University, Series 1993A, 5.875%, 5/15/11 (c) .......................... 380,000 AAA 422,153
Upstate Community College, 5.8%, 7/1/06 ...................................... 1,075,000 BBB 1,152,733
</TABLE>
The accompanying notes are an integral part of the financial statements.
22 - Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New York State Environmental Facilities Corporation:
NC Series 1994, 5.75%, 6/15/10 ............................................... 1,750,000 AA 1,917,353
State Water Revolving Fund, Series D, 6.9%, 5/15/15 .......................... 1,630,000 AAA 1,870,996
Special Obligation Revenue, Riverbank State Park:
Series 1996, 6.25%, 4/1/07 (c) .............................................. 2,055,000 AAA 2,320,362
Series 1996, 6.25%, 4/1/08 (c) .............................................. 2,185,000 AAA 2,482,663
New York State Health Facilities Authority, 6.375%, 11/1/04 .................... 2,000,000 BBB 2,200,780
New York State Mortgage Agency Revenue, AMT, Series 1994, 6.8%, 10/1/05 ........ 1,000,000 AA 1,067,510
New York State Throughway Authority General Revenue, Capital Appreciation
Special Obligation, Series 1991 A, Zero Coupon, 1/1/06 ....................... 2,905,000 NR 2,002,271
New York State Urban Development Corp. Revenue:
5.7%, 4/1/09 (c) ............................................................. 4,250,000 AAA 4,627,060
5.5%, 1/1/14 (c) ............................................................. 2,000,000 AAA 2,128,220
Correctional Capital Facilities, NC Series 95, 5.375%, 1/1/15 (c) ............ 2,000,000 AAA 2,040,140
Series 1996 A, 6.25%, 4/1/05 (c) ............................................. 1,375,000 AAA 1,525,961
New York, Brooksdale Hospital Medical Center, Revenue Bonds, 5.2%, 2/15/16 ..... 2,000,000 A 1,966,520
New York, Revenue Bonds:
Crouse Health Hospital, 5.25%, 1/1/16 ........................................ 1,000,000 BBB 982,360
Crouse Health Hospital, 5.375%, 1/1/23 ....................................... 1,000,000 BBB 989,110
Local Government Assistance Corporation, 5.25%, 4/1/16 (c) ................... 1,185,000 AAA 1,231,345
Presbyterian Hospital, 5.5%, 2/1/10 (c) ...................................... 2,000,000 AAA 2,127,000
St. Clare's Hospital of New York City, 5.125%, 2/15/12 ....................... 500,000 AAA 493,380
Urban Development Corporation, Correctional Facilities, 5%, 1/1/28 ........... 1,000,000 AAA 949,520
Vassar Brothers Hospital, 5.5%, 7/1/08 (c) ................................... 1,000,000 AAA 1,068,600
Niagara County, NY, General Obligation, 7.1%, 2/15/11 (c) ...................... 500,000 AAA 613,240
Niagara Falls, NY, Water Treatment Plant, Subject to AMT:
7%, 11/1/03 (c) .............................................................. 2,260,000 AAA 2,558,727
8.5%, 11/1/05 (c) ............................................................ 2,140,000 AAA 2,683,132
8.5%, 11/1/06 (c) ............................................................ 1,240,000 AAA 1,582,724
Oswego County, NY, General Obligation Series 1991, 6.7%, 6/15/12 ............... 1,100,000 A 1,311,090
Port Authority of New York & New Jersey:
NC Series 1996, 7%, 10/1/07 .................................................. 3,500,000 NR 3,966,200
Special Obligation Revenue, JFK International Air Terminal:
6.25%, 12/1/10 (c) .......................................................... 2,500,000 AAA 2,838,325
6.25%, 12/1/11 (c) .......................................................... 2,500,000 AAA 2,846,550
</TABLE>
The accompanying notes are an integral part of the financial statements.
23 - Scudder New York Tax Free Fund
<PAGE>
<TABLE>
<CAPTION>
Credit
Principal Rating (b) Market
Amount ($) (Unaudited) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shenendehowa Central School District, NY, Clifton Park:
6.85%, 6/15/08 (c) ........................................................... 350,000 AAA 417,193
6.85%, 6/15/09 (c) ........................................................... 350,000 AAA 418,527
Suffolk County, NY, Industrial Development Agency, Southwest Sewer System,
6%, 2/1/07 (c) ............................................................... 500,000 AAA 553,365
Troy, New York, Municipal Assistance Corporation:
Series 1996 A, 5%, 1/15/16 (c) ............................................... 500,000 AAA 492,435
Series 1996 A, 5%, 1/15/22 (c) ............................................... 2,130,000 AAA 2,069,231
Zero Coupon Series, 1996 A, 1/15/07 (c) ...................................... 650,000 AAA 441,110
Zero Coupon Series, 1996 A, 7/15/07 (c) ...................................... 650,000 AAA 431,490
Zero Coupon Series, 1996 A, 1/15/08 (c) ...................................... 750,000 AAA 484,223
Zero Coupon Series, 1996 A, 1/15/09 (c) ...................................... 650,000 AAA 398,359
Zero Coupon Series, 1996 A, 7/15/09 (c) ...................................... 350,000 AAA 209,689
Zero Coupon Series, 1996 A, 7/15/10 (c) ...................................... 600,000 AAA 339,420
Valley Central School District, Montgomery, NY, 7.15%, 6/15/08 (c) ............. 625,000 AAA 757,000
Puerto Rico
Commonwealth of Puerto Rico, General Obligation, 4.5%, 7/1/23 .................. 1,000,000 A 899,540
Virgin Islands
Virgin Islands, Special Tax Bonds, Hugo Bonds, 7.75%, 10/1/06 .................. 1,310,000 NR 1,457,139
Virgin Islands, General Obligation, Public Finance Authority, Mortgage
Fund Loan Notes, Series 1992 A, 7%, 10/1/02 .................................. 500,000 BBB 549,770
- ------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Municipal Investments (Cost $175,131,640) 188,628,842
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $179,331,640) (a) 192,828,842
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost for federal income tax purposes was $179,335,012. At March 31,
1998, net unrealized appreciation for all securities based on tax cost was
$13,493,830. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $13,558,942 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$65,112.
(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 by the Investment Adviser to be of
comparable quality to rated eligible securities.
(c) Bond is insured by one of these companies: AMBAC, FGIC, FSA, FHA or
MBIA/BIG.
AMT: Alternative minimum tax
The accompanying notes are an integral part of the financial statements.
24 - Scudder New York Tax Free Fund
<PAGE>
- --------------------------------------------------------------------------------
* 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, 1998.
The accompanying notes are an integral part of the financial statements.
25 - Scudder New York Tax Free Fund
<PAGE>
Financial Statements
Statement of Assets and Liabilities
as of March 31, 1998
<TABLE>
<S> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at market (identified cost $179,331,640) .............. $ 192,828,842
Cash ............................................................... 393,425
Interest receivable ................................................ 2,972,427
Receivable for Fund shares sold .................................... 267,814
Other assets ....................................................... 5,475
----------------
Total assets ....................................................... 196,467,983
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Dividends payable .................................................. 263,125
Payable for Fund shares redeemed ................................... 328,312
Accrued management fee ............................................. 108,054
Other payables and accrued expenses ................................ 37,096
----------------
Total liabilities .................................................. 736,587
-------------------------------------------------------------------------------------------
Net assets, at market value $ 195,731,396
-------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net assets consist of:
Unrealized appreciation (depreciation) on investments .............. 13,497,202
Accumulated net realized gain (loss) ............................... (6,609,127)
Paid-in capital .................................................... 188,843,321
-------------------------------------------------------------------------------------------
Net assets, at market value $ 195,731,396
-------------------------------------------------------------------------------------------
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
($195,731,396 / 17,368,966 outstanding shares of beneficial
interest, $.01 par value, unlimited number of shares ----------------
authorized) ...................................................... $11.27
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
26 - Scudder New York Tax Free Fund
<PAGE>
Statement of Operations
year ended March 31, 1998
<TABLE>
<CAPTION>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income:
Interest ........................................................... $ 10,294,704
----------------
Expenses:
Management fee ..................................................... 1,184,089
Services to shareholders ........................................... 166,409
Custodian and accounting fees ...................................... 96,374
Trustees' fees and expenses ........................................ 18,117
Auditing ........................................................... 30,585
Reports to shareholders ............................................ 33,696
Legal .............................................................. 13,244
Registration fees .................................................. 6,655
Other .............................................................. 9,876
----------------
1,559,045
-------------------------------------------------------------------------------------------
Net investment income 8,735,659
-------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment transactions
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from:
Investments ........................................................ 680,031
Futures ............................................................ (10,387)
Options ............................................................ (16,537)
----------------
653,107
Net unrealized appreciation (depreciation) during the period on
investments ...................................................... 10,291,177
-------------------------------------------------------------------------------------------
Net gain (loss) on investments 10,944,284
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 19,679,943
-------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
27 - Scudder New York Tax Free Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Years Ended March 31,
Increase (Decrease) in Net Assets 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations:
Net investment income ...................................... $ 8,735,659 $ 9,246,365
Net realized gain (loss) from investment transactions ...... 653,107 1,006,614
Net unrealized appreciation (depreciation) on
investment transactions .................................. 10,291,177 (1,348,644)
---------------- ----------------
Net increase (decrease) in net assets resulting from
operations ............................................... 19,679,943 8,904,335
---------------- ----------------
Distributions to shareholders from net investment
income ................................................... (8,735,659) (9,246,365)
---------------- ----------------
Distributions to shareholders from net realized gains ...... (254,878) (174,661)
---------------- ----------------
Fund share transactions:
Proceeds from shares sold .................................. 47,326,586 29,307,330
Net asset value of shares issued to shareholders in
reinvestment of distributions ........................... 5,891,191 6,202,562
Cost of shares redeemed .................................... (48,822,944) (45,999,331)
---------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions ............................................. 4,394,833 (10,489,439)
---------------- ----------------
Increase (decrease) in net assets .......................... 15,084,239 (11,006,130)
Net assets at beginning of period .......................... 180,647,157 191,653,287
---------------- ----------------
Net assets at end of period ................................ $ 195,731,396 $ 180,647,157
---------------- ----------------
Other Information
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Fund shares
Shares outstanding at beginning of period .................. 16,986,861 17,964,551
---------------- ----------------
Shares sold ................................................ 4,258,999 2,742,130
Shares issued to shareholders in reinvestment of
distributions ............................................ 530,284 580,341
Shares redeemed ............................................ (4,407,178) (4,300,161)
---------------- ----------------
Net increase (decrease) in Fund shares ..................... 382,105 (977,690)
---------------- ----------------
Shares outstanding at end of period ........................ 17,368,966 16,986,861
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
28 - 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,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of ----------------------------------------------------------------------------------------
period ......................... $10.63 $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53 $10.39
Income from investment operations: ----------------------------------------------------------------------------------------
Net investment income ............. .51 .53 .53 .52 .54 .61 .65 .67 .69 .72
Net realized and unrealized gain
(loss) on investment
transactions ................... .66 (.03) .29 .11 (.35) 1.03 .50 .13 .16 .14
Total from investment ----------------------------------------------------------------------------------------
operations ..................... 1.17 .50 .82 .63 .19 1.64 1.15 .80 .85 .86
Less distributions: ----------------------------------------------------------------------------------------
From net investment income ........ (.51) (.53) (.53) (.52) (.54) (.61) (.65) (.67) (.69) (.72)
From paid-in capital .............. -- -- -- -- -- -- -- -- (.08) --
From net realized gains ........... (.02) (.01) -- -- (.67) (.61) (.25) -- (.01) --
In excess of net realized gains ... -- -- -- (.05) (.06) -- -- -- -- --
----------------------------------------------------------------------------------------
Total distributions ............... (.53) (.54) (.53) (.57) (1.27) (1.22) (.90) (.67) (.78) (.72)
----------------------------------------------------------------------------------------
Net asset value, end of ----------------------------------------------------------------------------------------
period ......................... $11.27 $10.63 $10.67 $10.38 $10.32 $11.40 $10.98 $10.73 $10.60 $10.53
----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) .................. 11.20 4.76 7.95 6.39 1.31 15.60 11.11 7.79 8.18 8.55
Ratios and Supplemental Data
Net assets, end of period
($ millions) ................... 196 181 192 194 207 201 159 142 132 123
Ratio of operating expenses to
average daily net assets (%) ... .83 .83 .82 .82 .82 .82 .87 .91 .89 .89
Ratio of net investment
income to average daily
net assets (%) ................. 4.65 4.95 4.91 5.13 4.80 5.36 5.96 6.29 6.39 6.89
Portfolio turnover rate (%) ....... 28.8 71.0 80.5 83.8 158.0 201.4 168.2 224.9 114.3 132.1
</TABLE>
29 - 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 New York Tax Free Fund ("Tax Free Fund"), a diversified fund, are each
a series of Scudder State Tax Free Trust (the "Trust") which is organized as a
Massachusetts business trust and 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. All other debt securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board of Trustees.
Money market investments purchased with an original maturity of sixty days or
less are valued at amortized cost.
When-issued and Forward Delivery Securities. The Tax Free Fund may purchase
securities on a when-issued or forward delivery basis, for payment and delivery
at a later date. The price of such securities, which may be expressed in yield
terms, is fixed at the time the commitment to purchase is made, but delivery and
payment take place at a later time. At the time the Fund makes the commitment to
purchase a security on a when-issued or forward delivery basis, it will record
the transaction and reflect the value of the security in determining its net
asset value. During the period between purchase and settlement, no payment is
made by the Tax Free Fund to the issuer and no interest accrues to the Tax Free
Fund. At the time of settlement, the market value of the security may be more or
less than the purchase price. The Fund will establish a segregated account in
which it will maintain cash and liquid debt securities equal in value to
commitments for when-issued or forward delivery securities.
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, 1998, the Tax Free Fund purchased interest rate futures to manage the
duration of the portfolio and 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.
30 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
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 Tax Free Fund if the option is exercised. During
the year ended March 31, 1998, the Tax Free Fund wrote call options on interest
rate futures as a hedge against potential adverse price movements in the value
of portfolio assets and purchased call options on interest rate futures to
manage the duration of the portfolio.
If the Tax Free Fund writes an option and the option expires unexercised, the
Tax Free 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 Tax Free 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 and the initial premium
received. If the Tax Free Fund purchased an option and allows the option to
expire it would realize a loss to the extent of the premium paid. If the Tax
Free 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 Tax Free 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 Tax Free 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 Tax Free 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 Tax Free Fund writes a covered call option, the Tax Free 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 Tax Free 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
Tax Free 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
Tax Free 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 of 1986, as amended, which are applicable to regulated
investment companies and to distribute all of their taxable and tax-exempt
income
31 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
to their shareholders. Accordingly, the Funds paid no federal income taxes and
no provisions for federal income taxes were required.
As of March 31, 1998, the Tax Free Money Fund had a net tax basis capital loss
carryforward of approximately $52,500, which may be applied against any realized
net taxable capital gains of each succeeding year until full utilized or until
March 31, 2000 ($800), March 31, 2001 ($1,700), March 31, 2002 ($3,500), March
31, 2003 ($43,200) and March 31, 2004 ($3,300), the respective expiration dates,
whichever occurs first.
As of March 31, 1998, the Tax Free Fund had a net tax basis capital loss
carryforward of approximately $5,700,000 which may be applied against any
realized net taxable capital gains of each succeeding year until fully utilized
or until March 31, 2003 ($3,320,000) 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. 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
primarily relate to investments in options, futures, and certain securities sold
at a loss for the Tax Free Fund. 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 their 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
For the year ended March 31, 1998, purchases and sales of long-term municipal
securities aggregated $58,882,798 and $50,113,507, respectively, for Tax Free
Fund.
The aggregate face value of futures contracts both opened and closed during the
year ended March 31, 1998 amounted to $19,696,125 and $19,696,125, respectively,
for Tax Free Fund.
Transactions in written call options on interest rate futures for the year ended
March 31, 1998 were as follows:
<TABLE>
<CAPTION>
Number of Contracts Premiums Received ($)
------------------- ---------------------
<S> <C> <C>
Outstanding at March 31, 1997 ..... -- --
Contracts written ................. 300 54,150
Contracts closed .................. (300) (54,150)
-------------------------------------------------------------------------------------
Outstanding at March 31, 1998 ..... -- --
======== ========
</TABLE>
32 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
C. Related Parties
Effective December 31, 1997, Scudder, Stevens & Clark, Inc. ("Scudder") and The
Zurich Insurance Company ("Zurich"), an international insurance and financial
services organization, formed a new global investment organization by combining
Scudder's business with that of Zurich's subsidiary, Zurich Kemper Investments,
Inc. As a result of the transaction, Scudder changed its name to Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Adviser"). The transaction between
Scudder and Zurich resulted in the termination of the Funds' Investment
Management Agreements with Scudder. However, new Investment Management
Agreements (the "Management Agreements") between the Funds and Scudder Kemper
were approved by the Funds' Board of Trustees and by the Funds' Shareholders.
The Management Agreements, which are effective December 31, 1997, are the same
in all material respects as the corresponding previous Investment Management
Agreements, except that Scudder Kemper is the new investment adviser to the
Funds.
Each Fund has entered into an Investment Advisory Agreement (each an "Agreement"
and collectively the "Agreements") with Scudder Kemper, 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. The Adviser
determines the securities, instruments, and other contracts relating to
investments to be purchased, sold or entered into by each Fund. In addition to
portfolio management services, the Adviser provides certain administrative
services in accordance with the Agreements. For the year ended March 31, 1998,
the fee for Tax Free Fund pursuant to the Agreement amounted to $1,184,089,
which was equivalent to an annual effective rate of 0.63% of the Fund's average
daily net assets.
With respect to Tax Free Money Fund, the Adviser has agreed not to impose all or
a portion of its management fee until July 31, 1998 and during such period to
maintain the annualized expenses of the Tax Free Money Fund at not more than
0.60% of average daily net assets. For the year ended March 31, 1998, the
Adviser did not impose a portion of its fee amounting to $122,374 and the
portion imposed amounted to $215,318.
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, 1998, SFAC imposed fees amounting to
$30,000 and $52,711 of which $2,500 and $4,655 are unpaid at March 31, 1998 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, 1998, $57,141 and $118,928 were charged by SSC to Tax Free
Money Fund and Tax Free Fund, of which $4,445 and $9,933 were unpaid at March
31, 1998, respectively.
Each Fund pays each Trustee not affiliated with the Adviser an annual retainer,
allocated between the Funds, plus specified amounts for attended board and
committee meetings. For the year ended March 31, 1998, Trustees' fees aggregated
$16,816 and $18,117 for both the Tax Free Money Fund and Tax Free Fund,
respectively.
33 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<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, 1998 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, 1998, 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, 1998, 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 5, 1998
34 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Tax Information
Of the dividends paid by Scudder New York Tax Free Money Fund and Scudder New
York Tax Free Fund from net investment income for the taxable year ended March
31, 1998, 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.
35 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder New York Tax Free
Money Fund (the "Fund") was held on October 24, 1997, at the office of Scudder
Kemper Investments, Inc. (formerly Scudder, Stevens & Clark, Inc.), Two
International Place, Boston, Massachusetts 02110. At the Meeting, as adjourned
and reconvened, the following matters were voted upon by the shareholders (the
resulting votes for each matter are presented below). With regard to certain
proposals, it was recommended that the Meeting be reconvened in order to provide
shareholders with an additional opportunity to return their proxies. The date of
the reconvened meeting at which the matters were decided is noted after the
proposed matter.
1. To approve the new Investment Management Agreement between the Fund and
Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
33,831,980 1,417,392 2,188,301 0
2. To elect Trustees.
Number of Votes:
----------------
Trustee For Withheld
------- --- --------
Henry P. Becton, Jr. 35,314,542 2,123,131
Dawn-Marie Driscoll 35,319,498 2,118,175
Peter B. Freeman 35,314,542 2,123,131
George M. Lovejoy, Jr. 35,311,492 2,126,181
Wesley W. Marple, Jr. 35,242,773 2,194,900
Daniel Pierce 35,174,266 2,263,407
Kathryn L. Quirk 35,316,294 2,121,379
Jean C. Tempel 35,247,729 2,188,857
3. To approve the Board's discretionary authority to convert the Fund to a
master/feeder fund structure through a sale or transfer of assets or
otherwise.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
29,460,796 2,744,564 5,232,313 0
36 - Scudder New York Tax Free Money Fund
<PAGE>
4. To approve certain amendments to the Declaration of Trust. Sufficient
proxies had not been received by December 2, 1997 to approve the
amendments to the Declaration of Trust. Management has determined not to
continue to seek shareholder approval for this item.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
29,745,962 2,126,136 5,217,682 0
5. To approve the revision of certain fundamental investment policies.
<TABLE>
<CAPTION>
Number of Votes:
----------------
Broker
Fundamental Policies For Against Abstain Non-Votes*
-------------------- --- ------- ------- ----------
<S> <C> <C> <C> <C>
5.1 Diversification 29,389,301 2,342,207 5,706,166 0
5.2 Borrowing 29,353,597 2,377,911 5,706,166 0
5.3 Senior securities 29,389,301 2,342,207 5,706,166 0
5.4 Concentration 29,356,914 2,374,594 5,706,166 0
5.5 Loans 29,351,633 2,379,875 5,706,166 0
5.6 Underwriting of securities 29,389,301 2,342,207 5,706,166 0
5.7 Investment in real estate 29,389,301 2,342,207 5,706,166 0
5.8 Purchase of physical 29,389,301 2,342,207 5,706,166 0
commodities
5.9 Investment in New York 29,372,925 2,358,582 5,706,166 0
municipal securities
5.10 Tax diversification 29,389,301 2,342,207 5,706,166 0
</TABLE>
6. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's independent
accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
34,767,725 908,667 1,761,281
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
37 - Scudder New York Tax Free Money Fund
<PAGE>
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder New York Tax Free
Fund (the "Fund") was held on October 24, 1997, at the office of Scudder Kemper
Investments, Inc. (formerly Scudder, Stevens & Clark, Inc.), Two International
Place, Boston, Massachusetts 02110. At the Meeting, as adjourned and reconvened,
the following matters were voted upon by the shareholders (the resulting votes
for each matter are presented below). With regard to certain proposals, it was
recommended that the Meeting be reconvened in order to provide shareholders with
an additional opportunity to return their proxies. The date of the reconvened
meeting at which the matters were decided is noted after the proposed matter.
1. To approve the new Investment Management Agreement between the Fund and
Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
10,162,351 496,495 998,063 0
2. To elect Trustees.
Number of Votes:
----------------
Trustee For Withheld
------- --- --------
Henry P. Becton, Jr. 11,026,957 629,952
Dawn-Marie Driscoll 10,931,362 725,547
Peter B. Freeman 11,028,292 628,617
George M. Lovejoy, Jr. 11,029,367 627,542
Wesley W. Marple, Jr. 11,024,275 632,634
Daniel Pierce 11,026,424 630,486
Kathryn L. Quirk 10,920,216 736,694
Jean C. Tempel 11,021,836 635,073
3. To approve the Board's discretionary authority to convert the Fund to a
master/feeder fund structure through a sale or transfer of assets or
otherwise.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
9,079,306 913,360 1,149,355 514,888
38 - Scudder New York Tax Free Fund
<PAGE>
4. To approve certain amendments to the Declaration of Trust. Sufficient
proxies had not been received by December 2, 1997 to approve the
amendments to the Declaration of Trust. Management has determined not to
continue to seek shareholder approval for this item.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
9,385,178 740,926 1,112,926 492,217
5. To approve the revision of certain fundamental investment policies.
<TABLE>
<CAPTION>
Number of Votes:
----------------
Broker
Fundamental Policies For Against Abstain Non-Votes*
-------------------- --- ------- ------- ----------
<S> <C> <C> <C> <C>
5.1 Diversification 9,384,454 749,031 1,008,536 514,888
5.2 Borrowing 9,365,005 765,746 1,011,270 514,888
5.3 Senior securities 9,371,657 761,828 1,008,538 514,888
5.4 Concentration 9,372,232 758,519 1,011,270 514,888
5.5 Loans 9,375,268 758,217 1,008,536 514,888
5.6 Underwriting of securities 9,385,412 750,069 1,006,540 514,888
5.7 Investment in real estate 9,387,401 748,080 1,006,540 514,888
5.8 Purchase of physical 9,385,218 750,263 1,006,540 514,888
commodities
5.9 Investment in New York 9,387,401 748,080 1,006,540 514,888
municipal securities
5.10 Tax diversification 9,385,412 750,069 1,006,540 514,888
</TABLE>
6. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's independent
accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
10,424,271 371,671 860,967
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
39 - Scudder New York Tax Free Fund
<PAGE>
Officers and Trustees
Daniel Pierce*
President and Trustee
Henry P. Becton, Jr.
Trustee; President and General
Manager, WGBH Educational
Foundation
Dawn-Marie Driscoll
Trustee; Executive Fellow, Center
for Business Ethics, Bentley
College; President, Driscoll
Associates
Peter B. Freeman
Trustee; Corporate Director and
Trustee
George M. Lovejoy, Jr.
Trustee; President and Director,
Fifty Associates
Wesley W. Marple, Jr.
Trustee; Professor of Business
Administration,
Northeastern University, College
of Business Administration
Kathryn L. Quirk*
Trustee; Vice President and
Assistant Secretary
Jean C. Tempel
Trustee; Managing Partner,
Technology Equity Partners
Donald C. Carleton*
Vice President
Philip G. Condon*
Vice President
Jerard K. Hartman*
Vice President
Thomas W. Joseph*
Vice President
Jeremy L. Ragus*
Vice President
Rebecca Wilson*
Vice President
Thomas F. McDonough*
Vice President, Secretary and
Treasurer
John R. Hebble*
Assistant Treasurer
Caroline Pearson*
Assistant Secretary
*Scudder Kemper Investments, Inc.
40 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Investment Products and Services
The Scudder Family of Funds+++
- --------------------------------------------------------------------------------
Money Market
- ------------
Scudder U.S. Treasury Money Fund
Scudder Cash Investment Trust
Scudder Money Market Series --
Premium Shares*
Managed Shares*
Scudder Government Money Market Series --
Managed Shares*
Tax Free Money Market+
- ----------------------
Scudder Tax Free Money Fund
Scudder Tax Free Money Market Series--
Managed Shares*
Scudder California Tax Free Money Fund**
Scudder New York Tax Free Money Fund**
Tax Free+
- ---------
Scudder Limited Term Tax Free Fund
Scudder Medium Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder High Yield Tax Free Fund
Scudder California Tax Free Fund**
Scudder Massachusetts Limited Term Tax Free Fund**
Scudder Massachusetts Tax Free Fund**
Scudder New York Tax Free Fund**
Scudder Ohio Tax Free Fund**
Scudder Pennsylvania Tax Free Fund**
U.S. Income
- -----------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
Scudder GNMA Fund
Scudder Income Fund
Scudder High Yield Bond Fund
Global Income
- -------------
Scudder Global Bond Fund
Scudder International Bond Fund
Scudder Emerging Markets Income Fund
Asset Allocation
- ----------------
Scudder Pathway Conservative Portfolio
Scudder Pathway Balanced Portfolio
Scudder Pathway Growth Portfolio
Scudder Pathway International Portfolio
U.S. Growth and Income
- ----------------------
Scudder Balanced Fund
Scudder Growth and Income Fund
Scudder S&P 500 Index Fund
Scudder Real Estate Investment Fund
U.S. Growth
- -----------
Value
Scudder Large Company Value Fund
Scudder Value Fund***
Scudder Small Company Value Fund
Scudder Micro Cap Fund
Growth
Scudder Classic Growth Fund***
Scudder Large Company Growth Fund
Scudder Development Fund
Scudder 21st Century Growth Fund
Global Growth
- -------------
Worldwide
Scudder Global Fund
Scudder International Growth and Income Fund
Scudder International Fund
Scudder Global Discovery Fund***
Scudder Emerging Markets Growth Fund
Scudder Gold Fund
Regional
Scudder Greater Europe Growth Fund
Scudder Pacific Opportunities Fund
Scudder Latin America Fund
The Japan Fund, Inc.
Industry Sector Funds
- ---------------------
Choice Series
Scudder Financial Services Fund
Scudder Health Care Fund
Scudder Technology Fund
Retirement Programs and Education Accounts
- --------------------------------------------------------------------------------
Retirement Programs
- -------------------
Traditional IRA
Roth IRA
SEP IRA
Keogh Plan
401(k), 403(b) Plans
Scudder Horizon Plan**+++ +++
(a variable annuity)
Education Accounts
- ------------------
Education IRA
UGMA/UTMA
Closed-End Funds#
- --------------------------------------------------------------------------------
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The Korea Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder Global High Income Fund, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder Spain and Portugal Fund, Inc.
For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +++Funds within categories are listed in order from
expected least risk to most risk. Certain Scudder funds may not be available for
purchase or exchange. +A portion of the income from the tax-free funds may be
subject to federal, state, and local taxes. *A class of shares of the Fund.
**Not available in all states. ***Only the Scudder Shares of the Fund are part
of the Scudder Family of Funds. +++ +++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 Kemper Investments, Inc., are traded on the New York Stock Exchange and,
in some cases, on various other stock exchanges.
41 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Scudder Solutions
<TABLE>
<CAPTION>
Convenient ways to invest, quickly and reliably:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automatic Investment Plan QuickBuy
A convenient investment program in which money is Lets you purchase Scudder fund shares
electronically debited from your bank account monthly to electronically, avoiding potential mailing delays;
regularly purchase fund shares and "dollar cost average" money for each of your transactions is
-- buy more shares when the fund's price is lower and electronically debited from a previously designated bank
fewer when it's higher, which can reduce your average account.
purchase price over time.
Automatic Dividend Transfer Payroll Deduction and Direct Deposit
The most timely, reliable, and convenient way to Have all or part of your paycheck -- even government
purchase shares -- use distributions from one Scudder checks -- invested in up to four Scudder funds at
fund to purchase shares in another, automatically one time.
(accounts with identical registrations or the same
social security or tax identification number).
Dollar cost averaging involves continuous investment in securities regardless of price
fluctuations and does not assure a profit or protect against loss in declining markets.
Investors should consider their ability to continue such a plan through periods of low price
levels.
Around-the-clock electronic account service and information, including some transactions:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Automated Information Line: SAIL(TM) -- Scudder's Web Site -- http://funds.scudder.com
1-800-343-2890
Scudder Electronic Account Services: Offering
Personalized account information, the ability to account information and transactions, interactive
exchange or redeem shares, and information on other worksheets, prospectuses and applications for all
Scudder funds and services via touchtone telephone. Scudder funds, plus your current asset allocation,
whenever you need them. Scudder's Site also
provides news about Scudder funds, retirement
planning information, and more.
Retirees and those who depend on investment proceeds for living expenses can enjoy these convenient,
timely, and reliable automated withdrawal programs:
- ------------------------------------------------------------------------------------------------------------------------------
Automatic Withdrawal Plan QuickSell
You designate the bank account, determine the schedule Provides speedy access to your money by
(as frequently as once a month) and amount of the electronically crediting your redemption proceeds
redemptions, and Scudder does the rest. to the bank account you previously designated.
Distributions Direct
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
- ------------------------------------------------------------------------------------------------------------------------------
42 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
Mutual Funds and More -- Brokerage and Guidance Services:
- ------------------------------------------------------------------------------------------------------------------------------
Scudder Brokerage Services Scudder Portfolio Builder
Offers you access to a world of investments, A free service designed to help suggest ways investors like
including stocks, corporate bonds, Treasuries, plus you can diversify your portfolio among domestic and global,
over 8,000 mutual funds from at least 150 mutual as well as equity, fixed-income, and money market funds,
fund companies. And Scudder Fund Folio(SM) provides using Scudder funds.
investors with access to a marketplace of more than
500 no-load funds from well-known companies--with no Personal Counsel from Scudder(SM)
transaction fees or commissions. Scudder
shareholders can take advantage of a Scudder Developed for investors who prefer the benefits of no-load
Brokerage account already reserved for them, with Scudder funds but want ongoing professional assistance in
no minimum investment. For information about managing a portfolio. Personal Counsel(SM) is a highly
Scudder Brokerage Services, call 1-800-700-0820. customized, fee-based asset management service for
individuals investing $100,000 or more.
Fund Folio funds held less than six months will be charged a fee for redemptions. You can buy
shares directly from the fund itself or its principal underwriter or distributor without
paying this fee. Scudder Brokerage Services, Inc., 42 Longwater Drive, Norwell, MA 02061.
Member SIPC.
Personal Counsel From Scudder(SM) and Personal Counsel(SM) are service marks of and represent a
program offered by Scudder Investor Services, Inc., Adviser.
For more information about these services, call a Scudder representative at 1-800-225-5163
- ------------------------------------------------------------------------------------------------------------------------------
Additional Information on How to Contact Scudder:
- ------------------------------------------------------------------------------------------------------------------------------
For existing account services and transactions Please address all written correspondence to
Scudder Investor Relations -- 1-800-225-5163 The Scudder Funds
P.O. Box 2291
For establishing 401(k) and 403(b) plans Boston, Massachusetts
Scudder Defined Contribution Services -- 02107-2291
1-800-323-6105
Or Stop by a Scudder Investor Center
For information about The Scudder Funds, including Many shareholders enjoy the personal, one-on-one service of
additional applications and prospectuses, or for the Scudder Investor Centers. Check for an Investor Center near
answers to investment questions you -- they can be found in the following cities:
Scudder Investor Relations -- 1-800-225-2470 Boca Raton Chicago San Francisco
[email protected] Boston New York
</TABLE>
43 - Scudder New York Tax Free Money Fund
Scudder New York Tax Free Fund
<PAGE>
About the Fund's Adviser
Scudder Kemper Investments, Inc., is one of the largest and most experienced
investment management oganizations worldwide, managing more than $200 billion in
assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, insurance companies, and private family and
individual accounts. It is one of the ten largest mutual fund companies in the
U.S.
Scudder Kemper Investments has a rich heritage of innovation, integrity, and
client-focused service. In 1997, Scudder, Stevens & Clark, Inc., founded 79
years ago as one of the nation's first investment counsel organizations, joined
the Zurich Group. As a result, Zurich's subsidiary, Zurich Kemper Investments,
Inc., with 50 years of mutual fund and investment management experience, was
combined with Scudder. Headquartered in New York, Scudder Kemper Investments
offers a full range of investment counsel and asset management capabilities,
based on a combination of proprietary research and disciplined, long-term
investment strategies. With its global investment resources and perspective,
the firm seeks opportunities in markets throughout the world to meet the needs
of investors.
Scudder Kemper Investments, Inc., the global asset management firm, is a member
of the Zurich Group. The Zurich Group is an internationally recognized leader in
financial services, including property/casualty and life insurance, reinsurance,
and asset management.
Shares of the Funds are not insured or guaranteed by the U.S. Government.
Scudder New York Tax Free Money Fund seeks to maintain a constant net asset
value of $1.00 per share but there can be no assurance that the stable net asset
value will be maintained.
This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
SCUDDER
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